BIS Issues Final Rule with Conforming Changes to End-User/End Use Based Controls and Clarification of Terms
11/18/08 12:40 AM
On November 18, 2008, the Bureau
of Industry and Security (BIS) published a final rule in the Federal Register amending
the Export Administration Regulations (EAR) by making conforming
changes in certain end-user/end-use controls in the EAR to ensure
that the terminology used to describe each type of end-user/end-use
control is consistent, to the fullest extent possible, with the
terminology in such other controls in the EAR. In addition, the
final rule amends the EAR by revising the definition of the term
"transfer" and certain related terms, to provide greater clarity
regarding these provisions.
With regard to the end-user/end-use conforming changes, BIS states that the amendments clarify that a party cannot proceed with an export, reexport, or transfer (in-country) that is in transit at the time the party is informed by BIS that a license is required (in accordance with certain end-user/end-use controls in the EAR), unless that party first obtains a license from BIS authorizing the completion of the transaction. These changes are intended to enhance the ability of BIS to stop items subject to the EAR, including items not on the CCL, from being exported, reexported or transferred when there is an unacceptable risk that such items will be used in, or diverted to, any of the proliferation activities specified in certain sections of the EAR.
With regard to the end-user/end-use conforming changes, BIS states that the amendments clarify that a party cannot proceed with an export, reexport, or transfer (in-country) that is in transit at the time the party is informed by BIS that a license is required (in accordance with certain end-user/end-use controls in the EAR), unless that party first obtains a license from BIS authorizing the completion of the transaction. These changes are intended to enhance the ability of BIS to stop items subject to the EAR, including items not on the CCL, from being exported, reexported or transferred when there is an unacceptable risk that such items will be used in, or diverted to, any of the proliferation activities specified in certain sections of the EAR.
BIS Requests Public Comments on Removing Category 7A Products from De Minimis Eligibility
11/14/08 11:14 PM
On November 14, 2008, the Bureau
of Industry and Security (BIS) announced in the Federal Register that it is
seeking public comments on the prospect of removing from de minimis
eligibility commodities controlled for missile technology (MT)
reasons under Category 7 - Product Group A on the Commerce Control
List (CCL) except when the 7A commodities are incorporated as
standard equipment in Federal Aviation Administration (FAA) (or
national equivalent) certified civilian transport aircraft.
BIS states that it specifically is seeking public input on the impact the proposed change would have on U.S. manufacturers of Category 7A commodities, as well as the impact such a change would have on foreign manufacturers that incorporate U.S.-origin 7A commodities into their foreign-made products.
Comments must be received no later than January 20, 2009.
BIS states that it specifically is seeking public input on the impact the proposed change would have on U.S. manufacturers of Category 7A commodities, as well as the impact such a change would have on foreign manufacturers that incorporate U.S.-origin 7A commodities into their foreign-made products.
Comments must be received no later than January 20, 2009.
BIS to Hold Public Meeting on Proposed Intra-Company Transfer (ICT) Rule
10/21/08 10:01 PM
On October 27, 2008, the Commerce
Department's Bureau of Industry and Security (BIS) will hold
a public
meeting to
discuss its proposed rule on the Intra-Company Transfer (ICT)
license exception. The meeting will be held at 9:00 am in Room 4830
of the Herbert C. Hoover Building in Washington, D.C. on October
27, 2008.
BIS Implements Wassenaar Arrangement Changes to Export Administration Regulations
10/14/08 11:47 PM
On
October 14, 2008, the U.S. Department of Commerce’s Bureau of
Industry and Security (BIS) issued
a final rule in
the Federal Register revising the Export Administration Regulations
(EAR) to implement changes made to the Wassenaar Arrangement’s List
of Dual Use Goods and Technologies and Munitions (Wassenaar
List).
The Wassenaar List is maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies (Wassenaar Arrangement).
This final rule revises the EAR by amending certain entries that are controlled for national security reasons. Specifically, entries in Categories 1, 2, 3, 5 Part I (telecommunications), Category 5 Part II (information security), and Categories 6, 7, and 9 were amended, and new entries were added to the Commerce Control List (CCL).
The final rule also increases unilateral U.S. export controls on certain items to make them consistent with the amendments made to implement the Wassenaar Arrangement’s decisions.
Although this rule is effective immediately, shipments that were on dock prepared for loading or those that were en route to a port of export on October 14, 2008, may proceed to that destination under the previous license requirements as long as they are exported from the United States before December 15, 2008. Items not exported before the December 15, 2008 deadline will require a license under the new regulations.
The Wassenaar List is maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies (Wassenaar Arrangement).
This final rule revises the EAR by amending certain entries that are controlled for national security reasons. Specifically, entries in Categories 1, 2, 3, 5 Part I (telecommunications), Category 5 Part II (information security), and Categories 6, 7, and 9 were amended, and new entries were added to the Commerce Control List (CCL).
The final rule also increases unilateral U.S. export controls on certain items to make them consistent with the amendments made to implement the Wassenaar Arrangement’s decisions.
Although this rule is effective immediately, shipments that were on dock prepared for loading or those that were en route to a port of export on October 14, 2008, may proceed to that destination under the previous license requirements as long as they are exported from the United States before December 15, 2008. Items not exported before the December 15, 2008 deadline will require a license under the new regulations.
An Update from BIS Update 2008
10/02/08 10:24 PM
The Department of Commerce's
Bureau of Industry and Security (BIS) held its annual update
conference in Washington, DC from September 29 - October 1, 2008.
Global Trade Expertise were there and here is a short summary of
key highlights from the event:
- BIS videotaped all of the sessions and plans to post the videos on their website in about 4 weeks.
- BIS announced five regulatory initiatives: (1) Expanding the Entity List; (2) Comprehensive Review of the Commerce Control List; (3) Revisions to the Encryption Regulations; (4) Revised De Minimis Regulations; and (5) a proposed rule will be published next week outlining the Intra-Company Transfer License Exception (ICT), for which a 45-day comment period will follow.
- BIS has expanded the foreign availability criteria beyond national security controls.
- Based on the representations by BIS, the Intra-Company Transfer License Exception (ICT) will require prior approval, which will be similar to the license application process; periodic reporting will be required; and only certain technology for deemed exports will be covered by the ICT license exception.
BIS Announces Five Regulatory Changes
10/02/08 10:14 PM
On October 1, 2008, the Department
of Commerce's Bureau of Industry and Security (BIS) announced five
regulatory updates:
- Proposed rule to amend the Export Administration Regulations (EAR) to establish a new license exception entitled "Intra-Company Transfer (ICT)." (To be published in the Federal Register)
- Interim final rule to amend the EAR to make the treatment of encryption items more consistent with the treatment of other items subject to the EAR. (To be published in the Federal Register)
- Final rule to revise the EAR to implement changes agreed upon in the December 2007 Wassenaar Arrangement Plenary Meeting and the provisions regarding solar cells agreed upon in the December 2006 Plenary Meeting. (To be published in the Federal Register)
- Final rule to amend the EAR as a result of a systematic review of the Commerce Control List. (To be published in the Federal Register)
- Interim rule to amend the EAR to change the de minimis calculation for foreign produced hardware that is bundled with U.S.-origin software. (Published in today’s Federal Register)
BIS Publishes Update 2008 Plenary Remarks
09/30/08 08:55 PM
On September 30, 2008, the
Department of Commerce's Bureau of Industry and Security (BIS)
published the Plenary Remarks of Assistant Secretary Christopher R.
Wall at the 2008 BIS Update Conference in Washington, D.C.
here.
BIS to Post Commodity Classificaton Information Based on Exporters' Request
09/26/08 08:17 AM
On September 25, 2008,
the U.S. Department of
Commerce’s Bureau of Industry and Security (BIS)
announced that it will provide companies the
opportunity to have their Commodity Classification
information made
accessible via
the BIS website.
If a company has, or plans to have, Commodity Classification information or an export control point of contact available on their website, and would like this information to be accessible via the BIS website, they are asked to contact CommodityClassification@bis.doc.gov. In the e-mail, the company must provide the following information, which then will be posted on the BIS website:
1) Company name, 2) General description of the products/services, 3) Commodity classification information website address, and 4) Export control point of contact.
If a company has, or plans to have, Commodity Classification information or an export control point of contact available on their website, and would like this information to be accessible via the BIS website, they are asked to contact CommodityClassification@bis.doc.gov. In the e-mail, the company must provide the following information, which then will be posted on the BIS website:
1) Company name, 2) General description of the products/services, 3) Commodity classification information website address, and 4) Export control point of contact.
BIS Issues Guidance on Illicit Diversion of Goods to Iran
09/25/08 06:34 AM
Following the disbanding of an
illicit Iranian global procurement scheme, on September 24, 2008,
the U.S. Department of Commerce’s Bureau of Industry and security
(BIS) issued guidance on actions exporters can take to
prevent illegal diversion of items to support Iran’s nuclear
weapons or ballistic missile programs.
Iran is currently trying to procure items for its uranium enrichment centrifuge program. Iran has admitted to evading international sanctions to procure sensitive items that can contribute to its weapons of mass destruction (WMD) programs. Specifically, Iranian entities form front companies in other countries for the sole purpose of exporting items to Iran that can be used in the nuclear and missile programs.
BIS recommends that the U.S. exporters take the following steps to prevent illicit export to Iran (more detail on the BIS Iranian Guidance website):
All exports to Iran are subject to the Export Administration Regulations (EAR) and the Department of the Treasury’s Iranian Transaction Regulations (ITR). Exports must be authorized by the Treasury’s Office of Foreign Assets Control (OFAC) prior to exporting to Iran. If ORAC authorizes such an export or reexport, no separate authorization from BIS is necessary.
Iran is currently trying to procure items for its uranium enrichment centrifuge program. Iran has admitted to evading international sanctions to procure sensitive items that can contribute to its weapons of mass destruction (WMD) programs. Specifically, Iranian entities form front companies in other countries for the sole purpose of exporting items to Iran that can be used in the nuclear and missile programs.
BIS recommends that the U.S. exporters take the following steps to prevent illicit export to Iran (more detail on the BIS Iranian Guidance website):
- Know your consumer;
- Understand “Red Flag” indicators;
- Be cautious of customers operating in transshipment countries or free trade zones;
- Screen parties to a transaction using the U.S. Government “Lists to Check” on BIS website;
- Contact BIS if something does not seem right about the transaction or if you suspect a shipment may have been diverted to Iran;
- Subscribe to the BIS listserv and to the Department of the Treasury, Office of Foreign Assets Control’s (OFAC) service to receive notifications about changes to the Entity List and List of Specially Designation Nationals and Blocked Persons.
All exports to Iran are subject to the Export Administration Regulations (EAR) and the Department of the Treasury’s Iranian Transaction Regulations (ITR). Exports must be authorized by the Treasury’s Office of Foreign Assets Control (OFAC) prior to exporting to Iran. If ORAC authorizes such an export or reexport, no separate authorization from BIS is necessary.
BIS Announces ETRAC Members
09/24/08 09:03 PM
On September 23, 2008, the
Department of Commerce's Bureau of Industry and Security (BIS)
announced the membership of the Emerging Technology and Research
Advisory Committee (ETRAC) here.
ETRAC Members:
ETRAC Members:
| Pamela Abshire, University of
Maryland |
Maja Mataric, University of
Southern California |
| Jeffrey Ashe, General Electric
Global Research |
Richard McCullough, Carnegie
Mellon University |
| Robert Breault, Breault Research
Organization, Inc. |
Steven Patterson, Lawrence
Livermore National Lab. |
| Claude Canizares, Massachusetts
Institute of Technology |
Carl A. Picconatto, MITRE
Experimental Laboratory |
| A. Stephen Dahms, Alfred E. Mann
Foundation |
Jeffrey Puschell, Raytheon Space
& Airborne Systems |
| Charbel Farhat, Stanford
University |
Jeffrey Reed, Virginia
Tech |
| Bob Gleichauf, Cisco
Systems |
Michael Reiter, University of
North Carolina |
| Harry Kington, Honeywell
Aerospace |
Samuel Stanley, Jr, Washington
University |
| Gerald Kulcinski, University of
Wisconsin |
Marlin Thomas, Air Force Institute
of Technology |
| Brooks Keel, Louisiana State
University |
Thomas E. Tierney IV, Los Alamos
National Laboratory |
| Nikolai Leung, Qualcomm,
Inc. |
James Tour, Rice
University |
| Seth R. Marder, Georgia Institute of Technology |
| |
Iranian Ring Charged with Procuring IED Components Iranian Ring Charged with Procuring IED Components Iranian Ring Charged with Procuring IED Components Iranian Ring Charged with Procuring IED Components
09/18/08 08:23 AM
On September 17, 2008, the
Department of Justice (DOJ) announced that a federal grand jury in
Miami, Florida, has returned a Superseding
Indictment charging sixteen foreign nationals
and corporations in connection with their participation in
conspiracy to export U.S.-manufactured commodities to prohibited
entities and to Iran.
The Indictment includes charges of conspiracy, violations of the International Emergency Economic Powers Act (IEEPA) and the United States Iran Embargo, and making false statements to federal agencies in connection with the export of thousands of U.S. goods to Iran. Specifically, the Indictment alleges that the defendants purchased, and then caused the export of U.S. dual-use goods to ultimate buyers in Iran through middle countries, including the United Arab Emirates, Malaysia, England, Germany, and Singapore. Dual-use commodities are those that have commercial application, but could potentially be used to further the military or nuclear programs of other nations and thus could be detrimental to the foreign policy or national security of the United States.
The goods at issue are controlled by the Export Administration Regulations (EAR) for missile technology, national security and antiterrorism reasons as well as under the International Traffic in Arms Regulations (ITAR). In this case, the Indictment alleges that the defendants exported 120 field-programmable gate arrays, over 5,000 integrated circuits of varying types, around 345 Global Positioning Systems (GPS), 12,000 Microchip brand micro-controllers, and a Field Communication. These commodities have potential military applications, including as components in construction of improvised explosive devises (IEDs).
The charges announced are the result of a criminal investigation that was initiated in July 2006. Led by the Commerce Department, the investigation also included the efforts of the Departments of Homeland Security, Defense, State and Treasury.
As a result of investigation, the Commerce Department’s Bureau of Industry and Security (BIS) issued a Final Rule in the Federal Register announcing 75 additions to its Entity List because of their involvement in this illegal global procurement network for the benefit of the Iranian Government, and for their relationship to the Mayrow General Trading, one of the procurement front companies.
The Indictment includes charges of conspiracy, violations of the International Emergency Economic Powers Act (IEEPA) and the United States Iran Embargo, and making false statements to federal agencies in connection with the export of thousands of U.S. goods to Iran. Specifically, the Indictment alleges that the defendants purchased, and then caused the export of U.S. dual-use goods to ultimate buyers in Iran through middle countries, including the United Arab Emirates, Malaysia, England, Germany, and Singapore. Dual-use commodities are those that have commercial application, but could potentially be used to further the military or nuclear programs of other nations and thus could be detrimental to the foreign policy or national security of the United States.
The goods at issue are controlled by the Export Administration Regulations (EAR) for missile technology, national security and antiterrorism reasons as well as under the International Traffic in Arms Regulations (ITAR). In this case, the Indictment alleges that the defendants exported 120 field-programmable gate arrays, over 5,000 integrated circuits of varying types, around 345 Global Positioning Systems (GPS), 12,000 Microchip brand micro-controllers, and a Field Communication. These commodities have potential military applications, including as components in construction of improvised explosive devises (IEDs).
The charges announced are the result of a criminal investigation that was initiated in July 2006. Led by the Commerce Department, the investigation also included the efforts of the Departments of Homeland Security, Defense, State and Treasury.
As a result of investigation, the Commerce Department’s Bureau of Industry and Security (BIS) issued a Final Rule in the Federal Register announcing 75 additions to its Entity List because of their involvement in this illegal global procurement network for the benefit of the Iranian Government, and for their relationship to the Mayrow General Trading, one of the procurement front companies.
BIS Requests Comments on Foreign-Based Policy Export Controls
09/09/08 09:07 PM
On September 8, 2008, the
Department of Commerce's Bureau of Industry and Security (BIS)
published a notice in the Federal Register requesting
comments on foreign-based policy export controls. BIS is reviewing
the foreign policy-based export controls in the Export
Administration Regulations (EAR) to determine whether they should
be modified, rescinded, or extended. BIS would like to receive
comments on how existing foreign policy-based export controls have
affected exporters and the general public.
In addition, BIS is particularly interested in comments regarding the Entity List (Supplement No. 4 to Part 744 of the EAR), including comments on its usefulness and format, as well as the specific entities listed and the licensing policies and requirements for each.
Comments must be received by October 8, 2008.
In addition, BIS is particularly interested in comments regarding the Entity List (Supplement No. 4 to Part 744 of the EAR), including comments on its usefulness and format, as well as the specific entities listed and the licensing policies and requirements for each.
Comments must be received by October 8, 2008.
BIS Issues Rule for Expanding Entity List
08/23/08 12:59 PM
On August 21, 2008, Bureau of
Industry and Security (BIS) issued a final rule
that expands the
criteria for adding parties to the Entity List. The BIS Entity List
lists parties whose involvement in a transaction can require a
license under the Export Administration Regulations (EAR). The list
specifies the license requirements that apply to each listed
entity.
Effective immediately, the new rule authorizes imposition of foreign policy export and reexport license requirements, limiting the availability of license exceptions, and setting license application review policy for exports and reexports. BIS may take such actions “if there is reasonable cause to believe, based on specific and articulable facts, that the entity has been involved, is involved, or poses a significant risk of becoming involved in activities that are contrary to the national security or foreign policy interests of the United States.”
Under the rule, the activities at issue do not have to be subject to EAR in order for a party to be placed on the Entity List. BIS lists five examples of conduct that could be found detrimental to the identified U.S. interests:
Supporting persons engaged in acts of terror;
Actions that could strengthen military or terrorism capabilities of governments that have been designated by the Secretary of State as repeatedly providing support for acts of international terrorism;
Dealing or assisting dealing in conventional weapons in a way contrary to the U.S. national security or foreign policy interest;
Preventing accomplishment of an end use check conducted by BIS or the Directorate of Defense Trade Controls; and
Engaging in conduct that poses a risk of violating the EAR when such conduct raises sufficient concern that prior review of exports or reexports enhances BIS’s ability to prevent EAR violations.
The rule applies to foreign parties only, and will not be used to add U.S. persons on the Entity List. Thus, a foreign party could be added to the Entity List if specific and articulable facts provide that it has been engaged in the type of conduct identified.
The new rule also amends the EAR to include a procedure for addressing requests of a listed parties to be removed from the list or have their listing modified.
Effective immediately, the new rule authorizes imposition of foreign policy export and reexport license requirements, limiting the availability of license exceptions, and setting license application review policy for exports and reexports. BIS may take such actions “if there is reasonable cause to believe, based on specific and articulable facts, that the entity has been involved, is involved, or poses a significant risk of becoming involved in activities that are contrary to the national security or foreign policy interests of the United States.”
Under the rule, the activities at issue do not have to be subject to EAR in order for a party to be placed on the Entity List. BIS lists five examples of conduct that could be found detrimental to the identified U.S. interests:
Supporting persons engaged in acts of terror;
Actions that could strengthen military or terrorism capabilities of governments that have been designated by the Secretary of State as repeatedly providing support for acts of international terrorism;
Dealing or assisting dealing in conventional weapons in a way contrary to the U.S. national security or foreign policy interest;
Preventing accomplishment of an end use check conducted by BIS or the Directorate of Defense Trade Controls; and
Engaging in conduct that poses a risk of violating the EAR when such conduct raises sufficient concern that prior review of exports or reexports enhances BIS’s ability to prevent EAR violations.
The rule applies to foreign parties only, and will not be used to add U.S. persons on the Entity List. Thus, a foreign party could be added to the Entity List if specific and articulable facts provide that it has been engaged in the type of conduct identified.
The new rule also amends the EAR to include a procedure for addressing requests of a listed parties to be removed from the list or have their listing modified.
BIS Agenda for Next Six Months Outlined
08/07/08 10:18 PM
On July 30, 2008, Under Secretary
of Commerce Mario Mancuso delivered a keynote address to the
Washington International Trade Association entitled,
"Sprinting to the Finish - The BIS Agenda for
the Final Six Months."
Highlights of the agenda are:
Highlights of the agenda are:
- BIS will continue to focus on the areas of highest enforcement concern to the agency: nations of illicit trans-shipment concern, proliferators, and terrorists - with Iran being of particular concern. Reauthorization of the EAA is a priority for the agency.
- BIS will work to implement the dual-use directive signed by the President this past January and BIS hopes to make meaningful progress on the following regulatory issues: the intra-company transfer license exception, deemed exports, encryption, thermal imaging, foreign availability, and 17C.
- BIS will continue to support its current work and make a smooth transition to the new administration. BIS is committed to doing its best to attract the best and brightest to public service, better integrate its enforcement and policy functions, improving interagency engagement, upgrading its technology infrastructure and business processes over time, and better aligning its workforce to address BIS's highest priorities.
BIS Announces Dates for Update 2008 Conference
07/24/08 05:24 PM
On July 24, 2008, the Bureau of
Industry and Security (BIS) announced the dates for its Update 2008
conference. Update 2008 will be held from September 29, 2008 -
October 1, 2008. Further information can be found
here and the agenda can be found
here.
BIS states:
BIS had posted information on how to express your interest in attending Update 2008 and will e-mail instructions on how to register on July 25, 2008. BIS states, "Since there was more interest than space available at the conference, those whose names are not drawn will be placed on a waiting list and notified of how to register as space becomes available." For those who receive the registration email, they must register by August 18th, or their spot will be given to those on the wait list.
BIS states:
Update activities will begin on Monday, September 29 featuring mini training sessions for those new to Update as well as an Exhibit Hall with industry and government exhibitors. The main conference will begin on Tuesday, September 30 and end on Wednesday, October 1. Please see the Agenda for conference details. A Program Description will be posted in the coming weeks.
BIS had posted information on how to express your interest in attending Update 2008 and will e-mail instructions on how to register on July 25, 2008. BIS states, "Since there was more interest than space available at the conference, those whose names are not drawn will be placed on a waiting list and notified of how to register as space becomes available." For those who receive the registration email, they must register by August 18th, or their spot will be given to those on the wait list.
BIS Posts Q & As on Recent North Korea Presidential Announcement
07/09/08 02:36 PM
On July 8, 2008, the Bureau of
Industry and Security (BIS) posted questions and answers on the
recent Presidential announcement with regard to the rescission of
North Korea from the State Sponsor of Terrorism (SST) List
(here). The questions and answers
provide exporters with guidance as to what practical changes they
can expect as a result a result of the Executive Order (which can
be found here).
In essence, the Q&A states that the President's June 26, 2008 announcement triggered a 45-day congressional notification period prior to the formal rescission of the SST designation. The Administration will carry out the formal rescission only after the Six Parties (along with North Korea - China, Russia, Japan, South Korea, and the United States) reach agreement on acceptable verification and monitoring principles and protocols regarding North Korea's nuclear activities. Following such agreement, and barring further congressional action, BIS plans to publish an amendment to the Export Administration Regulations (EAR) removing North Korea from Country Group E:1 and making other conforming changes to implement the rescission. Removing North Korea from Country Group E:1 will raise the threshold value for calculating the de minimis level of foreign goods destined to North Korea to 25% controlled U.S. content. Currently, as a member of Country Group E:1, the threshold value is 10%.
However, the President's announcement does not signal a change for U.S. exporters currently. BIS states that pursuant to Section 746.4 of the EAR, it will continue to require a license for the export or reexport to North Korea of items subject to the EAR, except food and medicine classified as EAR99. BIS also stated that even after North Korea's SST designation is rescinded, certain export control requirements, in particular those related to North Korea's detonation of a nuclear device on October 9, 2006, proliferation activities, and human rights violations, will continue to apply on the basis of other laws and regulations, and in accordance with United Nations Security Council Resolution 1718.
BIS also stated that its licensing policy for North Korea has not yet changed. Once the rescission takes effect, it will review applicable licensing policy. Currently, the licensing policy for North Korea is as follows:
In essence, the Q&A states that the President's June 26, 2008 announcement triggered a 45-day congressional notification period prior to the formal rescission of the SST designation. The Administration will carry out the formal rescission only after the Six Parties (along with North Korea - China, Russia, Japan, South Korea, and the United States) reach agreement on acceptable verification and monitoring principles and protocols regarding North Korea's nuclear activities. Following such agreement, and barring further congressional action, BIS plans to publish an amendment to the Export Administration Regulations (EAR) removing North Korea from Country Group E:1 and making other conforming changes to implement the rescission. Removing North Korea from Country Group E:1 will raise the threshold value for calculating the de minimis level of foreign goods destined to North Korea to 25% controlled U.S. content. Currently, as a member of Country Group E:1, the threshold value is 10%.
However, the President's announcement does not signal a change for U.S. exporters currently. BIS states that pursuant to Section 746.4 of the EAR, it will continue to require a license for the export or reexport to North Korea of items subject to the EAR, except food and medicine classified as EAR99. BIS also stated that even after North Korea's SST designation is rescinded, certain export control requirements, in particular those related to North Korea's detonation of a nuclear device on October 9, 2006, proliferation activities, and human rights violations, will continue to apply on the basis of other laws and regulations, and in accordance with United Nations Security Council Resolution 1718.
BIS also stated that its licensing policy for North Korea has not yet changed. Once the rescission takes effect, it will review applicable licensing policy. Currently, the licensing policy for North Korea is as follows:
- The U.S. Government will generally approve applications to export or reexport: (a) Non-food, non-medical humanitarian items meeting subsistence needs and intended for the benefit of the North Korean people; and (b) Items in support of the United Nations and other humanitarian efforts.
- The U.S. Government will generally deny applications to export or reexport to North Korea: (a) Luxury goods (an illustrative list of luxury goods appears on the BIS website); (b) Arms and related materiel, and items controlled under the multilateral export control regimes; and (c) Items that could contribute to North Korea's nuclear-, ballistic missile-, or other weapons of mass destruction-related programs.
- The U.S. Government will review, on a case-by-case basis, applications to export and reexport all other items subject to the EAR, consistent with all applicable licensing policies set forth in the EAR
BIS Announces Antiboycott Online Training
06/18/08 10:07 AM
On June 17, 2008, the Bureau of
Industry and Security (BIS) announced the availability of a new training
presentation on antiboycott compliance on its BIS Online Training
Room.
BIS Forms Emerging Technology and Research Advisory Committee (ETRAC)
05/24/08 09:28 PM
On May 23, 2008, the
Bureau of Industry and Security (BIS) announced the establishment of the
Emerging Technology and Research Advisory Committee (ETRAC). The
ETRAC will assist BIS in evaluating currently controlled
technologies and emerging technologies which may have national
security significance.
BIS stated:
The ETRAC was formed in response to the dual-use export control directive issued by the President on January 22, 2008 to the Secretary of Commerce to implement programs to assess whether regulations "control the export and reexport of sensitive items while minimizing the impact on U.S. competitiveness and innovation." The ETRAC was also established in response to a recommendation of the Deemed Export Advisory Committee (DEAC).
BIS encourages qualified leaders in industry, academia, and research who have an in-depth knowledge of U.S. research and emerging technology that could affect U.S. national security to apply for ETRAC membership (information can be found in this Federal Register notice).
BIS stated:
The ETRAC will provide recommendations to BIS on how to help keep the Commerce Control List current with respect to emerging technologies and research and development activities that have dual-use applications. The committee will assess new and existing regulatory controls that are of greatest consequence to U.S. national security and study the implications of the release of dual-use technology to foreign nationals under current deemed exports licensing requirements.
The ETRAC was formed in response to the dual-use export control directive issued by the President on January 22, 2008 to the Secretary of Commerce to implement programs to assess whether regulations "control the export and reexport of sensitive items while minimizing the impact on U.S. competitiveness and innovation." The ETRAC was also established in response to a recommendation of the Deemed Export Advisory Committee (DEAC).
BIS encourages qualified leaders in industry, academia, and research who have an in-depth knowledge of U.S. research and emerging technology that could affect U.S. national security to apply for ETRAC membership (information can be found in this Federal Register notice).
BIS Seeks Comments on Deemed Export Advisory Committee Recommendations
05/20/08 10:28 PM
On May 19, 2008, the
Bureau of Industry and Security (BIS) published a notice in the Federal
Register seeking public comments on the Deemed Export Advisory
Committee (DEAC) Recommendations. Specifically, BIS is seeking
comments on whether the scope of technologies on the Commerce
Control List that are subject to deemed export licensing
requirements should be narrowed, and if so, which technologies
should be subject to deemed export licensing requirements. In
addition, BIS is seeking comments on whether a more comprehensive
set of criteria should be used to assess country affiliation for
foreign nationals with respect to deemed exports.
Comments must be received no later than August 18, 2008. The DEAC report may be accessed here.
Comments must be received no later than August 18, 2008. The DEAC report may be accessed here.
BIS Deemed Export Webinar - April 15
04/03/08 12:14 PM
BIS announced a Deemed Export
Webinar which will take place on April 15, 2008 from 1pm - 2pm
Eastern. The webinar costs $35 and one can sign up
here. BIS states that participants
will learn about the recently issued Deemed Export Advisory Committee's (DEAC)
report and
will learn about deemed exports rules and regulations. Alex Lopes,
Director of the Deemed Exports and Electronics Division of BIS,
will be the main speaker and will respond to questions. All that is
needed to participate is a telephone for the audio portion and a
computer with high speed internet access for the visual portion of
the webinar.
Highlights from BIS's 2008 Export Control Forum in Newport Beach
03/24/08 09:37 PM
The Bureau of Industry and
Security (BIS) held its 3rd Annual Export Control Forum in Newport
Beach, CA on March 17, 2008. BIS, Census and Office of Foreign
Assets Control (OFAC) provided updates to the trade. Global Trade
Expertise attended and in case you missed it, we'll recap the
highlights here.
- In a presentation by Gerry Horner, Senior Trade and Industry Analyst, Office of Technology Evaluation, Mr. Horner stated that BIS has been measuring EAR compliance by comparing data elements in AES and license approvals. For example, BIS is comparing approved licenses to licensed exports, comparing license values to licensed export values, and comparing countries on license with licensed exports. BIS is also scrutinizing license exception uses and EAR99 classifications.
- Alex Lopes, Director of BIS' Deemed Exports and Electronics Division, gave a presentation and a half-day seminar on Deemed Exports. Mr. Lopes set forth two general findings of the Deemed Export Advisory Committee (DEAC) Report as: (1) strengthening and streamlining deemed export policy and process; and (2) expanding BIS' outreach. With regard to the second recommendation, BIS will be updating its website, providing more frequent webinars, and tailoring outreach. In fact, BIS will be having a webinar on Deemed Exports on April 15, 2008.
- With regard to implementing the first recommendation: strengthening and streamlining deemed export policy and process, Mr. Lopes set fort the following steps:
- BIS announced in February the establishment of the Emerging Technologies and Research Advisory Committee (ETRAC), which will work on creating a list of technologies that should be regulated for deemed export purposes;
- BIS is creating a license exception for intra-company transfers (ICT) of both commodities and technology that is currently being reviewed by other government agencies;
- BIS is seeking to establish objective licensing criteria when reviewing dual nationals;
- BIS is in the process of redesigning its website to simply and clarify regulatory language and online guidance; and
- BIS is undertaking a comprehensive review of the CCL.
- Darryl Jackson, Assistant Secretary of Commerce for Export Enforcement, stated that the fourth export enforcement priority is now Antiboycott Compliance (after Weapons of Mass Destruction Proliferation, Terrorism and State Sponsorship of Terror, and Diversions to Unauthorized Military End-Use).
- Mr. Jackson also revealed for the first time the 9 Factors to an Effective Compliance Program that would be entitled to great weight mitigation, which will be posted on the BIS website: (1) whether a company has performed a meaningful risk analysis; (2) the existence of formal written compliance program; (3) whether appropriate senior company officials are responsible for overseeing the export compliance program; (4) whether adequate training is provided to employees; (5) whether the company adequately screens its customers and transactions; (6) whether company meets recordkeeping requirements; (7) the existence and operation of an internal system for reporting export violations; (8) the existence and results of internal or external reviews or audits (with associated updates of the EMCP); and (9) whether remedial activity has been taken in response to export violations.
- Todd Willis, Assistant Director, Office of Enforcement Analysis gave an update on BIS' end-use checks. In 2008, BIS will begin conducting end-use checks (EUC) on software and technology. Mr. Willis provided information that BIS will look for during end use checks, which elicited questions from the audience regarding how much control BIS expects exporters to exert over foreign customers and what the effects of an unfavorable EUC will have on future license applications.
BIS Establishes Online Export Control Training Room
03/19/08 10:40 PM
On March 19, 2008, the Department
of Commerce's Bureau of Industry and Security (BIS)
announced the creation of an
BIS Online Training
Room.
In its announcement, BIS stated:
The Online Training Room currently provides 3 training modules:
1. Export Control Basics
2. Classifying Your Item and Determining If You Need a License
3. General Prohibitions including Prohibited End-Users and End-Uses & Activities
Also included in the Online Training Room are BIS' previously conducted webinars:
1. Reexport Controls (March 12, 2008)
2. An Introduction to Commercial Export Licensing Requirements (Spanish) (October 18, 2007)
3. Intermediate Deemed Exports (August 29, 2007)
4. Update to China Export Control Policy (June 20, 2007)
5. An Introduct to Commercial Export Licensing Requirements (May 15, 2007)
BIS states, "We wll continue to create and update content for the online training room, and would welcome your suggestions for how to further improve our outreach efforts."
As part of its ongoing efforts to improve outreach, BIS will continue to create and supplement the materials regularly. The initial launch includes the first half of the Essentials of Export Controls seminar that BIS currently offers around the country, as well as five pre-recorded webinars covering a variety of topics. The training modules are presented in a video streaming format. The pre-recorded BIS webinars were conducted over the past year and focus on specific export control issues.
The Online Training Room currently provides 3 training modules:
1. Export Control Basics
2. Classifying Your Item and Determining If You Need a License
3. General Prohibitions including Prohibited End-Users and End-Uses & Activities
Also included in the Online Training Room are BIS' previously conducted webinars:
1. Reexport Controls (March 12, 2008)
2. An Introduction to Commercial Export Licensing Requirements (Spanish) (October 18, 2007)
3. Intermediate Deemed Exports (August 29, 2007)
4. Update to China Export Control Policy (June 20, 2007)
5. An Introduct to Commercial Export Licensing Requirements (May 15, 2007)
BIS states, "We wll continue to create and update content for the online training room, and would welcome your suggestions for how to further improve our outreach efforts."
BIS Announces Steps to Implement Deemed Export Advisory Committee Recommendations
02/07/08 02:44 PM
On February 6, 2008, the
Department of Commerce's Bureau of Industry and Security
(BIS) announced that it had completed its review
of the Deemed Export Advisory Committee's (DEAC)
report. BIS states that the Department
has begun to work with its U.S. government partners, including the
Departments of Defense, State, and Energy, to "consider the
report's analysis and recommendations as a basis for reforming
current deemed export policy."
A "deemed export" is the transfer of controlled dual-use technology to a foreign national while in the United States. BIS stated that, "Given the significant role that foreign nationals play in the U.S. research system, deemed export policy has significant implications for U.S. national security and economic competitiveness."
Mario Mancuso, Under Secretary of Commerce for Industry and Security, stated, "U.S. deemed export policy must account for the variety of risks we face. While our rules should not permit the transfer of sensitive U.S. technology to a real or potential adversary, they must ensure the United States remains the most innovative and competitive economy in the world."
While certain proposals under active consideration will require interagency support, Under Secretary Mancuso has directed BIS to immediately:
A "deemed export" is the transfer of controlled dual-use technology to a foreign national while in the United States. BIS stated that, "Given the significant role that foreign nationals play in the U.S. research system, deemed export policy has significant implications for U.S. national security and economic competitiveness."
Mario Mancuso, Under Secretary of Commerce for Industry and Security, stated, "U.S. deemed export policy must account for the variety of risks we face. While our rules should not permit the transfer of sensitive U.S. technology to a real or potential adversary, they must ensure the United States remains the most innovative and competitive economy in the world."
While certain proposals under active consideration will require interagency support, Under Secretary Mancuso has directed BIS to immediately:
- Create an Emerging Technologies Advisory Committee, composed of representatives from leading research universities, government research labs, and industry to make recommendations to BIS regarding emerging technologies on a regular basis; and
- Improve outreach and engagement efforts to the academic and technology communities about the progress and scope of the deemed export policy efforts.
BIS' SNAP-R Webinar Now Available
12/19/07 05:08 PM
BIS Expands License Exceptions TMP & BAG
12/12/07 09:53 PM
The new rule expands the availability of TMP and BAG to allow for certain temporary exports and reexports of technology by U.S persons to U.S. persons or their employees traveling or temporarily assigned abroad. However, there are several significant limitations to the license exceptions for technology:
- The license exceptions are only available to U.S. persons or non-U.S. persons otherwise authorized to receive the technology (e.g., under a license or license exception) or, alternatively do not require such authorization due to the technology's NLR status. In addition, the employer must demonstrate and document for recordkeeping purposes the reason that the technology authorized under the tools of trade provisions is needed by the non-U.S. employees.
- The technology exported under these license exceptions may not be thereafter be disclosed to anyone who is also not a U.S. person or otherwise authorized to receive the data.
- If the technology authorized under License Exception TMP is shipped or transmitted in a format that could facilitate a subsequent release of the technology must be returned to the U.S. or disposed of within 12 months from the export pursuant to the License Exception.
- The new rule also requires that the exporting or reexporting party and the recipient take adequate security protections to protect against unauthorized access to the technology while the technology is being transmitted and used overseas, such as secure connections (such as VPN) and the use of password systems and/or personal firewalls on electronic devices.
- The technology authorized under these provisions may not be used for foreign production purposes or for technical assistance unless authorized by BIS.
- Encryption technology under ECCN 5E002 is not authorized for export or reexport under the amended "tools of trade" provisions of License Exception TMP or under BAG § 740.14 to any destination listed in Country Group E:1 of Supplement No. 1 to part 740. for export or reexport of 5E002 technology by companies, their subsidiaries and employees, BIS states that License Exception Encryption Commodities and Software (ENC) in § 740.17 should be used.