March 07, 2022

NOTEWORTHY: The New Russia Export Controls

By Emily Kilcrease

Emily Kilcrease, Senior Fellow and Director of the Economics, Energy, and Security program at the Center for a New American Security weighs in with expert commentary and analysis of the new export controls against Russia and Belarus in response to the further invasion of Ukraine, followed by in-line notes on the new rules from the White House and Department of Commerce.

This document does not reflect any new rules announced after March 6, 2022.

Note of Caution: This document is intended to inform a general policy audience. It is not legal advice. If you are trying to export anything to Russia or Belarus, go talk to your export control lawyer immediately.

In One Sentence:

The export controls are designed to allow consumer goods to flow to Russia and Belarus, while cutting off the governments from any western technology that could support their militaries and impeding Russia’s long-term ability to produce energy.

In a Few More Sentences:

How do export controls usually work?

  • Export controls are the rules that say what technology is sensitive from a national security perspective and how the government will regulate the flow of this technology to other countries. The goal is to make sure that companies are not selling sensitive technology to foreign adversaries.
  • The new controls that were put in place on Russia, and now Belarus, are mostly about dual-use technology, which is technology that inherently has both military and civilian applications.
    • There are other sets of controls on purely military items (e.g., tanks, missiles, bombs) that have always had high levels of controls for export to Russia. That is not what the new Russia rules focus on.
  • Dual-use export controls are set by the United States and other countries, usually working through multilateral organizations, based on a case-by-case determination of whether a particular technology or good has technical characteristics that make it suitable for dual-use applications. If they agree that a technology has a dual-use application, they put it on a control list (e.g., the Commerce Control List in the United States).
  • Once a technology is on a control list, countries make their own decisions about how to license exports of that technology. This means that the United States and allies might make very different decisions about how to implement controls.
  • The U.S. Department of Commerce implements U.S. dual-use export controls through the Export Administration Regulations (EAR).

What is new about the Russia/Belarus export controls?

Economy-wide rules

  • The Russia/Belarus export control rules impose new economy-wide restrictions on a broad class of technologies by:
    • Imposing a new licensing requirement on multiple classes of technologies that are listed on the Commerce Control List related to electronics, computers, telecommunications, information security, sensors and lasers, navigation and avionics, marine, and aerospace and propulsion. This includes items that were previously controlled at low levels (e.g., restrictions on selling junky airplane parts to North Korea or other terrorist supporting states) and could previously be exported to Russia and Belarus.
    • Imposing additional export controls on oil and gas refining equipment.
    • Imposing a licensing policy of denial.
    • Including limited exceptions, mostly related to ensuring that personal communications and commercial air operations are not impeded, and limited case-by-case reviews of licenses.
    • The economy-wide rules are generally intended to allow for the flow of purely commercial goods, while restricting the flow of even lower-level technology that might have military applications or technology that is important for Russia's energy sector.
  • The Russia/Belarus Foreign Direct Product Rule (“Russia/Belarus FDP”) extends these rules to apply on an extraterritorial basis to the same scope of foreign goods if such goods are made using U.S.-origin technology or software or using equipment made from U.S.-origin technology or software.
    • The foreign direct product rules have been used before, notably and most innovatively in the Huawei context, which restricted the sale of chips to Huawei if the chip was made using U.S. semiconductor manufacturing equipment or design software (i.e., virtually all chips in the world).
    • The Russia/Belarus FDP is the Huawei rule on steroids, as it covers an entire economy and applies to a much broader range of products.

More Restrictive Rules for Russian/Belarusian Designated Entities and Military End Users

  • 49 Russian entities and 2 Belarusian entities were listed on the Entity List, barring them from receiving U.S. origin items of any kind, and the new foreign direct product rules were applied to these entities.
    • These restrictions have a much broader scope than the economy-wide rules, as they capture all items that are “subject to the Export Administration Regulations (EAR),” even those items that are not listed on the Commerce Control List (i.e., “EAR99” items).
      • EAR99 items include things like pencils and toothbrushes, which now cannot be legally exported to any of the listed entities.
    • The rules impose a licensing policy of denial. The license exceptions available under the economy-wide rules are not available.
    • Food and medicine are the only goods allowed to be exported to these designated entities.
  • The Russia/Belarus Military End Use Foreign Direct Product Rule (“Russia/Belarus-MEU FDP”) extends these rules to apply on an extraterritorial basis to cover the same scope of foreign goods if such goods are made using U.S.-origin technology or software or using equipment made from U.S.-origin technology or software.
    • If the Russia/Belarus FDP is the Huawei rule on steroids, think of the Russia/Belarus-MEU FDP as the Huawei rule on much stronger steroids x (49 + 2).
    • In addition to these listed entities, the new rules also expand the general restrictions related to military end uses or end users to cover all U.S.-origin items except food or medicine. This means that you cannot ship any U.S.-origin item except food or medicine to Russia or Belarus if you have reason to believe it may end up in the hands of the military, even if you are not shipping directly to the 51 specifically listed entities.

Allied Export Controls

  • The U.S. rules excludes from the Russia/Belarus FDP and Russia/Belarus-MEU FDP rules those allied countries that have committed to impose substantially similar controls.
  • This exclusion represents a completely unprecedented level of allied cooperation on export controls. In essence, the United States has decided it does not need to apply the FDP rules in these countries because the same effect will be achieved through these countries’ own measures.
  • There is the added benefit that the allied countries will be active partners in enforcement efforts, rather than the United States attempting to enforce its own unilateral rules extraterritorially.
  • Many significant producer nations (including the EU, Five Eyes, Japan, and South Korea) have made these commitments, including a policy of denying licenses on dual-use and other technology, reflecting a never-before-seen level of coordination on export controls. Ensuring that major chip producing countries, such as Taiwan, fully implement similar commitments will be important.

Room for Further Escalation

  • The export control rules are designed to allow consumer goods to continue flowing to Russia, while restricting those goods that are important for Russia’s future power projection and economic strength. A full trade embargo would cut off all trade flows with Russia, representing a significant escalation of economic measures.
  • Short of a trade embargo, there remains scope for escalation of the economy-wide measures, as those measures do not include EAR99 items.
    • Since the initial announcement, the United States has already rolled out additional controls on oil and gas refining equipment.
    • The United States and allies could impose new controls on advanced technology items that are classified as EAR99 items, such as certain graphic-processing chips used in AI, that support Russia’s high-tech sector.
    • It is unlikely that the allies will choose to eliminate the narrow communications device exceptions in the economy-wide measures, as ensuring that the Russian population has access to communications devices is critical to ensuring their access to and ability to share information.
  • Additional entities could be added to the Entity List or the Russia/Belarus-MEU FDP list.
    • Since the first tranche of rules, Commerce has added an additional 91 entities to the Entity List for their support of Russia’s military activities, including companies in Belize, Estonia, Kazakhstan, Latvia, Malta, Russia, Singapore, Slovakia, Spain, and United Kingdom.
  • The allies could apply the new export control rules to any countries that actively support Russia. This has already been done for Belarus.
  • The United States and allies could move to expel Russia from the Wassenaar Arrangement, which is the voluntary arrangement through which member states set dual-use technology controls. See this twitter thread for more.
    • This is obviously complicated, not least because Wassenaar operates by consensus. A longer-term goal could be to establish a new plurilateral arrangement that sits alongside Wassenaar, where allies could set controls directly related to concerns with Russia (or China).

Is this a big deal?

  • This is big deal. Never before in the post-Cold War era have the allies enacted a common licensing policy (let alone a common licensing policy of denial), imposed common controls on such broad categories of dual-use and other items, or done so in such short order. The allied export control system has seen more change in the last week than it has in decades.

BIS Export Controls Fact Sheet – Detailed Breakdown

Highlighted areas refer to language from the February 24, 2022 Commerce fact sheet. Full rule here; and the March 2, 2022 White House fact sheet that announces the application of the first tranche of rules to Belarus, as well as tightening some areas of the initial set of Russia rules and applying new controls on oil and gas. Full rules here (Belarus) and here (oil and gas) and here (additional Entity List designations). Addition of South Korea to the allied export controls list here.

Feb. 24 Commerce Fact Sheet–Imposes new Commerce Control List (CCL)-based license requirements for Russia.
This final rule adds new license requirements for all Export Control Classification Numbers (ECCNs) in Categories 3-9 of the CCL. Certain of these items, in 58 ECCNs with unilateral controls, were not previously controlled to Russia and include microelectronics, telecommunications items, sensors, navigation equipment, avionics, marine equipment, and aircraft components. BIS’s restrictions should significantly impact Russia’s ability to acquire items it cannot produce itself.

March 2 White House Fact Sheet–Sweeping restrictions on Belarus to choke off its import of technological goods in response to its support of Putin’s war of choice. The Department of Commerce will extend the stringent export control policies put in place for Russia to Belarus. This action will help prevent diversion of items, technologies, and software through Belarus to Russia and will significantly degrade both countries’ ability to sustain their military aggression and project power. This will severely limit the ability of Russia and Belarus to obtain the materials they need to support their military aggression against Ukraine, project power in ways that threaten regional stability and undermine global peace and security.

What this means:

Background

  • Subject to the EAR” includes any U.S.-origin item, with a few exceptions (e.g. items subject to other agency regulations, such as the Department of State’s controls on military items). Your pencil is “subject to the EAR.”
  • “EAR99” refers to a technology that is subject to the EAR and has not been controlled or designated with an Export Control Classification Number (ECCN) on the Commerce Control List (CCL).
  • The CCL controls dual-use items, defined as those items that have both civilian and military purposes. The majority of these items are controlled on a multilateral basis through agreement of the members of the Wassenaar Arrangement.
  • Technologies are listed on the CCL through a detailed classification (ECCN) based on the technical parameters of the item and how these technical parameters may enable a conventional military application of the technology.
  • Just because a technology may be advanced or cutting-edge does not mean that it is necessarily listed on the CCL. There generally must be a military application. Thus, certain advanced products (e.g., GPUs used for AI) may not be listed on the CCL.
  • The United States has legal authority to impose unilateral controls on a wider range of advanced technologies that do not have a dual-use/military application. However, it has tended to not use this domestic legal flexibility since most other countries do not have – or do not use – such authorities, meaning that the U.S. controls on technology other than military or dual-use items would be mostly unilateral and less effective.

New Changes

  • The rules impose a broad license requirement for the export, re-export, or in-country transfer to or within Russia or Belarus of any item subject to the EAR and classified under any ECCN in categories 3-9. This means that there must be an existing ECCN in categories 3-9 for the technology or it will not be caught by the licensing requirement.
  • CCL categories 3-9
    • 3: Electronics
    • 4: Computers
    • 5: Telecommunications and Information Security
    • 6: Sensors and Lasers
    • 7: Navigation and Avionics
    • 8: Marine
    • 9: Aerospace and Propulsion
  • This will include 58 ECCNs with unilateral controls that were not previously controlled to Russia or Belarus, including certain microelectronics, telecommunications items, sensors, navigation equipment, avionics, marine equipment, and aircraft components. This mostly includes items that were controlled for anti-terrorism (AT) purposes (i.e., for export to North Korea) and are lower levels of technology.
  • The rules exclude deemed exports/reexports. A deemed export/reexport is when controlled knowledge is conveyed even absent the transfer of an actual item (e.g., telling someone else how to make a plane engine). Deemed export rules apply to foreign nationals working in the United States, which may explain why deemed export/reexports are carved out. If they were not, any U.S. firm employing Russian/Belarusian nationals in covered technology areas would potentially be in violation of the new rules.
  • The February 24 rule also moves Russia into a more restrictive country group category (D:5, arms embargoed countries), which automatically imposes additional restrictions with respect to the de minimis amount of controlled U.S. content incorporated into foreign-made goods that will trigger application of the EAR.

Feb. 24 Commerce Fact Sheet–Applies a review policy of denial to license applications for exports, reexports to, or transfers within Russia.
Under the stringent licensing review policy being implemented, applications for the export, reexport, or transfer (in-country) of items that require a license for Russia will be reviewed, with certain limited exceptions, under a policy of denial. The categories reviewed on a case-by-case basis are applications related to safety of flight, maritime safety, humanitarian needs, government space cooperation, civil telecommunications infrastructure, government-to-government activities, and to support limited operations of partner country companies in Russia.

March 2 White House Fact Sheet–Note: March 2 rule extends this to Belarus and amends certain license exceptions.

What this means

  • All of the technologies and items that now have licensing requirements for either Russia or Belarus will be subject to a licensing policy of denial.
    • A policy of denial is significant. Previously a “presumption of denial” would be a big deal and some license applications would be able to overcome this presumption. Under a policy of denial, submitting a license application is an exercise in throwing time and money down the drain.
  • For the economy-wide rules, there will be case-by-case review of licenses for limited purposes (safety in flight, maritime, humanitarian, government space cooperation, civil telecommunications infrastructure, government-to-government activities, limited operations of partner country companies).
    • These limited case-by-case reviews are necessary to avoid dangerous situations arising in transportation or space (e.g., the International Space Station), if a technology export is necessary for the continued safe operation of these functions.
    • Certain telecoms exports may be permitted to allow for the continued access of the Russian/Belarusian population to communications from outside of Russia/Belarus.
    • The case-by-case reviews are intended to avoid unintended consequences that would be detrimental to U.S. interests or that would disproportionately impact the population.
  • License exceptions are available on a limited basis under the economy-wide rules. The regulatory notations and brief explanations are:
    • TMP: (technology that news media needs to do its job in Russia/Belarus; items must stay under control of the news media at all times)
    • GOV (allows exports intended for USG personnel in Russia/Belarus)
    • TSU (mass market software updates for civil end-users in U.S. or allied country companies)
    • BAG (allows persons leaving U.S. to export certain covered personal effects, excluding firearms and ammunition)
    • AVS (allows for continued operation of civil aircraft flights between U.S. and Russia; technically a plane would otherwise require a license to fly into Russia)
      • Note: The March 2 Belarus rule adjusted this exception to exclude Russian aircraft, reflecting the ban on Russian aircraft in U.S. airspace that was also announced that day.
    • ENC (commercial/mass market encryption)
      • Note: The March 2 Belarus rule narrowed this exception significantly so that it is only available to businesses owned by U.S. or allied countries. The rules for benefitting from this exception are complex and would not permit advanced encryption to be exported.
    • CCD (consumer communication devices, including mobile phones, modems, printers, etc.; this exception is only available for independent non-governmental organizations)
      • Note: This includes items such as consumer servers but only if used for personal purposes. The Belarus rule notes “consumer servers for home use…are intended to make it harder for the Russian government to control the messaging getting to the Russian people.”

Feb. 24 Commerce Fact Sheet–Expands the existing Russia ‘military end use’ and ‘military end user’ control scope to all items subject to the EAR.
With this final rule, restrictions on Russian ‘military end users’ and ‘military end uses’ cover all items subject to the EAR with exceptions for: (i) food and medicine designated as EAR99; and (ii) items classified as ECCN 5A992.c or 5D992.c, so long as they are not for Russian “government end users” or Russian state-owned enterprises.

March 2 White House Fact Sheet–Note: March 2 rule extends this to Belarus and eliminates the carve-out for items classified as ECCN 5A992.c or 5D992.c.

What this means

Background

  • Export controls can be applied through three mechanisms: list-based controls (the CCL, discussed above), end use (based on the anticipated end use of a technology export), or end user (targeted at specific entities).
  • The EAR previously included special provisions that allow for heightened controls on listed items if the items would be used for designated military end uses or sent to designated military end users in Russia (or other specified countries).

New changes

  • The February 24 rule significantly expands the scope of items subject to military end use/r restrictions for Russia. The March 2 rule applies these restrictions to Belarus for the first time. With the exception of food and medicine, no U.S. items subject to the EAR can be exported to Russia or Belarus if there is knowledge that it would be for a military end use/r (e.g., you cannot export pencils to the Russian military).
  • This applies to any export that may ultimately go to a military end use or military end user, even if you are not shipping directly to one of the 51 listed entities.
  • The Russian or Belarusian military is prohibited from receiving pencils, iPhones, or basically anything else that is not food or medicine.

Feb. 24 Commerce Fact Sheet–Adds two new Foreign Direct Product (FDP) Rules specific to Russia and Russian ‘military end users.’

March 2 White House Fact Sheet–Note: March 2 rule extends this to Belarus

What this means

Background

  • FDP rules have existed for decades and capture the limited circumstances in which an entirely foreign-made product is subject to U.S. export control authorities. In essence, FDP rules prevent you from using U.S.-origin tech to make a foreign product that could then be exported some place we do not want it to go. Note, this is different than U.S. technology that is incorporated into an end product, which is covered separately under the de minimis rules.
  • In 2020, a novel use of FDP was applied to Huawei to prevent it from being able to receive any semiconductors that were made using U.S. tools or software. Given the U.S. dominance in chip-making tools and software, this effectively choked Huawei off from the global chip supply.
  • The FDP has never before been applied to an entire country or to such a broad scope of items. If the Russia/Belarus FDP is the Huawei rule on steroids, then the Russia/Belarus-MEU FDP is the Huawei rule on bigger steroids x 51 (the number of listed entities).
  • FDP is inherently extraterritorial in nature. However, the fact that most other major producing nations (besides China) are joining in some sort of export controls against Russia and Belarus means that there will be overlap between application of the FDP extraterritorially and these allied measures. This is helpful, as allies will be active partners in enforcing these rules.

Feb. 24 Commerce Fact Sheet–Creates a new FDP rule for all of Russia (“Russia FDP rule”). To restrict Russia’s ability to acquire certain foreign-produced items, the Russia FDP rule establishes a control over foreign-produced items that are: (i) the direct product of certain U.S.-origin software or technology subject to the EAR; or (ii) produced by certain plants or major components thereof which are themselves the direct product of certain U.S.-origin software or technology subject to the EAR. This control applies when it is known that the foreign-produced item is destined to Russia or will be incorporated into or used in the production or development of any part, component, or equipment produced in or destined to Russia. The Russia FDP rule does not apply to foreign-produced items that would be designated as EAR99 (items not listed on the CCL), which includes many consumer items used by the Russian people.

March 2 White House Fact Sheet–Note: March 2 rule extends this to Belarus

New changes

  • The Russia/Belarus FDP rule establishes that a foreign-produced item located outside the United States is subject to the EAR, if the following applies.
    • Product scope: The foreign item:
      • Is not EAR99 and
        • Is the direct product of U.S.-origin technology or software specified in any ECCN in product groups D (software) or E (technology) in Categories 3-9; or
        • Is produced by any plant or major component of a plant that is itself a direct product as described in above bullet.
    • Destination scope: All such products going to Russia or Belarus, if there is knowledge that the item is destined to Russia/Belarus or will be incorporated into a product destined for Russia/Belarus. This includes exports and re-exports along the manufacturing chain, all of which will be covered if the end destination is Russia/Belarus.
    • There will be a licensing policy of denial.
    • The same limited set of license exceptions that apply to the economy-wide rules are available for the Russia/Belarus FDP rules.
    • Generally speaking, the Russia/Belarus FDP rules has the same product scope as the economy-wide rules described above for U.S.-origin technology. The Russia/Belarus FDP rule simply extends the application outside the United States, if the foreign product is made using U.S. technology or software or using equipment made from U.S.-origin technology or software.

Feb. 24 Commerce Fact Sheet–Creates a new foreign direct product rule for Russian military end users (“Russia-MEU FDP rule”). The Russia-MEU FDP rule is more extensive than the Russia FDP rule and applies to foreign-produced items that are: (i) the direct product of any software or technology subject to the EAR that is on the CCL; or (ii) produced by certain plants or major components thereof which are themselves the direct product of any U.S.-origin software or technology on the CCL. Such items will be subject to the EAR and require a license if an entity with a footnote 3 designation on the Entity List is a party to the transaction, or if there is knowledge that the item will be incorporated into or used in the production or development of any part, component, or equipment produced, purchased, or ordered by any entity with a footnote 3 designation (which is established in this rule and described below) on the Entity List. These restrictions apply to all items, including those designated EAR99, with certain exceptions, and impose a license requirement for footnote 3-designated Russian military end users.

March 2 White House Fact Sheet–Note: March 2 rule extends this to Belarus

What this means

  • The Russia/Belarus-MEU FDP rule is more extensive than the Russia/Belarus FDP rule and excludes extremely limited exceptions.
  • The Russia/Belarus-MEU FDP rule covers all classes of goods besides purely military items (which are already subject to high levels of controls under other authorities). The rule does this by including in its product scope:
    • All products included in the Russia/Belarus FDP rule;
    • EAR99 products; and
    • Additional ECCN categories, including 0 (Nuclear Materials, Facilities And Equipment and Miscellaneous Items]), 1 (Materials, Chemicals, Microorganisms and Toxins), 2 (Materials Processing).
  • A foreign product will be in scope if it:
    • Is the direct product of U.S.-origin technology or software specified in any ECCN in product groups D (software) or E (technology) in Categories 3-9; or
    • Is produced by any plant or major component of a plant that is itself a direct product as described in above bullet.
  • There will be a licensing policy of denial.
  • The Russia/Belarus-MEU FDP rules cover all goods except food and medicine.
  • The rule applies to the 49 Russian MEU and 2 Belarusian MEU entities listed on the Entity List and given a footnote 3 designation.

Feb. 24 Commerce Fact Sheet–Partner Country Exclusion from Russia and Russia-MEU FDP rules. Certain partner countries that are adopting or have expressed intent to adopt substantially similar measures are not or will not be subject to the Russia and Russia-MEU FDP rules. Exports, reexports, and transfers (in-country) from the following countries are not subject to these rules: Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.

March 2 White House Fact Sheet–Note: March 2 rule extends this to Belarus

What this means

  • Listed countries are excluded from the requirements of:
    • Russia/Belarus FDP and Russia/Belarus -MEU FDP rules and
    • De minimis provisions for certain lower-level technologies.
  • This exclusion represents a completely unprecedented level of allied cooperation on export controls. In essence, the United States has decided it does not need to apply the FDP rules in these countries because the same effect will be achieved through these countries own measure.
  • There is the added benefit that the allied countries will be active partners in enforcement efforts, rather than the United States attempting to enforce its own unilateral rules extraterritorially.

Feb. 24 Commerce Fact Sheet–Applies the Entity List footnote 3 designation and adds 49 entities.As described above, Entity List footnote 3 indicates that the Russia-MEU FDP rule applies to that entity. Thus, a license is required to export, reexport, or transfer (in-country) all items subject to the EAR (including foreign-produced items under the Russia-MEU FDP rule) to these entities, with limited exceptions. Footnote 3 also applies to the Russian Ministry of Defence, including the Armed Forces of Russia, wherever located. License applications for footnote 3-designated entities will be reviewed under a policy of denial in all cases. A total of forty-seven entities are being transferred from the MEU List to the Entity List and are being designated with footnote 3. In addition, BIS is adding two new Russian MEUs to the Entity List with a footnote 3 designation. Additional entities may be added in the future.

March 2 White House Fact Sheet–Note: March 2 rule extends this to Belarus.

What this means

  • This creates the list of 49 Russian and 2 Belarusian entities to which the Russia/Belarus-MEU FDP will be applied. This list will likely be added to as the economic escalation continues.
  • These listed entities are placed on the Entity List and are banned from receiving any U.S. origin technology. The footnote three reference indicates that they are also subject to the new Russia/Belarus-MEU FDP rules described above.
  • The product scope of the Entity List restrictions and the Russia/Belarus-MEU FDP are basically the same, with the FDP extending the application outside the United States, if the foreign product is made using U.S. tools and software or using equipment made from U.S.-origin technology or software. This parallels the approach taken with the economy-wide rules, where the product scope of the CCL restrictions is mirrored and extended extraterritorially with the Russia/Belarus FDP rule.

March 2 White House Fact Sheet–Targeting Entities Supporting the Russian and Belarusian Military. The Commerce Department, in coordination with its interagency partners, will add entities that have been involved in, contributed to, or otherwise supported the Russian and Belarusian security services, military and defense sectors, and/or military and defense research and development efforts to the Entity List. These actions will ensure that the military as well as the aerospace, maritime and high-technology sectors do not obtain U.S. technology goods and technology that can be used to support Russian technical maintenance and innovation.

  • The United States added 91 entities to the Entity List. While the majority of these were Russian entities, the new listings also included entities in Belize, Estonia, Kazakhstan, Latvia, Malta, Singapore, Slovakia, Spain, and the United Kingdom.
  • The rule clarified that these listings were not targeted at the countries noted, which includes major U.S. allies, but instead at specific entities believed to be supporting the Russian military.
  • The listings do not include a footnote 3 designation, meaning that the FDP rules have not been applied.

March 2 White House Fact Sheet–Export Controls Targeting Oil Refining, a Key Revenue Source that Supports Russian Military. Through export controls on oil and gas extraction equipment, the Commerce Department will impose restrictions on technology exports that would support Russia’s refining capacity over the long term. The United States and our Allies and partners do not have a strategic interest in reducing the global supply of energy – which is why we have carved out energy payments from our financial sanctions. But we and our Allies and partners share a strong interest in degrading Russia’s status as a leading energy supplier over time. These actions will help further that goal, while protecting American consumers.

What this means

  • The United States will impose tighter controls on oil and gas technology exports to Russia.
  • Similar to the export controls imposed after 2014 on deepwater, shale, and offshore Arctic oil and gas exploration and production equipment, the new controls are intended to constrain Russia’s long-term ability to produce energy, rather than hitting current production capabilities.
  • The new rules build on the prior rules by adding oil refining equipment to the scope of products requiring a license and impose a licensing policy of denial to both the existing controls and the newly added controls on oil refining equipment.

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Authors

  • Emily Kilcrease

    Senior Fellow and Director, Energy, Economics and Security Program

    Emily Kilcrease is a Senior Fellow and Director of the Energy, Economics, and Security Program at CNAS. Her research focuses on the U.S.-China economic relationship; alignment...