On April 5, 2010, Bureau of Industry and Security (BIS) issued a final rule in Federal Register that eliminates the paper version of most of export submissions to BIS. The rule also changes certain recordkeeping requirements associated with the elimination of paper documents.
Specifically, the rule revises the EAR to state that BIS may issue export and reexport licenses either electronically or on paper and that each license will bear a license number. This language enables BIS to exercise discretion in deciding whether to issue a license electronically in SNAP-R or on paper. However, BIS expects that it will issue nearly all licenses electronically. Unless some exceptional circumstances exist, only licenses for which the applicant was authorized to file the application on paper and licenses that BIS cannot issue electronically (currently, only reopened licenses) will be issued on paper. BIS made the change to reduce the costs of generating and mailing paper copies of licenses.
Currently, BIS issues license related documents in two ways: electronically in BIS's Simplified Network Application Processing Redesign system (SNAP-R) and on paper. Most license related documents are issued in both electronic and paper form. Only a few such documents are issued only on paper.
The EAR requires that export license applications, reexport license applications, License Exception AGR notifications, encryption review requests, and classification requests be submitted to BIS electronically using SNAP-R, except in individual instances where BIS authorizes a paper submission. The license-related documents associated with a SNAP-R submissions are issued online in SNAP-R where the submitter may view, save, or print a copy. In addition, a paper version of each of those documents is mailed to the submitter.
In two situations, BIS issues only a paper version of a license-related document: when BIS authorizes a paper submission, and when BIS must reissue the license related document because it reopened a matter previously considered to be completed. BIS does not intend to stop issuing paper license-related documents in those two situations. It also does not intend to change its practices regarding issuance of Special Comprehensive Licenses or Special Iraq Reconstruction Licenses, both of which are paper-based.
BIS intends to discontinue issuing paper documents in the situations where it currently issues both paper and electronic versions of license related documents.
The final rule also made changes to recordkeeping requirements associated with the elimination of paper documents:
- The rule removes a requirement that the license holder attach a replacement license issued by BIS to the original license that it replaces. However, the rule retains the requirement that the license holder keep both the original and the replacement licenses.
- The rule exempts parties who submit documents to BIS via SNAP-R from requirements to retain copies of documents so submitted even thought those documents are "export control documents" under the EAR.
- The new rule requires that the following documents are kept: (1) notification from BIS that an application is being returned without action; (2) notification from BIS that an application is being denied; and (3) notification from BIS of the results of a commodity classification or encryption review request conducted by BIS.
The new rule also provides that parties who receive documents issued by BIS in SNAP-R may store the documents in two ways, either of which meet the requirements that original documents be retained: electronically in a format readable by software possessed by the recipient party, or storage of a complete printed paper copy of the document.
The new rule is effective May 5, 2010.