The Bureau of Industry and Security (BIS) has reduced licensing restrictions for certain exports to Mexico, Ukraine, and Cyprus by revising their Country Group designations in the Export Administration Regulations (EAR). In a final rule which takes effect Dec. 28, BIS adds Mexico and Cyprus in Country Group A:6 and moves Ukraine from Country Group D designation to Country group B.

 The County Groups typically serve as a basis of availability of exceptions from license requirements described in the EAR. Country Groups are also used when describing license review policy and end-user and end-use based controls.

For certain exports to Mexico, license exception Strategic Trade Authorization (STA) will be available for exports, reexports and transfers after the changes. This exception can be used for particular “lesser sensitivity items” controlled for national security reasons. This new Country Group status is in addition to Mexico’s existing Country Group B status which includes the availability of License Exceptions GBS and TSR.

This change makes Ukraine eligible for license exceptions Shipments of limited value (LVS), Temporary exports, imports, reexports and transfers (TMP), Baggage (BAG), Gift parcels and humanitarian donations (GFT), Additional permissive reexports (APR), Aircraft and vessels (AVS), and Encryption, commodities, software, and technology (ENC). Exports to Ukraine will also benefit from a range of other loosened restrictions.

By removing Ukraine from Country Group D:1, Ukraine will no longer be subject to “licensing requirements for reexports of the foreign-produced direct product of U.S. origin technology and software,” according to BIS. However, BIS has stated that the license exception for shipments to Country Group B countries (GBS) and the license exception Technology and software restriction (TSR) will not be available to exports to Ukraine.

Adding Cyprus to Country Group A:6 also makes License Exception STA available for exports, reexports and transfer (in-country) of lesser sensitivity items controlled for national security reasons. This new Country Group status is in addition to Cyprus’ existing Country Group B status which includes the availability of License Exceptions GBS and TSR. BIS has stated that because Cyprus is also in Country Group D:5 (U.S. Arms Embargoed Countries), consideration of license exceptions will still be subject to certain restrictions and reviews.

For questions on the final rule, please reach out to your Mohawk Global representative.