Right before the Labor Day Holiday, BIS issued amendments to the EAR which changed considerably the treatment of exports of items on the CCL to Libya. These changes were the inevitable result of the action of the State Department on June 30, 2006, which rescinded the designation of Libya as a state sponsor of terrorism.

Under the new rules a license will no longer be required for commodities that are EAR99 or that were controlled for anti-terrorism (“AT”) reasons. All other items on the CCL will require a license to Libya. Foreign made items on the CCL that incorporate a minimum of 25% U.S. origin content also will require a license. BIS has indicated that license applications for these commodities will be considered on a case-by-case basis and will not be subject to a presumption of denial.

A number of significant controls on exports to Libya remain unchanged after the BIS amendments. First, the BIS action has no effect on DDTC’s continuing policy of banning exports of defense articles and services to Libya.

Second, the BIS action does not affect existing restrictions on exports related to “installed base” items in Libya. “Installed base” items are items that were exported to Libya prior to April 29, 2004, the date on which the comprehensive embargo against Libya was lifted. U.S. companies cannot engage in any activities with respect to the “installed base” without a prior license or report to BIS. Whether or not a license or report is required depends upon the type of export. Exports of items that weren’t on the CCL, were on the CCL and were controlled for reasons other than anti-terrorism (“AT”) or national security (“NS”) reasons, or are subject to export to Libya pursuant to a license exception, only require a report. All others require a license prior to engaging in any activities regarding such “installed base” items.

Third and finally, although OFAC removed a number of Libyan enterprises and government officials from the SDN list back in April 2004 when the comprehensive embargo was lifted, there are still a number of Libyan individuals and entities who remain on the list. Unlicensed transactions with Libyan SDNs remain prohibited nowithstanding the BIS amendments.

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Copyright © 2006 Clif Burns. All Rights Reserved.
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