Late last month, the U.S. Department of Commerce's Bureau of
Industry and Security ("BIS") issued a final rule amending the Export
Administration Regulations ("EAR") to facilitate certain
exports and reexports from the United States to India. The rule is
intended to implement portions of the two countries' June 7,
2016, Joint Statement: The United States and
India—Enduring Global Partners in the 21st Century
("Joint Statement"), which, among other things,
recognized the United States and India as major defense partners.
As part of that recognition, the United States committed to
continue to: (i) work toward facilitating technology-sharing with
India to a level commensurate with that of its closest allies and
partners; and (ii) facilitate the export of goods and technologies,
consistent with U.S. law, for projects, programs, and joint
ventures in support of official U.S.–India defense
Further reflecting India's commitment to preventing
proliferation of weapons of mass destruction and their means of
delivery, shortly after issuance of the Joint Statement, India
joined the Missile Technology Control Regime ("MTCR"),
which aims at limiting the spread of ballistic missiles and other
unmanned delivery systems that could be used for chemical,
biological, and nuclear attacks. In preparation for its entry into
the MTCR, India was required to strengthen its export controls,
thereby potentially making it easier for other MTCR countries, such
as the United States, to justify transferring sensitive technology
The January 2017 amendments to the EAR implement two significant
measures to facilitate such transfers. First, the amendments to the
EAR establish a general policy of approval for license applications
relating to exports or reexports to or transfers within India of
items subject to the EAR and controlled only for national security
or regional stability reasons.
Second, BIS amended the end-use and end-user provisions of its
Validated End User ("VEU") program,
which enhances high-technology civilian trade between the United
States and VEU-eligible countries (currently China and India), to
allow for items obtained under the program in India to be used for
either civil or military end uses, except for items that are for
use in nuclear, missile, or chemical or biological weapons
activities. Use of the program reduces the licensing burden on
industry by allowing U.S. exporters to ship designated items to
preapproved entities under a general authorization instead of
individual export licenses. Entities in India that are approved to
participate in the VEU program will: (i) receive shipments of
designated items subject to the EAR on an expedited basis; and (ii)
have more certainty and reliability regarding the receipt of items
subject to the EAR that are included in their VEU
We will continue to follow developments relating to U.S. export
control policy with respect to India and are available to assist
companies in applying for licenses for exports and reexports to
India or in obtaining VEU status.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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