GT Alert

Relaxed Export Rules For Libya

December 2005

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The U.S. Department of Commerce issued an interim rule that would further relax regulatory restrictions on Libya by authorizing a new export license exception applicable to the export and reexport of certain commodities. While Libya does remain a designated state sponsor of terrorism, and thus restrictions on exports and reexports to Libya still remain in effect, Commerce takes the position that this new license exception would facilitate the ability of U.S. persons to do business in Libya without adversely jeopardizing U.S. national security or foreign policy interests with respect to Libya.

Background

On April 23, 2004, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued a general license that removed most economic sanctions against Libya. However, any goods, services, or technology of U.S. origin must comply with restrictions on exports and reexports to Libya under the Export Administration Regulations (“EAR”)1 administered by the Commerce Department’s Bureau of Industry and Security (“BIS”) and the International Traffic in Arms Regulations (“ITAR”)2 administered by the U.S. Department of State, Directorate of Defense Trade Controls (“DDTC”), as applicable. This general license effectively transferred primary jurisdiction over exports to Libya from OFAC to BIS and DDTC on April 29, 2004.

On September 20, 2004, President Bush ended the national emergency with respect to Libya and terminated the remaining economic restrictions and sanctions, which resulted from the emergency. On March 22, 2005, BIS published an amendment to the EAR to implement certain changes in addition to those made in the April 29th rule. At that time, BIS recognized the need to support U.S. industry’s participation in Libya’s newly-opened market, yet also protect U.S. national security interests.

Interim Rule Regarding Libya

Most recently, on November 16, 2005, BIS published an interim rule regarding changes to the EAR applicable to the export and reexport of certain commodities to Libya. This interim rule establishes a new license exception called United States Persons In Libya (“USPL”), which authorizes the export and reexport to U.S. persons in Libya of certain items on the EAR’s Commerce Control List (“CCL”) and controlled for anti-terrorism (“AT”) reasons.

Commodities exported or reexported to Libya pursuant to license exception USPL and not consumed or destroyed in the ordinary course of business may be returned to the U.S. without authorization from BIS, or such items may be reexported to a third country consistent with the provisions of the EAR applicable to such reexports. BIS views this change to the EAR as facilitating the ability of U.S. persons to do business in Libya without adversely jeopardizing U.S. national security or foreign policy interests with respect to Libya.

Commodities Eligible For The New License Exception

The following commodities listed below are all eligible for license exception USPL when they are exported or reexported to Libya and consigned to and for use by U.S. persons and their employees only.

1. Portable electric generators (ECCN 2A994)
2. Electronic devices (ECCN 3A991)
3. Electronic equipment (ECCN 3A992)
4. Test and inspection equipment for electronic components (ECCN 3B992)
5. Computers (ECCN 4A994)
6. Telecommunications equipment (ECCN 5A991)
7. Encryption hardware (ECCN 5A992)
8. Information security software (ECCN 5D992)
9. Diesel engines (ECCN 9A990)

Despite the fact that no export license would be required for exports or reexports of the above-listed commodities to U.S. persons in Libya, the exporter would still be required to comply with all other provisions of the EAR, including party screening and record-keeping requirements.

Conclusion

Commodities that are subject to the EAR and not specifically identified above as eligible under license exception USPL continue to require an export license if exported or reexported to U.S. persons in Libya, unless otherwise exempted. Also, all commodities subject to the EAR and controlled for AT-reasons continue to require a license for the export or rexport to non-U.S. persons in Libya, unless otherwise exempted.

Footnotes

1 See 15 C.F.R. Parts 730-774 (2005).

2 See 22 C.F.R. Parts 120-130 (2005).

This Alert was written Fred Shaheen, Natalia Geren and Julia Sorrintino DiMento in our Export Control practice in the Tysons Corner, Virginia office. Please contact Mr. Shaheen at 703-749-1367, Ms. Geren at 703-749-1367, or Julia Sorrintino DiMento at 703-903-7586 or your Greenberg Traurig liaison if you have any questions regarding the subject matter of this Alert.

© 2005 Greenberg Traurig

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