U.S. implements new export controls on toxins, plant pathogens and biological equipment

On 13 January 2023 the US Department of Commerce’s Bureau of Industry and Security (BIS) issued a final rule amending the Export Administration Regulations (EAR) to reflect recent decisions by the Australia Group¹ in 2021 and 2022. The final rule is available here, and became effective upon publication in the Federal Register on 17 January 2023.

Changes to ECCNs 1C351, 1C353, 1C354 and 1E001

Most notably, the final rule amends Export Classification Control Number (ECCN) 1C353 to clarify that the controls on genetic elements and genetically modified organisms include, inter alia, any gene(s) or translated product(s) specific to any controlled virus (as listed in ECCN 1C351). This change effectively expands BIS’ definition of “genetic elements” because the text in ECCN 1C353 previously referred only to the risk posed by the nucleic acid itself, and not to transcribed or translated products (which were only controlled with respect to bacterial and fungal genetic elements as described in ECCN 1C353a.2.a). 

Additionally, BIS amended the “Human and Animal Pathogens and Toxins” List of ECCN 1C351.d by adding four marine toxins (brevetoxins, gonyautoxins, nodularins and palytoxin) and removing the cholera toxin.  BIS also expanded controls under ECCN 1E001 to control “technology” for the “development” or “production” of these additional four marine toxins.

BIS also updated nomenclature for certain plant pathogens controlled under ECCN 1C354.

Revision to the definition of “disinfected”

The final rule also revises the definition of “disinfected” in the Technical Note following ECCN 2B352.d.2 to more closely reflect the use of this term by the scientific and industrial communities (“denotes a process to reduce the number of microorganisms, but not usually of bacterial spores, through the use of chemical agents, without necessarily killing or removing all organisms”).

Savings clause

The final rule includes a savings clause allowing shipments of items now controlled under this new rule that were on dock for loading, on lighter, laden aboard an exporting carrier or en route to port of export as of 18 March 2023 (60 days from publication of the final rule in the Federal Register), pursuant to actual orders for export, reexport or transfer (in-country) to a foreign destination, to proceed to that destination under the previously applicable license exception or without a license (NLR) so long as they are exported, reexported, or transferred (in-country) before midnight on 18 March 2023 (i.e., by 11:59 pm EDT 17 March 2023). Any items not actually exported, reexported or transferred (in-country) before this time will require a license. “Deemed” exports of ECCN 1E001 “technology” and “source code” removed from eligibility under a license exception or NLR due to these regulatory changes may continue to be exported without a license until midnight on 18 March 2023 (i.e., by 11:59 pm EDT 17 March 2023).

Impact of emerging and foundational technologies

When issuing these changes, BIS noted that this review does take account of emerging and foundational technologies. In the preamble to the rule, BIS stated:

BIS identified the synthesis and collection of the four marine toxins for evaluation according to the criteria in Section 1758 of the Export Control Reform Act of 2018 (ECRA), 50 U.S.C. 4801-4852, pertaining to emerging and foundational technologies. Other considerations prompted the decision to remove cholera toxin from the list of “Human and Animal Pathogens and Toxins.” At the time of its inclusion on this AG common control list, cholera toxin did not have any significant commercial or medical uses. However, in recent years, there has been a significant increase in biomedical research involving cholera toxins and in the use of cholera toxin in biomedical applications. Furthermore, cholera toxin, by itself ( i.e., in the absence of live bacteria), is known to have limited cytotoxicity ( e.g., compared to other toxins such as botulinum, saxitoxin, or ricin), and cannot be transmitted from person to person. Cholera toxin has not been the major focus of a biological weapons research program, although it may have been evaluated for such purposes. Consequently, the removal of chemical/biological (CB) controls on cholera toxins is not expected to have a significant impact on the proliferation, development, production or use of biological weapons, nor would the relative costs of such controls ( e.g., in terms of their impact on public health and on biomedical and related research) be justified going forward.

Next steps

Companies that engage in work involving controlled viruses, toxins, plant pathogens and biological equipment, as well as related “technology,” should ensure that their export compliance procedures are consistent with the new restrictions.  Please reach out to a Hogan Lovells contact listed above with any questions.