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Pakistan has a nuclear program and a missile program that are subject to end-use and end-user restrictions pursuant to Part 744 of the Export Administration Regulations (EAR) (15 C.F.R. Parts 730-774).

Accordingly, this guidance highlights:

I. The supplemental licensing requirements applicable to exports, reexports, and transfers (in-country) of items subject to the EAR that may be destined                      to nuclear or missile activities;

II. Restrictions on specific activities of U.S. persons; and

III. Best practices for screening customers in Pakistan to prevent diversion of items subject to the EAR to unauthorized end uses and end users.

EAR Overview

Persons (both U.S. and non-U.S. persons, including individuals, entities, corporations) engaged in exports, reexports, and transfers (in-country) subject to the EAR, must determine whether a license is required prior to proceeding with such transactions. In addition to Commerce Control List (CCL)-based licensing requirements determined by the export control classification number (ECCN) of your product(s) and their destination(s), you should review license requirements in Part 744 (Control Policy: End-User and End-Use Based) and Part 746 (Embargoes and Other Special Controls) of the EAR.

The supplemental licensing requirements found in Part 744 of the EAR, including several provisions relevant for trade with Pakistan, may apply to items designated “EAR99” (i.e., subject to the EAR but not listed on the CCL), as well as to CCL items not otherwise subject to a license requirement based on the country of destination. You must also follow the “Know Your Customer” Guidance in Supplement No. 3 to Part 732 of the EAR, which will help you to understand your duty of care when red flags arise in the course of your business. To facilitate your compliance with Part 744 and Supplement No. 3 to Part 732 of the EAR, the Bureau of Industry and Security (BIS) is publishing this additional guidance specific to Pakistan.

Restrictions on Exports and Reexports to Certain Nuclear- and Missile-Related Activities

In 1992, BIS imposed end-use restrictions on items not specifically listed on the CCL when destined for certain missile-related activities in certain destinations, including Pakistan.[1] In 1998, Pakistan detonated a nuclear explosive device. In response, BIS imposed supplemental licensing requirements on certain entities in Pakistan determined to have been involved in nuclear or missile activities and added such entities to the Entity List (Supplement No. 4 to Part 744 of the EAR).[2] The Entity List imposes supplemental licensing requirements on foreign entities involved in activities contrary to U.S. national security and foreign policy. Recently, BIS has added additional entities in Pakistan to the Entity such as:

BIS has also added entities located in other countries to the Entity List due to their involvement with Pakistan trade, such as:

Furthermore, BIS Office of Export Enforcement (OEE) investigations have revealed schemes to export items subject to the EAR to nuclear- and missile-related entities in Pakistan listed on the Entity List without the required licenses.[7]

In addition to the restrictions set forth in Section 744.11 of the EAR that apply to entities listed on the Entity List, any item subject to the EAR, whether or not subject to a CCL-based licensing requirement, may require a license if destined to certain nuclear- or missile-related activities in Pakistan. These end-use-based licensing requirements apply to items designated EAR99, as well as items listed on the CCL:

Restrictions on Specific Activities of U.S. Persons

The EAR had long restricted certain U.S. person activity with regard to missiles or chemical and biological weapons activity, even when the activity did not involve items subject to the jurisdiction of the United States. However, these controls had not been updated in many years, until March 2021, when license requirements were expanded for U.S. person activity pursuant to new authority in the Export Control Reform Act of 2018 (ECRA).[8]

To avoid overlapping license requirements across U.S. government agencies, BIS has clarified that § 744.6 of the EAR does not regulate U.S. person activities that require a license from or are prohibited by another federal department or agency, including the Departments of Energy, State, or the Treasury. The issuance of a BIS license also does not authorize U.S. persons to engage in any conduct that is otherwise prohibited by U.S. law, including any criminal statute.

Due Diligence/Best Practices

To ensure compliance with these provisions of the EAR, in addition to screening customers against the U.S. Government’s Consolidated Screening List (CSL)[9], which includes BIS’s Entity List, exporters, reexporters, and transferors (in-country) of items subject to the EAR are also advised to conduct additional due diligence to identify and resolve red flags associated with transactions potentially destined to nuclear- or missile-related activities, in accordance with the “Know Your Customer” Guidance set forth in Supplement No. 3 to Part 732 of the EAR. In addition, exporters, reexporters, and transferors (in-country) are encouraged to do the following: