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US Commerce Dept Updates Ukraine Export Controls, Software Licensing

By Michelle Amodio, TMCnet Contributor

The U.S. Commerce Department’s Bureau of Industry and Security (BIS) updated its website recently to include new FAQs on Ukraine-related export control issues. These updates made clear some of the uncertainty surrounding Export Administration Regulations, 15 C.F.R. Parts 730-774 (EAR).

Among the long list of updated licensing policies are software and technology, and the new restrictions apply to any parties engaging in exports, re-exports, or in-country transfers.

Why the updates? The U.S. Commerce Department has done this in response to the situation in the Ukraine, and while the most complex aspect of the new import controls focuses heavily on oil and gas, the aim is to clear up any confusion within the export community.

Software delivery has changed from a physically transferred product to a product that is now most often distributed through electronic transmissions of the software code. We can thank the cloud for this. This change has naturally shifted how software suppliers interact with their customers, thus increasing the access of software to customers on a global scale. Previously, the EAR made no distinction between software transferred through the physical shipment of tangible items and electronic transmissions. This update aims to address that.

A software export under the EAR includes “any release of technology or software subject to the EAR in a foreign country,” or any release of “source code subject to the EAR to a foreign national.”

Typically, in the U.S., software companies’ unrestricted solutions and products may be delivered to most end users worldwide without a licensing requirement so long as they have undergone a one-time review by the U.S. government and qualify for License Exception ENC.

All transactions must undergo a compliance check to ensure that none of the parties to an order are listed on the U.S. Bureau of Industry and Security's Entity List.

The FAQs can be perused on the Treasury website.