Moving up the Country Ladder: Commerce Provides Enhanced Favorable Export Controls Treatment for UAE

For the past several years, the United Arab Emirates’ (UAE) export control classification sent a mixed signal: a close U.S. security partner treated, on paper, like a serious diversion risk. The U.S. Department of Commerce, Bureau of Industry and Security’s (BIS) July 10, 2026 final rule closes that gap. By pulling the UAE out of Country Groups D:3 and D:4 and placing it in the favorable A:5 group, BIS isn’t just tweaking a licensing schedule — it’s recognizing the UAE as a trusted node in the U.S. advanced technology supply chain, with real consequences for how companies structure AI and dual-use deals in the Gulf.

The final rule provides enhanced favorable treatment for the UAE under the Export Administration Regulations (EAR). By removing the UAE from Country Groups D:3 and D:4, and adding it to Country Group A:5, the rule allows the UAE government and other approved end users to utilize License Exception Strategic Trade Authorization (STA) and receive advanced computing items without a license. BIS cited the close military and commercial ties between the United States and the UAE, including the May 2025 U.S.-UAE Artificial Intelligence Cooperation framework. Companies with existing or planned UAE business may wish to review whether the rule affects the licensing treatment of their items and transactions.

What the Rule Does

Removing the UAE from Country Groups D:3 and D:4 makes additional license exceptions available for items controlled for chemical and biological (CB) or missile technology (MT) reasons, including License Exceptions Temporary Imports, Exports, Reexports, and Transfers (in-country) (TMP); Governments, International Organizations, International Inspections under the Chemical Weapons Convention, and the International Space Station (GOV); Technology and Software, Unrestricted (TSU); Aircraft, Vessels and Spacecraft (AVS); and Additional Permissive Reexports (APR), along with additional provisions of License Exceptions Authorized Cybersecurity Exports (ACE) and Baggage (BAG). The change also lifts certain missile-related restrictions on the UAE. Removing the UAE from Country Groups D:3 and D:4, however, does not eliminate any Commerce Control List-based license requirements; MT- and CB-controlled items still will require EAR authorization, though more license exceptions will be available for them.

Adding the UAE to Country Group A:5 makes License Exception STA available for the UAE. Items eligible for License Exception STA include certain military-related items under the Department of Commerce’s jurisdiction; certain commercial satellites and spacecraft items; and other dual-use items used in oil and gas production, desalination, and civil nuclear power generation. License Exception STA availability for the UAE, however, is limited to transactions in which the ultimate consignee and all end users are approved entities listed in Supplement No. 8 to Part 740 and specified as approved for License Exception STA. These consist of the UAE government agencies (though not state-owned corporations or UAE government contractors or grantees) and certain U.S.-headquartered AI companies and their subsidiaries.

At the same time, the final rule maintains the license requirement on advanced computing items destined to the UAE. That said, the rule creates an exception and provides license-free access to advanced computing items when the ultimate consignee and all end users are approved entities listed in Supplement No. 8 to Part 740 and specified as approved to receive such items without a license. These entities include UAE government agencies, two UAE-based companies, whose authorization is scheduled to expire on April 6, 2027 absent further action by BIS, and certain U.S.-headquartered AI companies and their subsidiaries.

For questions about this Blog or other export control or sanctions matters, contact the authors or any of their colleagues in Arnold & Porter’s Export Control & Sanctions or White Collar Defense & Investigations practice groups.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.