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Global Category Intelligence
Q2 2025
Global Category Intelligence
Q2 2025
US Issues New Trade Sanctions Against Russia
March 1, 2022
The US government has implemented a new series of comprehensive trade sanctions that cover not only items shipped from the US, but also items shipped outside of the US when ultimately destined to Russia.
Export Control Classification Number (ECCN)
First, any item classified with an ECCN that begins with the digits 3, 4, 5, 6, 7, 8 or 9 requires a US export license to be shipped to Russia. This includes items exported from the US to Russia directly or indirectly, as well as applying to items physically located outside of the US, but still subject to the US Export Administration Regulations* (EAR). This means, unquestionably, if you intend to ship anything to Russia, you will need to have the item’s ECCN. If you do not have the ECCN of the item, your customer should be able to provide it (or supplier if it’s a component). If that ECCN begins with a digit from 3-9, you are not allowed to ship it to Russia.
Foreign-Direct Product Rule (FDP)
Second, the US has implemented a FDP for the entire country of Russia (Russia FDP). Essentially, this rule seeks to prohibit items manufactured outside of the US, but still using or relying on US technology (machines, software, designs, etc.). With the Russia FDP, the US government is striving to close a loophole whereby exports from the US are prohibited, so companies move the manufacturing of the item outside of the US to circumvent the US regulation. For example, if an item is being manufactured in Jabil Malaysia of Chinese components, one may initially believe there is no US jurisdiction on this item. However, the Russia FDP rule states that if the machinery/equipment (including tooling) OR software used to directly manufacture the product is of US origin, the item is subject to the EAR, and under US jurisdiction on export controls.
This includes not only production equipment, but also testing equipment. Items caught under the Russia FDP rule but classified as EAR99 are authorized to ship to Russia, but any item caught under the Russia FDP and has an ECCN is prohibited from shipping to Russia without a US export license, which is subject to a policy of denial.
Third, the US has implemented an FDP for military end users in Russia. As expected, this rule is even more restrictive, and any item, software, or technology, whether classified with an ECCN or classified as EAR99 is prohibited from shipping to Russia. There are no exceptions available under this rule, and any license applications are subject to a policy of denial. There are also restrictions if the purchaser/intermediate consignee is a Russian Military End User.
Recognizing some of its allies have enacted similar export control prohibitions against Russia, certain countries are exempt from the Russia FDP and the Russia FDP Military End User requirements described above. Currently, those countries are as follows: Australia, Canada, European Union, Japan, New Zealand, and the United Kingdom. For all other countries, the Foreign Direct Product Rules apply to all points in the Supply Chain, when you have the knowledge, the item is ultimately destined to Russia.
Key Takeaways
- The US government’s new export control restrictions against Russia are more prohibitive than any seen in recent history.
- Any item, subject to the EAR*, and classified with an ECCN that begins with a 3, 4, 5, 6, 7, 8 or 9 is prohibited from shipping to Russia without a US export license. Generally, any applications for US export licenses to Russia will be denied.
- Items manufactured (or tested) outside of the US may also be prohibited from shipping to Russia. These ‘foreign direct product rules’ state that if US origin technology (production equipment, testing equipment, software, etc.) is used to manufacture or test items outside of the US, they are still prohibited from shipping to Russia without a US export license in most cases. Again, generally export license applications to Russia will be denied.
- Jabil’s Global Trade Services (GTS) will be updated to block shipments to Russia. You can email “GTS_BLOCKS” to review your order if you have a blocked Sales Order or Delivery Note.
- Many other countries, including the EU countries, United Kingdom, Canada, Japan, and Taiwan are also issuing sanctions against Russia.
- The US Department of Treasury (OFAC) are implementing financial sanctions against Russia and Russian banks that may also affect any proposed / current business in Russia.
If you have any questions, or require additional assistance, please do not hesitate to contact me (Mike_Du@jabil.com) or Steven Gilbert (Steven_Gilbert@jabil.com) from the Global Trade Compliance team.
Mike Du, Senior Director, Global Trade Compliance
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