On March 16, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) will formally publish a final rule imposing sanctions on certain “luxury goods” destined for Russia and Belarus and certain “Russian and Belarusian oligarchs and malign actors.”
The new regulations define “luxury goods” in terms of Schedule B Numbers as part of a new Supplement No. 5 to Part 746 of the Export Administration Regulations (the “Luxury Good List”). Every item exported from the United States can and must be classified within a Bureau of the Census Schedule B number. While Schedule B numbers are very similar to Harmonized Tariff Schedule numbers, they are not identical. The list of impacted Schedule B numbers includes products in the following general categories:
- alcoholic beverages
- tobacco products
- makeup and perfumes
- certain clothing
- camping goods
- jewelry and gemstones
- marine engines
- passenger vehicles and parts
- motorcycles and parts
View the complete list of impacted Schedule B Luxury Goods.
Under this new rule, exports, reexports, or transfers of “luxury goods” to or within Russia or Belarus will require a BIS export license and requests for such licenses will be reviewed with a presumption of denial. Further, such “luxury goods” may not be sent anywhere in the world, if the intended recipient of such goods is a Russian or Belarusian oligarch or malign actor, as designated by the Department of the Treasury, Office of Foreign Assets Control (OFAC) on its List of Specially Designated Nationals and Blocked Persons (SDN List).
Given the foregoing, U.S. entities with sales in Russia are urged check the Schedule B numbers of its products against the Luxury Good List to determine what further steps might be necessary to comply with this new BIS sanction.
For questions or fact-specific guidance regarding your supply chain, please contact Jan de Beer, Katie Berkley, Chanhee Han, or any attorney with Frost Brown Todd’s International Services practice group.
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