US Announces Suspension of License Exceptions on Certain Exports to Hong Kong

Yesterday, the US announced that it would be suspending License Exceptions for certain exports of defense equipment and high-technology products to Hong Kong. These items include exports to Hong Kong, re-exports to Hong Kong and in-country transfers of items subject to the Export Administration Regulations (EAR).

The announcement comes as no surprise after President Trump revoked Hong Kong’s preferential treatment on May 29, at which time he promised that impending changes “will affect the full range of agreements that we have with Hong Kong, from our extradition treaty, to our export controls and technologies.”

According to US officials, the newest restrictions are a direct result of China’s imposition of new security measures in Hong Kong, which threaten its independence and thereby raise the risk that certain US products will fall into the hands of China, Iran or North Korea.

Although the changes go into effect immediately, shipments of items that are now removed from eligibility may proceed to their destination if they “were on dock for loading …laden aboard an exporting or transferring carrier, or en route aboard a carrier to a port of export or re-export on June 30, 2020, pursuant to actual orders for export to Hong Kong, re-export to Hong Kong, or transfer within Hong Kong.”

Similarly, any export/re-export transactions involving Hong Kong persons authorized under a License Exception eligibility prior to June 30, 2020 may continue to be authorized under such provision until August 28, 2020. However, exporters taking advantage of this must maintain documentation demonstrating that the Hong Kong recipient was hired and provided access to technology eligible for Hong Kong under part 740 prior to June 30, 2020.

Click here to view the complete list of all of the AES License Type codes and reporting instructions for these types of products.

Click here to read the full statement from the US Secretary of State.

Click here to read the full statement from the US Secretary of Commerce.

Shapiro will continue to monitor the situation and provide status updates as they become available.

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