On July 19, 2021, the US Department of Commerce’s Bureau of Industry and Security (“BIS”) published a final rule (“Final Rule”) adding six Russian organizations to the Entity List.  These designations are related to Executive Order 14024, “Blocking Property With Respect To Specified Harmful Foreign Activities of the Government of the Russian” (“EO 14024”) that was signed by President Biden in April 2021.  EO 14024 authorizes the imposition of sanctions in response to Russian efforts that threaten US national security, including against a wide range of parties involved in the technology and defense sectors of the Russian economy.  A license from BIS will be required to export, reexport, or transfer to or through these parties any items (i.e., goods, software, technology) subject to the Export Administration Regulations (“EAR”), subject to a policy of denial. 

According to the Final Rule, these Russian parties were added to the Entity List for acting contrary to US national security.  The Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) placed these six entities on its Specially Designated Nationals and Blocked Persons List earlier this year.  See our prior blog post on these developments here.  The fact that BIS designated Russian parties to the Entity List that were recently designated as Specially Designated Nationals may indicate a return to the Obama-era policy of BIS routinely adding to the Entity List parties that have been designated as SDNs.

The Final Rule also updates the entry in the Entity List for the Federal Security Service (“FSS”) to reflect the carve-out for activities now authorized under Cyber General License 1B (“GL 1B”).  GL 1B was updated by OFAC in March 2021 when additional US sanctions were imposed on the Federal Security Service (“BIS).  A BIS license is required for all items subject to the EAR intended for the FSS, apart from transactions authorized by GL 1B. 

The authors gratefully acknowledge the assistance of Ryan Orange in the preparation of this blog post.

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