US: No More Controlled Defense Exports to Hong Kong

"With the Chinese Communist Party’s imposition of new security measures on Hong Kong, the risk that sensitive U.S. technology will be diverted to the People’s Liberation Army or Ministry of State Security has increased, all while undermining the territory’s autonomy. Those are risks the U.S. refuses to accept and have resulted in the revocation of Hong Kong’s special status".Wilbur Ross, U.S. Secretary of Commerce

Who? The Commerce Department When? 2 June 2020 Document: Press Release and Details of suspension of licence What happened? 1. The US Commerce Department has suspended the preferential treatment to Hong Kong over China, including the availability of export license exceptions.

2. Further actions to eliminate differential treatment are also being evaluated.

Why does it matter? US and non-US businesses make use of export license exceptions to supply strategic items under control to Honk Kong. Having a valid licence exception allows a business to export or re-export, under stated conditions, items subject to the Export Administration Regulations (EAR) that would otherwise require a license. This covers items that fall under the jurisdiction of the Department of Commerce and not items that are controlled by the State Department or some other agency. If a licence exception is revoked, business need to apply for a licence with BIS. This can lead to a delay or even stop commerce altogether.

What can I do?

  1. Get more details on what happened - read the press releases and notifications*.

  2. Read our Technical Explainer Briefing on Hong Kong (Free for All Subscribers)

  3. Understand granular details - what legal changes have been made and what export licence is concerned*

  4. Get US Export Control Training

Note: Links marked with * are accessible to ADVANCED subscribers. Expert to Contact

Arne Mielken

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