The United States has officially lifted its arms embargo, including certain highly restrictive export controls, with respect to Cambodia, reflecting a recalibration of regional policy and cooperation between the countries on defense and transnational crime. On February 3, 2026, the Department of Commerce Bureau of Industry and Security (BIS) published a rule revising the Export Administration Regulations (EAR) to reflect Cambodia’s removal from Country Group D:5. Previously, in November 2025, the Department of State had removed Cambodia as an arms embargoed destination under the International Traffic in Arms Regulations (ITAR), effectively removing it from Country Group D:5, as well.
To understand what these changes mean in terms of dealings with Cambodia, it is helpful to more broadly understand the country groupings within the EAR and ITAR and how those translate to restrictions on transactions with specific countries.
Section 126.1(d) of the ITAR provides a list of arms embargoed countries as designated by the Department of State. There is a policy of denial under the ITAR to engage in any type of defense trade with these countries. Examples of countries subject to the arms embargo include Afghanistan, China, Iraq, Nicaragua, Russia, and Venezuela.
The EAR divides countries into different country groups as outlined in Supplement No. 1 to Part 740 of the EAR. Countries in Country Group A are subject to the least stringent export controls, whereas Country Group E at the other end of the spectrum includes comprehensively embargoed countries. Country Group D consists of countries that present foreign policy concerns, and within that, sub-Group D:5 identifies countries subject to a U.S. arms embargo. In particular, the EAR notes that Country Group D:5 and the countries in § 126.1 of the ITAR shall be the same. Therefore, if the Department of State adds or removes a country from § 126.1, that change is immediately made to Country Group D:5 even before BIS formally reflects the change in its own rulemaking process.
Under the EAR, a variety of provisions specifically target Country Group D:5, most notably:
Removal from the arms embargo list can open up trade in more sensitively controlled items, either by eliminating a licensing requirement or by moving the transaction into a more favorable licensing policy.
Many heightened restrictions can still apply to a country after removal from the arms embargo list. For example, Cambodia remains subject to specific military end use/user and military-intelligence end use/user restrictions under § 744.21 and 744.22 of the EAR. BIS clarified that these country-specific restrictions apply to Cambodia even after removal from Country Group D:5.
In addition, countries removed from the arms embargo typically remain in Country Group D more broadly (for example, Cambodia remains in Group D:1, which applies national-security-based restrictions to countries of concern). Country Group D is subject to more extensive destination-based and end use-based restrictions than other country groups in the EAR. Therefore, although removal from the arms embargo list has significant impact, many transactions will continue to require an export license.
More broadly, entities in countries subject to an arms embargo face higher scrutiny from the U.S. government from a national security perspective. For example, investors from these countries will be considered with a baseline of concern from the Committee on Foreign Investment in the United States (CFIUS) in reviews of acquisitions or investments in U.S. companies, and non-notified transactions involving such investors are more prone to outreach from CFIUS. Investors in these countries also can anticipate stronger mitigation measures to address foreign ownership, control, and influence (FOCI) risks that arise when a company pursues a U.S. security clearance or bids on contracts with U.S. defense or intelligence customers. The presence of arms embargoed country ownership resulting in control, exceeding certain quantitative thresholds, or involving investor information or governance rights could potentially be disqualifying for a security clearance or government contracts.
To ensure compliance with export controls and more generally evaluate counterparty risk, companies should understand their touchpoints with arms embargoed countries. The following steps will help to mitigate risk:
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