On October 14, 2023, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) published in the Federal Register a final rule that amends the Export Administration Regulations, 15 C.F.R. parts 730-774 (“EAR”), “by adding additional nuclear nonproliferation controls on China and Macau.” Changes specifically apply to “items controlled for Nuclear Nonproliferation (NP) column 2 reasons for control.” The rule is effective as of October 11^th, 2023. 

Concurrently, the Nuclear Regulatory Commission (“NRC”) also published an Order in the Federal Register suspending General License authority to export special nuclear material, source material, and deuterium for nuclear end use to China.

Background

Items subject to the EAR and listed on the Commerce Control List (“CCL”) (Supplement No. 1 to part 774) are controlled for a variety of reasons.  The reasons for control stem from various international treaties and multilateral obligations, as well as certain unilateral controls that are only implemented in the US.  The Nuclear Suppliers Group (“NSG”) is a multilateral group of nuclear supplier countries that seek to contribute to the nonproliferation of nuclear weapons through implementing certain guidelines regarding nuclear exports and nuclear-related exports. 

BIS implements certain of those guidelines related to exports of nuclear-related dual use items that are subject to the EAR.  Such nuclear-related items that are controlled pursuant to the guidelines from the NSG are listed in Export Control Classification Numbers (“ECCNs”) on the CCL that are controlled for NP1 reasons.  Items controlled for NP1 reasons require a license to all destinations expect NSG member countries listed in Country Group A:4.

BIS also implements certain unilateral controls on certain nuclear-related items that are subject to the EAR and specified on the CCL.  Such items are controlled for NP2 reasons and require a license when destined to Country Group D:2 countries.

Amendments to EAR

This rule expands the scope of nuclear nonproliferation export controls for China and Macau, by adding license requirements for “items that could contribute to nuclear activities of concern.” Existing export controls required a license “for items controlled for NP1 reasons to China,” but “prior to this rule, neither China nor Macau were subject to NP2 reasons for control.” 

While China is a NSG member country, it is not listed in Country Group A:4.  Accordingly, a license is required for items controlled for NP1 reasons to China and Macau.  Prior to this rule, neither China nor Macau were subject to the NP2 controls, except for certain items controlled for NP2 reasons that were listed in Supplement No. 2 to part 744 when destined for a military end-use or military end-user in China.

This final rule makes the below changes to the EAR:

• “Applies NP2 reasons for control to China and Macau in the Commerce Country Chart (supplement no. 1 to part 738). This imposes a license requirement for NP2 controlled items destined for China or Macau.”
• “Adds China and Macau to § 742.3(a)(2) to impose the license requirements on the NP2 controlled items.”

NRC Order

In addition to the amendments to the EAR, the NRC published an Order the same day that suspended certain general licenses to export special nuclear material, source material, and deuterium for nuclear end use to China.  Specifically, the NRC suspended the general license authority in 10 CFR 110.21 (General license for the export of special nuclear material), 110.22 (General license for the export of source material), and 110.24 (General license for the export of deuterium for nuclear end use) for any exports to destinations in China.  This general license authority is suspended effective as of August 14, 2023, and remains in effect until further notice.