New BIS License Type C64 - (ACE) Authorized Cybersecurity Exports

On Thursday, October 21, 2021, the Department of Commerce, Bureau of Industry and Security (BIS) published an interim final rule (https://www.govinfo.gov/content/pkg/FR-2021-10-21/pdf/2021-22774.pdf) that becomes effective January 19, 2022. This interim final rule establishes a new control on cyber security items and a new License Exception "Authorized Cybersecurity Exports" (ACE) that authorizes exports of these items to most destinations except in the circumstances described in the rule. As a result of this rule, the following changes will be made to the Automated Export System (AES) in order for exporters and authorized agents to successfully report electronic export information in the AES.

The Addition of Two Export Control Classification Numbers (ECCN)

ECCNs 4A005 and 4D004 will be added to the AES ECCN reference table.

Note: By using any of the License Exceptions or "No License Required" (NLR), you are certifying that the terms, provisions, and conditions described in the Export Administration Regulations (EAR) have been met.

A New License Code Has Been Added to the AES

An update has been made to AES to create a new License Code C64 Authorized Cybersecurity Exports (ACE) that authorizes exports, reexports and transfers (in-country) of cybersecurity items and certain IP network surveillance products, which are not also controlled in Category 5-Part 2 of the Commerce Control List (CCL) or for Surreptitious Listening (SL) reasons. License Exception ACE allows the export, reexport and transfer (in- country) of "cybersecurity items" to most destinations, except to destinations listed in Country Groups E:1 and E:2 of supplement no. 1 to part 740 of the EAR. (https://www.bis.doc.gov/index.php/documents/regulations-docs/2255-supplement-no-1-to-part-740-country-groups-1).

AES filers must adhere to the following new reporting when using C64 (ACE) to prevent the return of fatal errors from AES.

• Report License Code: C64 Authorized Cybersecurity Exports (ACE)
• Allowable ECCNs: The following ECCNs are eligible 4A005, 4D001, 4D004, 4E001, 5A001, 5B001, 5D001, and 5E001 to the extent permitted under part 740 of the EAR and the respective ECCN entry.
• Allowable Export Information Codes: All except UG
• Allowable Modes of Transportation: All except "70" (Fixed Transport)

As a result of this, if the exception control code or the license number is "ACE" , then "C64" is reported.