U.S. aerospace companies could face new complications in dealing with Chinese and Russian partners and customers after the U.S. Department of Commerce today published a new Military End User (MEU) List requiring export licenses for exports, re-exports, and in-country transfers of equipment and technology. The list names 103 foreign entities, of which 58 are in China and 45 in Russia.
The U.S. government said the action is necessary to prevent American-made civil aviation products from being diverted for military use. The action comes barely a week after the outgoing Trump Administration blacklisted Chinese drone maker DJI and introduced rules to enable Chinese public companies to be barred from U.S. stock markets if they fail to comply with financial reporting requirements.
Included on the list are leading aerospace groups such as China’s AVIC and COMAC, including AVIC’s General Aviation division, as well as Aero-Engine Company of China, Harbin General Aircraft Industries, and Xian Aircraft. In Russia, United Aircraft Corporation, Sukhoi Civil Aircraft, Irkut, Kazan Helicopters, and Beriev are all on the new MEU List.
Several industry observers have indicated that the process for securing export licenses could become so onerous as to make it impractical for American companies to do business with the companies concerned. The Commerce Department has not detailed what requirements will be associated with export license applications. According to the agency, the requirements would cover items specified in the 47 Export Control Classification Numbers from the Commerce Control List including in Supplement No 2 to Part 744 of the Export Administration Regulations.
AIN approached both trade groups Aerospace Industries of America and the General Aviation Manufacturers Association to respond to the publication of the MEU List and its consequences for their member companies. Both organizations declined to issue any comments by press time.
“This action establishes a new process to designate military end-users on the MEU List to assist exporters in screening their customers for military end-users,” said Commerce Secretary Wilbur Ross. “The department recognizes the importance of leveraging its partnerships with U.S. and global companies to combat the efforts of China and Russia to divert U.S. technology for their destabilizing military programs, including by highlighting red flag indicators such as those related to Communist Chinese military companies identified by the Department of Defense.”