Military End Use List (MEU)

Parties Listed on the MEU

Initially, 103 entities were listed in Supplement no. 7 to part 744.  These organizations are associated with the People’s Republic of China (including Hong Kong), Cambodia, Russia, and Venezuela.  It is expected that additional organizations associated with Burma and will be added. 

It should be noted that the Military End Use List is not exhaustive.  Parties not on the list may still be subject to legal prohibitions.  Exporters should consider if their transactions could involve any branch of a nations armed services, national intelligence, national guards, or national police. 

Additional prohibitions would extend to entities identified by the Department of Defense under the National Defense Authorization Act Section 1237.

Expanded Definitions

Under §744.21(f) the EAR defines military end use as:

• An item on the U.S. Munitions List
• An item with an ECCN classification ending in A018
• Any item that contributes to the operation, installation, maintenance, repair, overhaul, refurbishment, development, or production of military items described in the USML or the ECCN ending in A018 or a 600 series ECN

Previously these restrictions applied only to items for the use, development, production of, or incorporation into military items.  Under the new regulations an item that meets a single element of the new definition of “use” will now require a license.

Foreign Direct Product Rule

The Department of Commerce has also amended the EAR by clarifying the scope of the Foreign Direct Product Rule (FDPR).   This amendment prevents listed entities in certain nations from receiving any foreign-produced items that were incorporated or were produced with controlled U.S.-origin technology or software without a license.  This requires firms that use U.S. production technology or software to make technology overseas to obtain a U.S. license before exporting to controlled countries.

Foreign Policy Issues Driving Export Regulations

These regulations address instances where military organizations are merged into civil organizations that provide fronts for their objectives and actions.  These institutions are prevalent in the People’s Republic of China.  They can also apply to nations that have institutions covertly controlled by Chinese interests as in the case with Cambodia.

The Bureau of Industry and Security (BIS), which administer the EAR is not the only agency to be affected by these events.  The U.S. Department of Treasury, through the Office of Foreign Assets Control, blocks assets of Special Designated Nationals (SDNs) and prohibits U.S. persons from conducting business with them.  The treasury department has continued to expand its list of SDNs.

What MEU Changes Hold for Business

Changes in the Military End Use List complicate an already intricate landscape of export regulations.  This means that organizations intending to export, reexport, or transfer “dual use” items in-country should exercise extra due diligence when addressing this additional license requirement. 

Companies involved in export cannot afford to overlook any details.  Correct classification of items and thorough screening of customers is essential.   

CVG Strategy Export Compliance Expertise

CVG Strategy export compliance can assist your team with consultant services including classifications and license applications.  We can also tailor an export compliance program to fit the specific needs of your organization.

While many export compliance providers offer programs geared toward compliance with a single set of regulations, CVG Strategy offers a harmonized program that will ensure that your company is compliant to all regulations.  Furthermore, we consolidate this program in a collection of documents that can be integrated into a quality management system. 

The CVG Strategy team has over 20 years of experience in U.S. export controls.  We can help you develop an ITAR Compliance Program appropriate to your organizations requirements and provide training to prevent occurrences.   We also have the experience to assist in guidance when unforeseen incidents do occur to develop strategies to prevent future violations.