BIS Issues Guidance on Addressing Export Diversion Risks

On July 10, the Department of Commerce’s Bureau of Industry and Security (BIS) published guidance on how to identify parties that present a heightened risk of diversion to Russia’s military-industrial sector, as well as information about the various mechanisms BIS uses to inform companies about these parties. The guidance also outlines certain responsibilities companies have to comply with BIS regulations and additional steps to mitigate diversion risks.

The most notable update is that BIS now strongly encourages companies to screen transaction parties against those identified on the Trade Integrity Project website. The Trade Integrity Project (TIP) is an initiative of the UK-based Open-Source Centre and the website monitors military and dual-use trade with Russia. Specifically, the website identifies entities that have shipped Common High Priority List (CHPL) items to Russia since 2023. The CHPL includes a number of items used to produce Russian weaponry – including, but not limited to, electronic integrated circuits and fixed capacitors – and are controlled for export. Companies that produce or sell CHPL items should closely scrutinize parties identified on the TIP website to determine whether any red flags are present before proceeding with an export, reexport, or transfer.

Please contact our sanctions and export team with any questions regarding these latest developments, or if you require assistance with screening your products or customers and related risk reduction strategies for your supply chains.