On December 23, 2020, the Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) to remove the People’s Republic of China (PRC or China) Special Administrative Region of Hong Kong from the list of destinations in the Export Administration Regulations (EAR). This decision is effective immediately.

This rule implements a significant change for Hong Kong, which had previously been in different country groups, eligible for different license exceptions, and subject to different license requirements than China throughout the EAR.

A notable change for those engaging in trade with or through Hong Kong will be that Hong Kong, as part of China, will now effectively fall in Country Group D, which will affect license exception availability.

The removal of Hong Kong as a destination under the EAR also applies to the Electronic Export Information (EEI) Filing to the Automated Export System (AES); the EEI filing requirement for China applies to exports to Hong Kong for purposes of the EAR, even if the AES requirements state that the destination filed in EEI is to be listed as Hong Kong.

Essentially, all exports with an Export Control Classification Number (ECCN) (except EAR99 or under exception) regardless of value going to Hong Kong must now be filed in the Automated Export System.

Please refer to the full Federal Register Notice for details.

Shapiro will continue to monitor the situation and provide status updates as they become available.