By: Danielle Hatch
Effective August 3, 2018, the Bureau of Industry and Security (BIS) has removed India from Country Group A:6 and placed it in Country Group A:1 (Supplement No. 1 to Part 740) and Country Group A:5. In a nutshell, this change is going to expand the number of US goods that can be exported/reexported to India using NLR and License Exceptions STA, GOV, and APR…which is good news. Fun Fact: India is the 37th country to join Country Group A:5 (make sure to share that one).
The biggest change exporters/reexporters will actually “see” is the ability to use paragraph (c)(1) of License Exception STA for exports/reexports and transfers within India. Exporters with also find that the move to Country Group A:5 now allows License Exception paragraph (c) to be used on exports and transfers of some 600-series goods (not all; dependent on end use/user and other exceptions specified elsewhere).
Now that India is in Country Group A:1, License Exception GOV can be used for exports/reexports of goods to the Indian government agencies. Related to this, License Exception GOV can be used to authorize some 600-series items now that India is in Country Group A:5.
It should be noted that License Exception APR (paragraphs (a), (b) and (j)) are now open for India too. The new ruling also removed the “X” for India in the NS column 2 of the Commerce Country Chart (Supplement No. 1 to Part 738) which allows a large number of items that previously required a license or license exception to be exported/reexported to India under No License Required (NLR).
Breakdown of EAR Changes:
- Part 738: BIS amends Supplement No. 1 to Part 738, Commerce Country Chart, by removing the license requirements for National Security Column 2 (NS2) reasons. Accordingly, this rule removes the ‘‘X’’ in NS Column 2 for India.
- Part 740: BIS amends Supplement No. 1 to Part 740 to add, in alphabetical order, India to Country Groups A:1 and A:5.
- Conforming 738 Amendments
- Removal of the first sentence of footnote 7 to the Commerce Country Chart in Supplement No. 1 to Part 738, related to India. This amendment removes the requirement that exporters file in the Automated Export System when items controlled for Crime Control Columns 1 and 3 reasons, and Regional Stability Column 2 reasons were destined to India. As a conforming change,
- Removal of the word ‘‘Also’’ from the second sentence of footnote 7 and capitalizes the ‘‘n’’ in ‘‘note’’ since it begins the sentence.
- Paragraph (b)(3) of§ 738.4 removes the name ‘‘India’’ and replace it with the name ‘‘Chad.’’ The sample analysis used India as an example of a country with NS Column 2 controls. That reason for control no longer applies to India but currently applies to Chad.
- Conforming 740 Amendments
- Removal of India from Country Group A:6 to avoid creating conflicting eligibility criteria for STA provisions.
- Part 743: India now is subject to reporting requirements for items controlled under Wassenaar, as set forth in Part 743, Special Reporting and Notification. Specifically, India is added, in alphabetical order, to Supplement No. 1 to Part 743, Wassenaar Arrangement Participating States.
- Part 758: Removal of the requirement that exporters file in AES when items controlled for CC Columns 1 and 3 reasons and RS Column 2 reasons are destined to India. This reporting requirement had been instituted when the license requirement for such items was removed (see U.S.-India Bilateral Understanding: Additional Revisions to the U.S. Export and Reexport Controls Under the Export Administration Regulations; January 23, 2015; 80 FR 3463).
- Part 772: India added, in alphabetical order, to the list of countries under the term Australia Group in § 772.1, Definitions of terms as used in the Export Administration Regulations (EAR). This updates the definition consistent with formal recognition of India’s membership in the AG in a BIS final rule, entitled ‘‘Implementation of the February 2017 Australia Group (AG) Intersessional Decisions and June 2017 Plenary Understandings; Addition of India to the AG’’ (83 FR 13849, April 2, 2018).