BIS Imposes Domestic-Allocation and Export Restrictions on Battery Black Mass and Tungsten Scrap
BIS Imposes Domestic-Allocation and Export Restrictions on Battery Black Mass and Tungsten Scrap
The Bureau of Industry and Security (BIS) has issued a temporary final rule requiring U.S. persons selling covered lithium-ion battery "black mass" and tungsten waste or scrap to allocate 100% of their monthly sales to U.S. persons. Covered material must remain physically within the United States unless BIS grants an advance adjustment or exception. The operative allocation restriction is expected to run from August 27, 2026 through August 27, 2027. The rule is scheduled for publication in the Federal Register on August 6, 2026, and the published edition should be consulted before relying on calculated deadlines.
Covered Materials and Schedule B Codes
The rule covers qualifying black mass within Schedule B codes 8549.13.00.00, 8549.14.00.00, and 8549.19.00.00, and tungsten waste and scrap under 8101.97.00.00. Material falling within the battery-waste codes is covered only when it satisfies the rule's specific black-mass definition. BIS has reserved the authority to add other recoverable critical materials through subsequent Federal Register action.
Compliance Mechanics
Requests for exceptions may be filed upon publication, but filing a request does not suspend compliance obligations unless BIS specifically grants interim relief. U.S. Customs and Border Protection may detain attempted exports of covered materials. A BIS authorization under this rule does not replace any separately required Export Administration Regulations license — both requirements must be satisfied independently.
Strategic Context
The rule reflects the U.S. government's accelerating effort to secure domestic supply chains for critical materials used in electric vehicle batteries, defense systems, and advanced manufacturing. Battery black mass — the residual material recovered from spent lithium-ion batteries — contains recoverable lithium, cobalt, nickel, and manganese. Tungsten is a critical input for cutting tools, defense applications, and electronics. By requiring domestic allocation, BIS is effectively prioritizing U.S. processors and manufacturers over foreign buyers for these materials.
Practical Implications for Turkish Companies
Turkish companies involved in battery recycling, metals trading, automotive supply chains, or advanced manufacturing that source materials from or sell materials to U.S. counterparties should take immediate action. Key steps include:
Inventory review: Identify whether any current or anticipated inventory falls within the covered Schedule B codes and satisfies the black-mass definition.
Contract review: Existing export, tolling, recycling, and long-term offtake agreements should be reviewed for regulatory approval conditions, domestic-priority obligations, alternative purchaser provisions, change-in-law clauses, force majeure, storage cost allocation, and termination rights.
Revenue modeling: Cross-border transactions involving U.S. recycling facilities should now model the possibility that export-oriented revenue streams may be unavailable or require BIS authorization.
Exception applications: Companies with legitimate export needs should evaluate whether to file exception requests with BIS upon publication, understanding that filing does not suspend compliance.
The rule creates particular complexity for Turkish companies that have established offtake relationships with U.S. battery recyclers or that supply tungsten-containing materials to U.S. manufacturers. Legal counsel should be engaged immediately to assess exposure and develop a compliance strategy before the August 27 effective date.
ULF New York Consulting Inc. advises Turkish companies on U.S. export controls, trade compliance, and regulatory matters. This analysis is provided for informational purposes only and does not constitute legal advice.