The rule comes after a decision in May 2021 by the forty-three (43) participant countries in the Australia Group (“AG”) to update the AG Common Control List to include biological equipment, technology and software that could be used to manufacture biological weapons.
On October 5, 2021, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) published a final rule in the Federal Register that places new controls on software and technology that can potentially be used for manufacturing biological weapons. The rule comes after a decision in May 2021 by the forty-three (43) participant countries in the Australia Group (“AG”) to update the AG Common Control List to include biological equipment, technology and software that could be used to manufacture biological weapons. The AG is an international organization made up of countries dedicated to the eradication of chemical and biological weapons.
BIS is implementing this rule by amending the Commerce Control List to add a new Export Control Classification Number (“ECCN”) 2D352. This new ECCN only applies to software that is (1) designed for nucleic acid assemblers and synthesizers described on the Common Control List; and (2) capable of designing and building functional genetic elements from digital sequence data. Specifically, ECCN 2D352 “applies to software that is designed for nucleic acid assemblers and synthesizers capable of designing and building functional genetic elements from digital sequence data.” Software controlled under the new ECCN 2D352 requires a license for chemical and biological weapons (“CB”) and anti-terrorism (“AT”) reasons when exported, reexported or transferred (in-country) to the destination countries identified in CB Column 2 and AT Column 1.
Additionally, the final rule amends ECCN 2E001 to include export controls on the “technology” for the development of software controlled by the new ECCN 2D352. Technology classified under ECCN 2E001 is controlled for CB and AT reasons and requires a license for export, re-export or transfer (in-country) to the destination countries identified in CB Column 2 and AT Column 1.
During the comment period, certain interested parties expressed concern that the definition is too broad and that controls for these types of software should be implemented multilaterally. BIS rebuffed these comments explaining that the new ECCN 2D352 only applies to software that is designed for nucleic acid assemblers and synthesizers and that controls for this software are multilateral since they are being implemented by all Australia Group member states. These new licensing requirements will likely apply to labs, life science companies, universities and research institutions engaged in research that involves such software and related development technology.
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Cortney O’Toole Morgan is a Washington D.C.-based partner with the law firm Husch Blackwell LLP. She leads the firm’s International Trade & Supply Chain group.
Grant Leach is an Omaha-based partner with the law firm Husch Blackwell LLP focusing on international trade, export controls, trade sanctions and anti-corruption compliance.
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