Commerce Eliminates License Exception for CIV

The Commerce Department eliminated its license exception for civil end-users (CIV) in an effort to cut exports to countries pursuing civil-military fusion (see 1904260018), the agency said in a notice. The change, which was expected for nearly a year (see 1907180037), will remove authorizations to export certain controlled items to most civil end-users for civil end-uses in Country Group D:1. The change takes effect June 29.

Commerce's Bureau of Industry and Security said it “acknowledges many countries seek to align civil and defense technology development for many reasons,” including to improve innovation and efficiency. But the strategy presents “an economic challenge” to countries that export high-tech goods, including the U.S., because that strategy could “support military modernization goals contrary to U.S. national security.” Civil-military fusion also makes it more difficult for U.S. industry to determine whether their exports are intended for military end-users or end-uses.

BIS said it eliminated the exception after an “evaluation” of export data from CIV end-users and after reviewing “publicly available strategies” of Group D:1 countries to “obscure” U.S. exporters from determining true end-users. The decision also stemmed from U.S. enforcement actions against people and entities that diverted U.S.-origin goods to military end-users who were “purported civil end users in those countries.” The rule also makes certain “conforming changes” to the Commerce Control List by removing certain references to license exception CIV. It removes the “CIV paragraph from the List-Based License Exceptions section wherever it appears in [Export Control Classification Numbers] on the CCL.”

(Federal Register 04/28/20)