U.S. BIS New Rule regarding Exports to Hong Kong

The U.S. Bureau of Industry and Security (BIS) has introduced a new rule concerning exports to Hong Kong. The new rule is effective as of 19 April 2017. The BIS has also published a FAQ’s to explain its rule. 

Although the BIS does not fully explain the rationale for this new rule, the new rule requires the following: 

  • Parties intending to (re)export to Hong Kong require to obtain (prior to (re)export) a copy of a Hong Kong import license or a written statement from the Hong Kong government that such a license is not required for any item:
    • subject to the Export Administration Regulations (EAR) and
    • controlled on the Commerce Control List (CCL) for national security (NS), missile technology (MT), nuclear nonproliferation (NP column 1), or chemical and biological weapons (CB) reasons.
  • This rule also requires persons intending to reexport from Hong Kong any item subject to the EAR and controlled for NS, MT, NP column 1, or CB reasons to obtain a Hong Kong export license or a statement from the Hong Kong government that such a license is not required.

The only rationale for this new rule is set-out in BIS FAQ 7 – 

BIS is taking this action to provide greater assurance that U.S. origin items that are subject to the multilateral control regimes, i.e. the Wassenaar Arrangement, the Australia Group, the Missile Technology Control Regime, and the Nuclear Suppliers Group, will be properly authorized by the United States to their final destination, even when those items first pass through Hong Kong. This rule is also intended to complement the control system of the Government of the Hong Kong Special Administrative Region, which requires both an import license and export license for multilaterally controlled items imported and reexported by parties in Hong Kong.

What’s unclear is why the U.S. requires this form of assurances? Why doesn’t the U.S. institute a licensing program? 

Well who said that export controls are rational and logic? 

1 Comment on "U.S. BIS New Rule regarding Exports to Hong Kong"

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