BIS Final Rule Extends License Requirement for Exports, Reexports, and Transfers to Burma to Blocked Persons Under EO 13464
The Bureau of Industry and Security has issued a final rule, effective January 8, 2009, which amends the Export Administration Regulations to extend the existing license requirements for Burma to persons whose property and interests in property are blocked pursuant to Executive Order 13464.
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EO 13464, "Blocking Property and Prohibiting Certain Transactions Related to Burma," expanded the Burma sanctions by blocking the property or interests in property of any "person" determined by the Secretary of the Treasury, after consultation with the Secretary of State, to be owned or controlled by, directly or indirectly, the Government of Burma or an official or officials of the Government of Burma (e.g. state-owned enterprises, their branches, etc.) See ITT's Online Archives or 05/08/08 news, 08050840, for BP summary of EO 13464.
License Requirement Extended to Blocked Persons Under EO 13464
BIS' final rule amends the EAR to expand the existing licensing requirements in 15 CFR 744.22 to include persons whose property and interests in property are blocked as designated in the Annex to EO 13464.
(Additional designations were announced by the Office of Foreign Assets Control (OFAC) in August 2008. See ITT's Online Archives or 08/08/08 news, 08080899 16, for BP summary.)
As set forth in 15 CFR 744.22 as amended, exports, reexports or transfers of items subject to the EAR (except agricultural commodities, medicine, or medical devices classified as EAR99) require a license to any person whose property and interests in property are blocked pursuant to Executive Orders 13310, 13448 or (now) 13464, including persons listed in or designated pursuant to these EOs. (Such persons are identified with the reference [BURMA] on OFAC's list of Specially Designated Nationals and Blocked Persons.
OFAC's "50% Rule" for Blocked Persons Applies
Consistent with guidance issued by OFAC in February 2008, a person whose property and interests in property are blocked pursuant to an EO or regulations administered by OFAC is considered to have an interest in all property and interests in property of an entity in which it owns, directly or indirectly, a 50% or greater interest.
The property and interests in property of such a 50% entity are blocked, and the licensing requirements in 15 CFR 744.22 apply, regardless of whether the entity itself is listed in the annex to an EO or otherwise designated pursuant to such order.
(See ITT's Online Archives or 03/05/08 news, 08030515, for BP summary of OFAC's guidance.)
Separate Authorization from BIS Unnecessary if Authorized by OFAC
As was previously the case, in order to avoid duplication, U.S. persons are not required to seek separate BIS authorization for an export, reexport, or transfer to a person identified in 15 CFR 744.22 of any item subject to both the EAR and regulations maintained by OFAC. Therefore, if OFAC authorizes an export from the U.S. or an export, reexport, or transfer by a U.S. person to a person identified in 15 CFR 744.22, no separate authorization from BIS is necessary.
Saving Clause
Shipments of items removed from eligibility for export or reexport under a license exception or without a license (i.e., under the designator "NLR") as a result of this regulatory action that were on dock for loading, on lighter, laden aboard an exporting carrier, or en route aboard a carrier to a port of export, on February 9, 2009, pursuant to actual orders for export or reexport to a foreign destination, may proceed to that destination under the previously applicable license exception or without a license (NLR) so long as they are exported or reexported before February 23, 2009. Any such items not actually exported or reexported before midnight, on February 23, 2009, require a license in accordance with this regulation.
(See ITT's Online Archives or 10/25/07 news, 07102525, for BP summary of BIS' final rule imposing additional restrictions and license requirements on exports to Burma to persons listed/designated pursuant to EOs 13310 and 13448.
See ITT's Online Archives or 07/30/03 and 10/26/07 news, 03073010 and 07102615, for BP summaries of EO 13310 and EO 13448, respectively.)
BIS contact - Susan Kramer (202) 482-4252
BIS final rule (D/N 080717847-81643-01, FR Pub 01/08/09) available at http://edocket.access.gpo.gov/2009/pdf/E9-127.pdf