New BIS Rule Grants Australia and the UK “Nearly” the Same Treatment as Canada

By: Derrick Kyle, Senior Associate
Date: 04/20/2024

On April 19, 2024, the Department of Commerce Bureau of Industry and Security (“BIS”) published an interim final rule (“Interim Rule”), amending the Export Administration Regulations (“EAR”) to enhance cooperation and technological innovation between the United States, Australia, and the United Kingdom (“UK”) pursuant to the AUKUS Trilateral Security Partnership (“AUKUS”). The full text of the Interim Rule is available here. Among other changes, the Interim Rule removes license requirements and reduces the scope of end-use and end-user-based license requirements for exports, reexports, and transfers (in-country) to or within Australia and the UK.

In the Interim Rule BIS is also requesting comments from interested parties on the impact of the revisions and on additional revisions that would “further enhance defense industrial base cooperation and technology innovation” with Australia and the UK. The comment period is April 19, 2024, to June 3, 2024.

AUKUS Trilateral Security Partnership

AUKUS was announced by the leaders of the United States, Australia, and the UK on September 15, 2021. The purpose of the security partnership is to “resolve to deepen diplomatic, security, and defense cooperation in the Indo-Pacific region, including by working with partners, to meet the challenges of the twenty-first century.” AUKUS consists of two “pillars.” Pillar I focuses on submarine cooperation between the three nations, and Pillar II focuses on collaboration efforts in the following areas:

  1. Advanced cyber, artificial intelligence (“AI”), and autonomy;

  2. Quantum technologies;

  3. Hypersonic and counter-hypersonic capabilities;

  4. Electronic warfare;

  5. Innovation;

  6. Information sharing; and

  7. Additional undersea capabilities.

EAR Revisions

The Interim Rule amends the EAR in several ways to simplify cooperation with Australia and the UK pursuant to AUKUS. With these revisions, the treatment of Australia and the UK under the EAR will better align with the treatment afforded to Canada. Primarily, BIS is removing license requirements for the following reasons for control for Australia and the UK: national security column 1 (“NS1”), regional stability column 1 (“RS1”), and missile technology column 1 (“MS1”). Australia and the UK were not previously subject to NS2 or RS2 controls, so Australia and the UK are now, like Canada, not subject to any NS or RS controls. The major effect of this change is that “600 series” items and items controlled for missile technology reasons will no longer require a license for export to Australia or the UK. BIS claims that these revisions will “significantly reduce” the volume of licenses to be processed by BIS for the two countries.

The Interim Rule also removes reexport licensing requirements for Australia and the UK for items classified under Export Control Classification Number (“ECCN”) 0A919, which describes certain military commodities located and produced outside the United States. An additional revision removes military end-use and military end-user-based license requirements for the UK and Australia for specified cameras, systems, and related components. The affected items include 6A003.a.3, 6A003.a.4, and 6A003.a.6 items intended to be used by a military end-user and multiple commodities described in ECCNs 0A504, 6A002, 6A003, 6A993, and 8A002 when intended to be incorporated into a military commodity controlled by ECCN 0A919. The last major EAR revision relates to the treatment of certain “significant items” controlled under ECCN 9E003.a.1-a.6, a.8, .h, .i, and .l. This revision allows for specified hot section technology for the development, production, or overhaul of commercial aircraft engines, components, and systems to be exported, reexported, or transferred (in-country) to Australia and the UK without a license.

The Interim Rule also makes several other minor changes to the EAR such as adding a specific reference to the UK and Australia in provisions that previously referenced only Canada. However, one minor change still highlights that only Canada is exempted from certain crime control related license requirements for non-firearm items.

The revisions from the Interim Rule will undoubtedly facilitate and streamline further cooperation with the UK and Australian governments pursuant to the goals of AUKUS, and the revisions will also provide benefits to many companies that export or reexport to Australia and the UK. If you have any questions about the recent revisions to the EAR or AUKUS generally or require assistance submitting comments to the Interim Rule or updating your compliance programs, please do not hesitate to reach out to the attorneys at Torres Trade Law.

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