U.S.-UAE Cooperation Deepens, as BIS Eases Export Control Restrictions on UAE

On July 10, 2026, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) published a Final Rule significantly easing export controls for the United Arab Emirates (UAE) (the “Final Rule”). The Final Rule is effective immediately. Key changes are as follows:

• UAE is removed from Country Groups D:3 and D:4 – Access to license exceptions is expanded and certain license requirements applicable to missiles, rocket systems, and unmanned aerial vehicles (UAVs) are removed.
• UAE is added to Country Group A:5 – Eligibility for License Exception Strategic Trade Authorization (STA) is expanded to include the UAE government and approved commercial entities listed in the new Supplement No. 8 to Part 740.
• “License-free” treatment for advanced computing items (i.e., AI chips) destined to approved end users – The ability to export, re-export, or transfer (in-country) advanced computing items is expanded to UAE government entities and approved commercial entities listed in the new Supplement No. 8 to Part 740.

As a result of this development, companies should consider evaluating if their UAE partners and customers qualify for more favorable treatment under the Final Rule. Note that approval is frequently entity-specific, not country-wide, and the license exceptions require that certain conditions must be met for use.

Background

The UAE’s upgraded status comes in the context of increasing military and strategic alignment between the United States and UAE. The Final Rule specifically notes the UAE’s cooperation to “advance mutual strategic interests, in particular countering the malign activities of the Islamic Republic of Iran and its regional proxies” and Operation Epic Fury. The Final Rule follows the United States’ formal designation of the UAE as a “Major Defense Partner” in 2024 and a technology cooperation agreement reached in May 2025.

BIS also suggests that diversion concerns are mitigated by an Export Control Officer based in the UAE and BIS’s close cooperation with UAE authorities to monitor the trade of sensitive U.S. goods and technology.

UAE is removed from Country Groups D:3 and D:4

The Final Rule expands the number of license exceptions for eligible consignees in the UAE. BIS maintains groups of countries (Supplement No.1 to Part 740 of the Export Administration Regulations (EAR)), each of which is subject to different licensing and license review policies.

Prior to the Final Rule, the UAE was listed in Country Groups D:3 and D:4. Country Group D entities are generally subject to heightened restrictions. The effect of removing the UAE from these groups, is that exports, reexports, and transfers (in-country) to or within the UAE, are now eligible for the following 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)
• Additional Permissive Reexports (APR)
• Authorized Cybersecurity Exports (ACE)
• Baggage (BAG)

Beyond the above, the UAE is no longer subject to the U.S. person “support” restrictions related to missiles in 15 C.F.R. § 744.6(b)(2) or the end use restrictions related to rocket systems and UAVs in 15 C.F.R. §§ 744.3(a)(1), (3), which turned on the UAE’s inclusion in Country Group D.

UAE is added to Country Group A:5, with limitations

While the UAE’s shift into Country Group A:5 permits the use of many more license exceptions and eases U.S.-person controls, it does not change applicable licensing requirements in all circumstances, specifically for advanced computing items and the use of License Exception STA. UAE’s addition to Country Group A:5 includes a footnote clarifying that only approved entities identified in the new Supplement No. 8 to part 740 may receive advanced computing items that are “license free” and may make use of License Exception STA. Under the Final Rule, a license is no longer required for advanced computing items controlled under §§ 742.6(a)(6)(iii)(A)-(B) (Regional Stability controls), such as items classified in ECCNs 3A090.b, 4A090.b, and related “.z” paragraph items, if the ultimate consignee and all end users are listed in Supplement No. 8 to part 740. Similarly, while destinations in Country Group A:5 are typically eligible to make use of License Exception STA, under the Final Rule only those entities in the Supplement may do so.

Supplement No. 8 establishes three categories of approved entities:

• UAE Government Agencies: Government agencies of the UAE, including the Ministry of Defense and Armed Forces. Importantly, this approval does not extend to UAE state-owned corporations or to government contractors or grantees of UAE government agencies.
• UAE-Based Commercial Entities: Group 42 and its subsidiary, Core42. Notably, absent subsequent notice by BIS, the authorization provided for G42 and Core42 shall automatically expire 270 days after the effective date (April 6, 2027). In order to keep their approval, these two UAE-based AI companies must become U.S.-headquartered companies on or before that date or re-apply for authorization.
• U.S.-Headquartered AI Companies and Their Subsidiaries: BIS’ initial list added eight U.S.-headquartered AI companies, and has afforded an opportunity for other companies to seek to be added to the list through a request for an advisory opinion under Part 748.3(c).

Other Key Implications

Advanced Computing

While the Final Rule permits the export, reexport, and transfer of advanced computing items to and within the UAE for certain entities, all others will continue to require a license. Further, BIS reiterated in its recent May 31, 2026 guidance that while it is not enforcing certain provisions of the January 2025 AI Diffusion Rule, it is maintaining controls in

§ 742.6(a)(6)(iii) of the EAR that would require a license to destinations in Country Groups D:1, D:4, or D:5 (excluding destinations in Country Groups A:5 or A:6). Accordingly, the Final Rule specifies that the license requirement continues to apply to all ultimate consignees and end users in the UAE that are not listed in Supplement No. 8.

Process for Addition to Supplement No. 8 List

An entity in the UAE—including a U.S. company operating there—can request addition to the Supplement No. 8 list by submitting an advisory opinion request to BIS under 15 C.F.R. § 748.3(c). BIS has 30 days to decide whether to approve the entity and what the approval covers (e.g., advanced computing items, STA, or both). BIS will notify the entity within five days of that decision and, if approved, add it to the list. See Supplement No. 8.

UAVs, Spacecraft, and Rocket Systems

License Exception STA is now available for exports, reexports, and transfers (in-country) of UAVs and unmanned “airships” to Supplement No. 8 UAE entities where the UAV’s capabilities do not exceed delivering a payload of at least 500 kg to a range of at least 300 km. Additionally, any person may request License Exception STA eligibility for end items destined to Supplement No. 8 UAE entities and described in certain “600 series” ECCNs, including ECCN 0A606.a (military ground vehicles), ECCN 8A609.a (military vessels and watercraft), ECCN 8A620.a or .b (submersibles and related undersea equipment), “spacecraft” in ECCN 9A515.a.1, .a.2, .a.3, or .a.4, “sub-orbital craft” or items in 9A515.g (including satellites, space vehicles, and their major components), 9A610.a (military aircraft), or technology ECCN 9E515.b, .d, .e, or .f (spacecraft-related technology).

Moreover, the UAE is no longer subject to the end use restrictions set forth in 15 C.F.R. §§ 744.3(a)(1), (3) that prohibited exports to the UAE when there was knowledge those items would be used in rocket systems, missiles, and UAVs. Despite this change, item-based Commerce Control List (CCL) restrictions and other end use and end user restrictions can still apply.

Energy (Nuclear, Oil, Gas)

Access to License Exception STA may also ease compliance and licensing burdens for items related to civil nuclear power generation, oil and gas exploration, drilling and well services, offshore and subsea systems, hydrocarbon processing facilities, and related software and technology that remain subject to item-based controls under the CCL.

As mentioned above, only Supplement No. 8 entities are eligible to use License Exception STA when the UAE is the destination.

Summer associates Carlee M. Goldberg, Christina I. Hill, and Nicholas E. Kelly in the Washington, D.C. office contributed to the writing of this article.