Today, the Bureau of Industry and Security (BIS) announced that it will create a new "Military End-User List" (MEU List) to help exporters comply with the recently expanded military end-use and end-user restrictions ( MEU Rule) that apply to exports of certain items to China, Russia, and Venezuela. The current MEU List includes 102 entities from China and Russia, although the list is designed to be dynamic and will change over time. The MEU List will be included in a revised Supplement No. 5 to Part 744.
When the MEU Rule was implemented, it created significant due diligence burdens for the exporting community, because it was incumbent on those companies to determine whether certain entities in China, Russia and Venezuela would qualify as "military end-users." Although the publication of the MEU List will reduce that burden somewhat, the MEU List is non-exhaustive and BIS stated that an entity's exclusion from the list does not mean that the entity is not subject to the MEU Rule. For example, BIS specifically cautioned that a party not included on the MEU List, but included on Department of Defense list s of military companies in China, would raise a red flag that would require due diligence. Therefore, even though a transaction with a party included on the MEU List is certainly subject to the MEU Rule, exporters, re-exporters, and transferors (e.g., freight forwarders) are still responsible for conducting their own due diligence to identify potential military end users not yet listed by BIS.
The End-User Review Committee (the interagency body composed of the Departments of Commerce, Defense, Energy, State, and sometimes Treasury) is responsible for adding and deleting additional entities from the MEU List. License applications for transactions that are subject to the MEU Rule (i.e., that include a military end-user and an item enumerated in Supplement No. 2 to Part 744) will be reviewed by BIS subject to a presumption of denial.
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