US export controls, customs duties on Russia and Belarus

On Friday, April 8, 2022, the US government added two additional weapons to its artillery of actions against Russia and Belarus.

  1. Export license requirement extended to all Trade Control List items. In a final rule to be released on April 14, 2022, the U.S. Department of Commerce, Bureau of Industry and Security (BIS):

a. expanded the licensing requirement for items destined for Russia and Belarus to all items with Export Control Classification Numbers (ECCNs) on the Trade Control List (CCL). This adds a licensing requirement for exports, re-exports and transfers (within the country) of items subject to Export Administration Regulations (EAR) that fall under ECCNs starting with 0 (category 0 – materials , nuclear facilities and equipment [and Miscellaneous Items]), 1 (Category 1 – Special materials and related equipment, Chemicals, “Micro-organisms” and “Toxins”) and 2 (Category 2 – Materials processing). EAR99 items still do not require a license for export, re-export or transfer (in-country) to or within Russia and Belarus – provided they are not intended for a user prohibited end (e.g. Entity List entities, military end users, etc.) or for prohibited end use (e.g. military end use). The BIS previously imposed a licensing requirement for categories 3 to 9.

b. expanded the Russian/Belarusian Direct Foreign Product Rule (FDPR) to apply when the foreign-produced item is the direct product of US-origin technology or software subject to the ‘EAR that falls under any ECCN in product groups D (software) or E (technology) on the CCL or produced by a plant or a major component of a plant that is itself a direct product of such software or technology subject to the EAR and subject to the CCL. Previously, the Russia/Belarus FDPR was limited to categories 3 to 9.

vs. Aircraft, Vessels, Spacecraft (AVS) Restricted License Exception to exclude aircraft registered, owned or controlled by, or chartered or leased by Belarus or a national of Belarus (in addition to Russia).

While the rule went into effect on April 8, 2022, the day it was filed for public inspection, the rule includes an escape clause that allows entities to export, re-export or transfer (within the country) articles submitted to FDPR Russia/Belarus. only unlicensed if en route aboard a carrier to a port on May 9, 2022 (as per actual orders). Exports of items normally subject to EAR, on the other hand, had to be on their way by April 8, 2022.

  1. President Biden has signed into law HR 7108, which suspends normal business relations with Russia and Belarus. As previously reported, the United States and other allied governments have indicated that they will revoke Most Favored Nation (MFN) status for Russia and Belarus, and the United States has now enacted this law. This means that all products from the Russian Federation and the Republic of Belarus will be subject to the (generally) higher rates of duty listed in Column 2 of the United States Harmonized Tariff Schedule. Under the new law, until January 1, 2024, President Biden can also proclaim increases in duty rates above those in Column 2 after a five-day consultation with the House Ways and Means Committee and the Senate Finance Committee. To reduce duties, the President will need to certify that Russia and/or Belarus:

a. has reached an agreement regarding the withdrawal of Russian or Belarusian forces (or both, as the case may be) and the cessation of military hostilities which is accepted by the Free and Independent Government of Ukraine;

b. poses no immediate military threat of aggression to a NATO member; and

vs. recognizes the right of the Ukrainian people to independently and freely choose their own government.

The president must notify Congress 45 days before submitting certification, and there is a procedure for Congress to pass a joint resolution disapproving certification to return to lower office.

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