DDTC Posts Testimony of Under Secretary Ellen Tauscher on Export Controls Reform
05/12/11 04:33 PM
On May
12, 2011, Department of State posted testimony of
Under Secretary for Arms Control and
International Security Ellen Tauscher on export
controls reform before the House Foreign Affairs
Committee.
The Under Secretary testified that the task force created to develop the new export controls regime is currently implementing Phase II. This includes working to revise the U.S. Munitions List (USML) and the Commerce Control List (CCL) so that they use common technologies and structures.
The Under Secretary said that, “State, Commerce, and Treasury are also in the process of adopting the Department of Defense’s export licensing computer system, which will be part of a unified, cross-government computer system for export control purposes. As part of this effort, exporters eventually will use a single form for applications to State, Commerce and Treasury. Exporters also will be able to submit those applications through a single electronic portal. This isn’t rocket science; we are simply adopting modern business practices.”
To address commodity jurisdiction determination issues, the State Department is working with the Departments of Defense and Commerce to create a “bright line” between munitions and dual-use items, which will finally provide clear guidance to exporters on commodity jurisdiction issues. Ellen Tauscher stated that, “this is necessary to update our system that is still designed with the assumption that technologies are developed for the military and only later find their way into the commercial sector, whereas, today, that is often the exception rather than the rule.”
As part of the USML review, agencies are developing a process for transferring items from the USML to the CCL which includes deciding on the appropriate licensing requirements on items that are moved to the CCL.
The Under Secretary also noted the Obama Administration also wants to improve the process for notifying Congress about arms sales and the transfer of items from the United USML as over the years the “process has become lengthy and unpredictable.”
The Under Secretary concluded that Phase III will complete the reform process by creating the “four singularities” – a single control list, a single information technology system, a single enforcement coordination agency, and a single licensing agency.
The Under Secretary testified that the task force created to develop the new export controls regime is currently implementing Phase II. This includes working to revise the U.S. Munitions List (USML) and the Commerce Control List (CCL) so that they use common technologies and structures.
The Under Secretary said that, “State, Commerce, and Treasury are also in the process of adopting the Department of Defense’s export licensing computer system, which will be part of a unified, cross-government computer system for export control purposes. As part of this effort, exporters eventually will use a single form for applications to State, Commerce and Treasury. Exporters also will be able to submit those applications through a single electronic portal. This isn’t rocket science; we are simply adopting modern business practices.”
To address commodity jurisdiction determination issues, the State Department is working with the Departments of Defense and Commerce to create a “bright line” between munitions and dual-use items, which will finally provide clear guidance to exporters on commodity jurisdiction issues. Ellen Tauscher stated that, “this is necessary to update our system that is still designed with the assumption that technologies are developed for the military and only later find their way into the commercial sector, whereas, today, that is often the exception rather than the rule.”
As part of the USML review, agencies are developing a process for transferring items from the USML to the CCL which includes deciding on the appropriate licensing requirements on items that are moved to the CCL.
The Under Secretary also noted the Obama Administration also wants to improve the process for notifying Congress about arms sales and the transfer of items from the United USML as over the years the “process has become lengthy and unpredictable.”
The Under Secretary concluded that Phase III will complete the reform process by creating the “four singularities” – a single control list, a single information technology system, a single enforcement coordination agency, and a single licensing agency.
BIS Publishes Testimony of Under Secretary Hirschhorn on the President's Export Control Reform Initiative
05/12/11 03:36 PM
On May
12, 2011, Under Secretary of Commerce Bureau of
Industry and Security (BIS), Eric
Hirschhorn, testified before the U.S.
House of Representatives’ Committee on Foreign
Affairs in its Hearing on “Export Controls, Arm
Sales, and Reform: Balancing U.S. Interests,
Part I.”
Hirschhorn testified regarding:
Hirschhorn testified regarding:
- The Current Export Control Role of the Department of Commerce
- Changes at the Department of Commerce
-
- List Review & Licensing Policy
-
- Outreach
-
- Compliance and Enforcement
- The Export Enforcement Coordination Center
- The Role of Congress in Export Controls
CBP Assistant Commissioner Allen Gina Testifies on AD/CV Duties
05/06/11 06:19 PM
On May
6, 2011, Customs and Border Protection (CBP) posted
the testimony of CBP
Assistant Commissioner Allen Gina, Office of
International Trade, before the Senate Finance
Committee International Trade, Customs, and
Global Competitiveness Subcommittee. Gina
discussed CBP’s role in detecting and preventing
the circumvention of antidumping and
countervailing duties (AD/CVD) on imported
goods.
Gina’s testimony highlighted CBP’s enforcement stance, provided examples of actions and initiatives performed in support of U.S. antidumping and countervailing duty laws, and presented some of the challenges CBP faces while enforcing those laws.
Gina’s testimony highlighted CBP’s enforcement stance, provided examples of actions and initiatives performed in support of U.S. antidumping and countervailing duty laws, and presented some of the challenges CBP faces while enforcing those laws.
Trade Policy Staff Committee Seeks Comments on Expansion of the Information Technology Agreement
05/06/11 03:26 PM
On May
6, 2011, the interagency Trade Policy Staff
Committee (TPSC) posted a notice in the Federal
Register seeking comments on whether the U.S.
should undertake negotiations to expand the
Information Technology Agreement (ITA) and, if
so: (1) Which additional information and
communications technology (ICT) products the
U.S. should seek to include and provide
duty-free treatment under the ITA, including
both products that existed when the ITA was
concluded in 1996 but that were not covered
under the agreement as well as products that
have been developed since then; and (2) which
U.S. trading partners that are significant
producers or consumers of ICT products that are
not currently participants in the ITA the United
States should seek to have join the ITA.
Currently, there are 73 ITA signatories, representing appx. 97 percent of world trade in ITA products. The ITA requires participants to eliminate import duties on covered products. The elimination of duties under the agreement has helped to generate substantial growth in ICT trade. Industry sources estimate that global trade in products currently covered under the ITA grew from $1.2 trillion in 1996 to $4.0 trillion in 2008.
The ITA currently covers computers and computer equipment, semiconductors and integrated circuits, computer software products, telecommunications equipment, semiconductor manufacturing equipment, and computer-based analytical instruments. The list of covered products has not been expanded since the ITA was concluded in 1996.
Currently, there are 73 ITA signatories, representing appx. 97 percent of world trade in ITA products. The ITA requires participants to eliminate import duties on covered products. The elimination of duties under the agreement has helped to generate substantial growth in ICT trade. Industry sources estimate that global trade in products currently covered under the ITA grew from $1.2 trillion in 1996 to $4.0 trillion in 2008.
The ITA currently covers computers and computer equipment, semiconductors and integrated circuits, computer software products, telecommunications equipment, semiconductor manufacturing equipment, and computer-based analytical instruments. The list of covered products has not been expanded since the ITA was concluded in 1996.
Commerce Announces Appointees to President’s Export Council Subcommittee on Export Administration
02/23/11 06:32 PM
On
February 23, 2011, Commerce Secretary Gary
Locke announced the
appointment
of
members to the President’s Export Council
Subcommittee on Export Administration (PECSEA),
which will advise the Commerce Department on the
administration’s export control reform
initiative.
“The PECSEA will provide invaluable advice as we continue to enhance our national security through the President’s reform efforts,” Locke said. “Export Control Reform requires a public-private partnership, and the business community’s insight on how that effort impacts the industrial base is vital.”
President’s Export Council (PEC) member Raul Pedraza, Founder and President of Magno International L.P., will chair the PECSEA, which has scheduled its first meeting for March 10. Marion Blakey, President and Chief Executive Officer of the Aerospace Industries Association, will serve as the Vice Chair.
Additional PECSEA Members
Gregory Bourn, Finmeccanica North America, Inc.
Leslie Bowen, Material Systems, Inc.
Darrell Coleman, DynCorp International, LLC
Curtis Dombek, Sheppard, Mullin, Richter & Hampton, LLP
Nelson Dong, Dorsey & Whitney, LLP
Jefferson Hofgard, The Boeing Company
Beth Ann Johnson, Northrop Grumman Corporation
Dean Johnson, Systron Donner Inertial
Tino Oldani, Ingersoll Machine Tools, Inc.
Kathleen Lockard Palma, General Electric Company
Roy Paulson, Paulson Manufacturing Corporation
Kimberly Pritula, Sturm, Ruger & Company, Inc.
Gregory Robbins, Veeco Instruments, Inc.
Carlos Romero, University of New Mexico
Robert Schacht, Hyrdra-Electric Company
Michelle Schulz, Braumiller Schulz, LLP
Chiradeep Sengupta, Federal Express
Michael Slonim, Honeywell International, Inc.
Osval “Chip” Storie, MAG Industrial Automation Systems
Michael Swartz, Lake Shore Cryotronics, Inc.
Chuck Tabbert, Ultra Communications, Inc.
Song Volk, Hughes Network Systems, LLC
“The PECSEA will provide invaluable advice as we continue to enhance our national security through the President’s reform efforts,” Locke said. “Export Control Reform requires a public-private partnership, and the business community’s insight on how that effort impacts the industrial base is vital.”
President’s Export Council (PEC) member Raul Pedraza, Founder and President of Magno International L.P., will chair the PECSEA, which has scheduled its first meeting for March 10. Marion Blakey, President and Chief Executive Officer of the Aerospace Industries Association, will serve as the Vice Chair.
Additional PECSEA Members
Gregory Bourn, Finmeccanica North America, Inc.
Leslie Bowen, Material Systems, Inc.
Darrell Coleman, DynCorp International, LLC
Curtis Dombek, Sheppard, Mullin, Richter & Hampton, LLP
Nelson Dong, Dorsey & Whitney, LLP
Jefferson Hofgard, The Boeing Company
Beth Ann Johnson, Northrop Grumman Corporation
Dean Johnson, Systron Donner Inertial
Tino Oldani, Ingersoll Machine Tools, Inc.
Kathleen Lockard Palma, General Electric Company
Roy Paulson, Paulson Manufacturing Corporation
Kimberly Pritula, Sturm, Ruger & Company, Inc.
Gregory Robbins, Veeco Instruments, Inc.
Carlos Romero, University of New Mexico
Robert Schacht, Hyrdra-Electric Company
Michelle Schulz, Braumiller Schulz, LLP
Chiradeep Sengupta, Federal Express
Michael Slonim, Honeywell International, Inc.
Osval “Chip” Storie, MAG Industrial Automation Systems
Michael Swartz, Lake Shore Cryotronics, Inc.
Chuck Tabbert, Ultra Communications, Inc.
Song Volk, Hughes Network Systems, LLC
BIS Announces Weekly Wednesday Teleconferences to Discuss Export Control Reform Efforts
12/20/10 05:26 PM
On
December 20, 2010, the U.S. Commerce Department's
Bureau of Industry and Security (BIS)
announced the
availability of Kevin Wolf, Assistant Secretary
for Export Administration, via a weekly
Wednesday teleconference from 2pm - 4pm EST to
answer the public's questions related to Export
Control reform, particularly the two Commerce
notices published on December 9th (see news
articles below).
Questions to be discussed in the conference call must be submitted in advance to oesdseminar@bis.doc.gov with the subject line "Teleconference Questions".
To participate in the free conference calls, which are limited to the first 100 people per session, you may dial in at 866-917-2731, participant code 4136642. Callers should dial in 10 minutes early. No reservations are required.
Questions to be discussed in the conference call must be submitted in advance to oesdseminar@bis.doc.gov with the subject line "Teleconference Questions".
To participate in the free conference calls, which are limited to the first 100 people per session, you may dial in at 866-917-2731, participant code 4136642. Callers should dial in 10 minutes early. No reservations are required.
President Reports on Progress of the New U.S. Export Control System Implementation
12/09/10 01:29 PM
On
December 9, 2010, President’s Export Council held a
meeting at the White House where President Obama
discussed progress made on the goal to double
exports over the next five years.
The President announced at the meeting that the Administration released a series of regulations and requests for comment as part of the implementation of the new U.S. export system. The Administration also deployed its Export Control Reform Initiative webpage at www.export.gov, which includes a new tool to facilitate compliance with U.S. export control requirements by bringing together, for the first time, the various screening lists maintained by multiple Departments.
The announcement included introducing new proposed regulations published by the Department of State and by the Department of Commerce, both of which request public comments within 60 days:
“First, the Department of State published a proposed regulation to rewrite Category VII (Tanks and Military Vehicles) of the U.S. Munitions List (USML). The proposed Category is a “positive list” of those defense articles that an interagency technical working group has determined provide at least a significant military or intelligence advantage to the United States. The Department of State is soliciting public comment to ensure that the new Category clearly and concisely identifies the items that are controlled in this Category.
Second, the Department of State published a companion notice that provides details on the U.S. Government’s methodology for generating the revised, positive Category VII as a model for other categories. The notice also solicits public input for virtually all the remaining categories on the USML (excluding the categories for classified defense articles and for miscellaneous articles), requesting input on:
1. Describing currently controlled defense articles in a “positive manner;” 2. Recommending each defense article’s proposed tier of control; and 3. Identifying any current defense article that does not meet any of the tiered control criteria, with an explanation of the analysis that resulted in that conclusion.
These inputs will be reviewed by the interagency technical working groups as the U.S. Government continues its work in revising the control lists. The Administration has an aggressive schedule to complete its rewrite of the entire USML in 2011.
Third, the Department of Commerce published a similar notice requesting public input on entries on the Commerce Control List as well as requesting foreign availability information on a wide range of controlled items outside a proposed set of countries who are allies and multilateral regime partners.
Fourth, the Department of Commerce published a proposed regulation that offers an initial set of new licensing policies. The proposed regulation would create a new license exception that would allow exports of controlled items (consistent with statutory and treaty requirements) to countries that are members of all four multilateral export control regimes or other regime members that also are members of NATO. It would also allow exports of items controlled on the Wassenaar Arrangement’s Basic List to countries that are members of or adherents to all four multilateral export control regimes, members of NATO, or for civil end-uses in destinations that have not historically represented a significant diversion or proliferation risk for U.S.-origin items. The proposed exception would impose new requirements to provide safeguards against possible unauthorized re-exports, including notification, destination control statement and consignee statement requirements.”
The President announced at the meeting that the Administration released a series of regulations and requests for comment as part of the implementation of the new U.S. export system. The Administration also deployed its Export Control Reform Initiative webpage at www.export.gov, which includes a new tool to facilitate compliance with U.S. export control requirements by bringing together, for the first time, the various screening lists maintained by multiple Departments.
The announcement included introducing new proposed regulations published by the Department of State and by the Department of Commerce, both of which request public comments within 60 days:
“First, the Department of State published a proposed regulation to rewrite Category VII (Tanks and Military Vehicles) of the U.S. Munitions List (USML). The proposed Category is a “positive list” of those defense articles that an interagency technical working group has determined provide at least a significant military or intelligence advantage to the United States. The Department of State is soliciting public comment to ensure that the new Category clearly and concisely identifies the items that are controlled in this Category.
Second, the Department of State published a companion notice that provides details on the U.S. Government’s methodology for generating the revised, positive Category VII as a model for other categories. The notice also solicits public input for virtually all the remaining categories on the USML (excluding the categories for classified defense articles and for miscellaneous articles), requesting input on:
1. Describing currently controlled defense articles in a “positive manner;” 2. Recommending each defense article’s proposed tier of control; and 3. Identifying any current defense article that does not meet any of the tiered control criteria, with an explanation of the analysis that resulted in that conclusion.
These inputs will be reviewed by the interagency technical working groups as the U.S. Government continues its work in revising the control lists. The Administration has an aggressive schedule to complete its rewrite of the entire USML in 2011.
Third, the Department of Commerce published a similar notice requesting public input on entries on the Commerce Control List as well as requesting foreign availability information on a wide range of controlled items outside a proposed set of countries who are allies and multilateral regime partners.
Fourth, the Department of Commerce published a proposed regulation that offers an initial set of new licensing policies. The proposed regulation would create a new license exception that would allow exports of controlled items (consistent with statutory and treaty requirements) to countries that are members of all four multilateral export control regimes or other regime members that also are members of NATO. It would also allow exports of items controlled on the Wassenaar Arrangement’s Basic List to countries that are members of or adherents to all four multilateral export control regimes, members of NATO, or for civil end-uses in destinations that have not historically represented a significant diversion or proliferation risk for U.S.-origin items. The proposed exception would impose new requirements to provide safeguards against possible unauthorized re-exports, including notification, destination control statement and consignee statement requirements.”
White House Releases Report on the National Export Initiative
09/16/10 04:21 PM
On
September 16, 2010, the White House released a
report to the President on the National Export
Initiative (NEI). The report, developed by the
Export Promotion Cabinet which includes the
Secretaries of Commerce, State, Treasury,
Agriculture and Labor and the heads of all
trade-related government agencies, details the
progress of NEI, presents a plan for achieving
President’s goals to double U.S. exports in five
years, and provides recommendations addressing the
priorities established in the NEI Executive Order.
“As American consumers spend a little less and save a little more, it has never been more important to connect U.S. businesses to the 95 percent of the world's consumers who live outside our borders,” U.S. Commerce Secretary Gary Locke said. “Helping American companies sell more abroad will create jobs and boost our economy. This report is a blueprint for doing just that.”
The administration’s efforts, through the NEI, are focused on five areas that include access to credit, especially for small and midsize firms; increased trade advocacy and export promotion efforts; removal of barriers to the sale of U.S. goods and services abroad; enforcement of trade rules; and pursuing policies that will increase global economic growth so that there’s a strong worldwide market for U.S. goods and services.
The report outlines ways the U.S. government can expand efforts to help U.S. businesses win more foreign government contracts, find buyers worldwide, participate in more trade missions and trade shows, receive more export financing, and learn new ways to sell products and services overseas. A central focus of the plan is providing additional assistance to small and medium-sized businesses, which are major drivers of new job creation.
According to the report, nine months into a five-year plan, progress is already evident: “Exports in the first six months of this year were 18 percent higher than exports in the first six months of 2009. Furthermore, exports have contributed more than one percentage point to GDP growth (at an annual rate) in each of the four quarters of recovery and have contributed over 1.5 percentage points to growth in the last year. This was a larger contribution than either consumption or fixed investment.”
In the report, the Export Promotion Cabinet provides recommendations to help achieve the priorities established in the NEI Executive Order:
Small and Medium-Sized Enterprises (SMEs): a National Outreach Campaign to raise awareness of export opportunities and government export assistance for U.S. small and midsize companies; a re-launch of export.gov, the Government’s export internet portal, with new export training opportunities to educate companies on how they can begin selling their products overseas or break into new markets if they are already exporting.
Federal Export Assistance: bring more international buyers to U.S. trade shows and encourage more U.S. companies to participate in major international trade shows. In addition, implement a government-wide export promotion strategy for six newly designated “next tier” markets (Colombia, Indonesia, Saudi Arabia, South Africa, Turkey and Vietnam).
Trade Missions: substantially increase the number of trade missions abroad, particularly those led by senior U.S. Government officials, and foreign buyer trade missions to the United States.
Commercial Advocacy: level the playing field for companies bidding on projects abroad through improved coordination among government export promotion programs; formalize a path to escalate, for the first time ever, critical advocacy projects for direct White House and National Economic Council involvement where necessary.
Increasing Export Credit: extend more export credit through existing trade finance agencies, increase awareness of credit products, focus on SMEs and companies from underserved sectors of the U.S. economy, expand the eligibility criteria for SME export finance lending, and streamline the application and review process for SME exporters.
The NEI provides more funding, more focus and more cabinet-level coordination to grow U.S. exports. According to the report, since the President announced the NEI, the Department of Commerce’s Advocacy Center has assisted American companies competing for export opportunities, supporting $11.8 billion in U.S. exports and an estimated 70,000 jobs.
The NEI Report will be followed by the National Export Strategy, prepared by the Trade Promotion Coordinating Committee (TPCC) and delivered to Congress annually, which will detail the implementation of these recommendations and measure progress.
Full NEI report can be accessed here and the executive summary of the report is attached here.
“As American consumers spend a little less and save a little more, it has never been more important to connect U.S. businesses to the 95 percent of the world's consumers who live outside our borders,” U.S. Commerce Secretary Gary Locke said. “Helping American companies sell more abroad will create jobs and boost our economy. This report is a blueprint for doing just that.”
The administration’s efforts, through the NEI, are focused on five areas that include access to credit, especially for small and midsize firms; increased trade advocacy and export promotion efforts; removal of barriers to the sale of U.S. goods and services abroad; enforcement of trade rules; and pursuing policies that will increase global economic growth so that there’s a strong worldwide market for U.S. goods and services.
The report outlines ways the U.S. government can expand efforts to help U.S. businesses win more foreign government contracts, find buyers worldwide, participate in more trade missions and trade shows, receive more export financing, and learn new ways to sell products and services overseas. A central focus of the plan is providing additional assistance to small and medium-sized businesses, which are major drivers of new job creation.
According to the report, nine months into a five-year plan, progress is already evident: “Exports in the first six months of this year were 18 percent higher than exports in the first six months of 2009. Furthermore, exports have contributed more than one percentage point to GDP growth (at an annual rate) in each of the four quarters of recovery and have contributed over 1.5 percentage points to growth in the last year. This was a larger contribution than either consumption or fixed investment.”
In the report, the Export Promotion Cabinet provides recommendations to help achieve the priorities established in the NEI Executive Order:
Small and Medium-Sized Enterprises (SMEs): a National Outreach Campaign to raise awareness of export opportunities and government export assistance for U.S. small and midsize companies; a re-launch of export.gov, the Government’s export internet portal, with new export training opportunities to educate companies on how they can begin selling their products overseas or break into new markets if they are already exporting.
Federal Export Assistance: bring more international buyers to U.S. trade shows and encourage more U.S. companies to participate in major international trade shows. In addition, implement a government-wide export promotion strategy for six newly designated “next tier” markets (Colombia, Indonesia, Saudi Arabia, South Africa, Turkey and Vietnam).
Trade Missions: substantially increase the number of trade missions abroad, particularly those led by senior U.S. Government officials, and foreign buyer trade missions to the United States.
Commercial Advocacy: level the playing field for companies bidding on projects abroad through improved coordination among government export promotion programs; formalize a path to escalate, for the first time ever, critical advocacy projects for direct White House and National Economic Council involvement where necessary.
Increasing Export Credit: extend more export credit through existing trade finance agencies, increase awareness of credit products, focus on SMEs and companies from underserved sectors of the U.S. economy, expand the eligibility criteria for SME export finance lending, and streamline the application and review process for SME exporters.
The NEI provides more funding, more focus and more cabinet-level coordination to grow U.S. exports. According to the report, since the President announced the NEI, the Department of Commerce’s Advocacy Center has assisted American companies competing for export opportunities, supporting $11.8 billion in U.S. exports and an estimated 70,000 jobs.
The NEI Report will be followed by the National Export Strategy, prepared by the Trade Promotion Coordinating Committee (TPCC) and delivered to Congress annually, which will detail the implementation of these recommendations and measure progress.
Full NEI report can be accessed here and the executive summary of the report is attached here.
BIS RPTAC Meeting Minutes Published
09/15/10 04:10 PM
The
Bureau of Industry and Security (BIS)
published the Regulations
and Procedures Technical Advisory Committee
(RPTAC) September 14, 2010 meeting minutes.
John Sonderman of the BIS Office of Enforcement summarized the voluntary self-disclosure (VSD) enforcement program:
As for recent and upcoming BIS regulations, Hilary Hess of BIS Regulatory Policy Division stated that:
Finally, Dale Kelly of Foreign Trade Division Bureau of the Census (Census) stated that the Foreign Trade Division (FTD) continues to work on revising the Automated Export System (AES) regulations and is waiting on concurrence from Department of Homeland Security (DHS) and Customs Border Protection (CBP). There is no indication as to when this may occur.
John Sonderman of the BIS Office of Enforcement summarized the voluntary self-disclosure (VSD) enforcement program:
- In Fiscal Year
(FY) 2009, BIS closed 109 cases with an average
processing time of 17 months;
• In FY2010, the processing time decreased to 16 months;
• In 2010, 21 cases have been closed as of May 2010 with an average 6 week processing time. A notable change for this time period is that BIS officers located at headquarters replaced field officers as point of contact;
• In FY 2009 - 163 cases or 71% of VSDs resulted in a warning letter; 9 cases resulted in sanctions;
• In FY2009, 67% of VSDs resulted in a warning letter; 13 cases resulted in sanctions.
As for recent and upcoming BIS regulations, Hilary Hess of BIS Regulatory Policy Division stated that:
- On September 7,
2010, BIS published new rules regarding the
revised Wassenaar Arrangement’s list that affects
most CCL categories except for Category 3. The
new rules do not include some items on Category 6
as they are covered under the Directorate of
Defense Trade Controls (DDTC) jurisdiction.
Category 5, Part 2 will be covered separately as
part of an encryption rule;
• BIS recently updated its statement of legal authority outlined under the International Emergency Economic Powers Act (IEEPA);
• BIS amended the licensing process for commodities: the new process does not require determination of commodity jurisdiction;
• BIS amended its Foreign Product Rule to require a license on all foreign products using U.S. components destined for D1 list and Terrorist Supporting countries beyond Cuba;
• BIS revised CCL to cover crime control items potentially used for human rights violations. Items covered by the revision will generally be denied; infrasound sensors will be moved from the munitions list to the CCL; and
• BIS issued a Notice of Proposed Rule Making that concerns transshipment guidelines (not a rule).
Finally, Dale Kelly of Foreign Trade Division Bureau of the Census (Census) stated that the Foreign Trade Division (FTD) continues to work on revising the Automated Export System (AES) regulations and is waiting on concurrence from Department of Homeland Security (DHS) and Customs Border Protection (CBP). There is no indication as to when this may occur.
BIS Recruiting Private-Sector Members for PECSEA
09/09/10 03:06 PM
On
September 9, 2010, the Bureau of Industry and
Security posted a notice in the
Federal
Register announcing the
recruitment of private-sector members to the
President’s Export Council Subcommittee on
Export Administration (PECSEA). The PECSEA
advises the U.S. Government on matters and
issues pertinent to implementation of the
provisions of the Export Administration Act and
the Export Administration Regulations (EAR).
BIS states that, “The PECSEA draws on the expertise of its members to provide advice and make recommendations on ways to minimize the possible adverse impact export controls may have on U.S. industry. The PECSEA provides the Government with direct input from representatives of the broad range of industries that are directly affected by export controls.”
“PECSEA members are appointed by the Secretary of Commerce and serve at the Secretary's discretion. The membership reflects the Department's commitment to attaining balance and diversity. PECSEA members must obtain secret-level clearances prior to appointment. . . The PECSEA meets 4 to 6 times per year. Members of the Subcommittee will not be compensated for their services.”
“The PECSEA is seeking private-sector members with senior export control expertise and direct experience in one or more of the following industrics: Machine tools, semiconductors, commercial communication satcllitcs, high performance computers, telecommunications, aircraft, pharmaceuticals, and chemicals.”
BIS states that, “The PECSEA draws on the expertise of its members to provide advice and make recommendations on ways to minimize the possible adverse impact export controls may have on U.S. industry. The PECSEA provides the Government with direct input from representatives of the broad range of industries that are directly affected by export controls.”
“PECSEA members are appointed by the Secretary of Commerce and serve at the Secretary's discretion. The membership reflects the Department's commitment to attaining balance and diversity. PECSEA members must obtain secret-level clearances prior to appointment. . . The PECSEA meets 4 to 6 times per year. Members of the Subcommittee will not be compensated for their services.”
“The PECSEA is seeking private-sector members with senior export control expertise and direct experience in one or more of the following industrics: Machine tools, semiconductors, commercial communication satcllitcs, high performance computers, telecommunications, aircraft, pharmaceuticals, and chemicals.”
BIS Publishes Comments of Export Enforcement Assistant Secretary
09/01/10 05:00 PM
On
September 1, 2010, the Bureau of Industry and
Security (BIS) published the remarks of
David Mills, Assistant Secretary for Export
Enforcement made at BIS’ Annual Update
Conference.
Assistant Secretary Mills summarized BIS’ export enforcement activities over the past year. Specifically, he stated that:
Assistant Secretary Mills summarized BIS’ export enforcement activities over the past year. Specifically, he stated that:
- BIS has agents based around the United States as well as in critical hubs such as Hong Kong, Singapore, and the United Arab Emirates.
- The Office of Enforcement Analysis (OEA) evaluates export transactions, visas, press reporting, and intelligence information to help Special Agents identify and investigate bad actors. The OEA also conducts end use checks abroad.
- The Office of Antiboycott Compliance (OAC) negotiated settlements in 11 cases last year, resulting in fines of more than $350,000.
- The U.S. Government’s change in focus on export licensing will necessitate BIS’ export enforcement efforts as well. While BIS will continue to encourage Voluntary Self-Disclosures and provide mitigation of possible penalties for companies that had good internal compliance programs prior to a violation. But, BIS will be taking a harder line in other circumstances involving willful misconduct. Mills stated that although BIS typically sought penalties more against companies than individuals, BIS will now consider seeking penalties against an individual when a violation is a deliberate action of an individual, including seeking the denial of export privileges, fines, and imprisonment. This will also hold true for a supervisor who is complicit in these deliberate violations by a subordinate.
- BIS will focus on disrupting major illicit procurement networks as in the past decade, countries like Iran and North Korea have turned to foreign middlemen and front companies to acquire U.S.-origin goods. During the last two years, BIS has added 185 foreign entities to the Entity List.
- In February 2010, Balli Aviation agreed to pay $15 million, the largest civil penalty in the history of BIS. In addition, a federal judge imposed a $2 million criminal fine and a five year probation against a Balli subsidiary.
White House Issues Fact Sheet on the Export Control Reform Initiative
04/20/10 11:32 PM
On
April 20, 2010, the White House issued a fact sheet
on President Obama’s Export Control Reform
initiative. The initiative started in August 2009
with a comprehensive assessment of the U.S. export
control system to identify possible reforms.
The assessment, created at the direction of the President, was conducted by an interagency task force that included all departments and agencies with roles in export controls. The assessment found that the current U.S. export control system does not sufficiently reduce national security risk based on the fact that its structure is “overly complicated, contains too many redundancies, and tries to protect too much.”
Based on the review, the Administration has determined that fundamental reform of the U.S. export control system is needed in each of its four component areas, with transformation to a:
For the implementation of the proposed reforms, the Administration has prepared a comprehensive, three-phase approach and is currently moving forward to make specific reforms which can be initiated immediately and implemented without legislation:
Phase I makes significant and immediate improvements to the existing system and establishes the framework necessary to create the new system, including making preparations for any legislative proposals. This phase includes implementing specific reform actions already in process and initiating review of new ones.
Phase II results in a fundamentally new U.S. export control system based on the current structure later this year. This phase completes deployment of specific Phase I reforms and initiates new actions contingent upon completion of Phase I items. Congressional notification will be required to remove munitions list controls or transfer items from the munitions list to the dual-use list, and additional funding will be required both for enhanced enforcement and the IT infrastructure.
Phase III completes the transition to the new U.S. export control system. Legislation would be required for this phase:
The assessment, created at the direction of the President, was conducted by an interagency task force that included all departments and agencies with roles in export controls. The assessment found that the current U.S. export control system does not sufficiently reduce national security risk based on the fact that its structure is “overly complicated, contains too many redundancies, and tries to protect too much.”
Based on the review, the Administration has determined that fundamental reform of the U.S. export control system is needed in each of its four component areas, with transformation to a:
- Single Control
List,
• Single Primary Enforcement Coordination Agency,
• Single IT System, and
• Single Licensing Agency.
For the implementation of the proposed reforms, the Administration has prepared a comprehensive, three-phase approach and is currently moving forward to make specific reforms which can be initiated immediately and implemented without legislation:
Phase I makes significant and immediate improvements to the existing system and establishes the framework necessary to create the new system, including making preparations for any legislative proposals. This phase includes implementing specific reform actions already in process and initiating review of new ones.
-
Control List – refine,
understand, and harmonize definitions to end
jurisdiction confusion between the two lists;
establish new independent control criteria to be
used to screen items for control into new tiered
control list structure.
• Licensing – implement regulatory-based improvements to streamline licensing processes and standardize policy and processes to increase efficiencies.
• Enforcement – synchronize and de-conflict enforcement by creation of an Enforcement Fusion Center.
• IT – determine enterprise-wide needs and begin the process to reduce confusion by creating a single U.S. Government (USG) point of entry for exporters.
Phase II results in a fundamentally new U.S. export control system based on the current structure later this year. This phase completes deployment of specific Phase I reforms and initiates new actions contingent upon completion of Phase I items. Congressional notification will be required to remove munitions list controls or transfer items from the munitions list to the dual-use list, and additional funding will be required both for enhanced enforcement and the IT infrastructure.
-
Control List – restructure
the two lists into identical tiered structures,
apply criteria, remove unilateral controls as
appropriate, and submit proposals multilaterally
to add or remove controls.
• Licensing – complete transition to mirrored control list system and fully implement licensing harmonization to allow export authorizations within each control tier to achieve a significant license requirement reduction which is compatible with national security equities.
• Enforcement – expand outreach and compliance.
• IT – transition toward a single electronic licensing system.
Phase III completes the transition to the new U.S. export control system. Legislation would be required for this phase:
-
Control List – merge the two
lists into a single list, and implement
systematic process to keep current.
• Licensing – implement single licensing agency.
• Enforcement – consolidate certain enforcement activities into a Primary Enforcement Coordination Agency.
• IT – implement a single, enterprise-wide IT system (both licensing and enforcement).
Secretary of Defense Discusses Reform of the U.S. Export Controls
04/19/10 11:10 PM
On
April 19, 2010, the U.S. Secretary of Defense
Robert Gates discussed the
administration’s interagency review of the U.S.
export control system. Gates stated that the
consensus among the Secretaries of State,
Commerce, Defense, Energy, and Homeland Security
is that the current export control system poses
a potential threat to national security. Gates
identified as part of the problem export control
processes that were designed 50 years ago that
he claims are unfit for solving modern issues.
The fundamental reform of the export control system, according to Gates, needs to take place in four dimensions, also referred as the “four singles”:
Gates also mentioned that among the changes to the export controls system are treaties between the U.S. and each of the key allies that contain special arrangements under which an export license would not be required for export of goods that are not on a list of very sensitive items, to pre-determined communities of companies that have been vetted by the foreign government. This legislation is currently pending ratification in the Senate.
The fundamental reform of the export control system, according to Gates, needs to take place in four dimensions, also referred as the “four singles”:
- A single export
control list. The United States Munitions List
(USML) and Commerce Control List (CCL) would be
replaced by a single list, which would prevent
forum shopping where exporters may try
classification under one list versus another,
duplication, where an item is covered by both
USML and CCL, and also aid companies in
understanding applicable restrictions.
2 A single licensing agency. Currently, two different authorities – the State Department’s Director of Defense Trade Controls (DDTC) and the Commerce Department’s Bureau of Industry and Security (BIS) – often make independent, unilateral decisions, which sometimes cause for confusion and delay in decision making.
3 A single agency to coordinate enforcement, which would strengthen the ability to identify, investigate and prosecute violations. Currently, multiple enforcement agencies exist, including Immigration and Customs Enforcement (ICE), State enforcement, Commerce Export Enforcement Office, FBI, and many others. It is expected that in the future there will still be multiple enforcement institutions, but their efforts will be coordinated to avoid overlapping jurisdiction and, in some cases, confused authorities.
4 A single unified IT system. Gates stressed that a single IT system instead of the current three would review license application process across the U.S. government and also make this process more efficient.
Gates also mentioned that among the changes to the export controls system are treaties between the U.S. and each of the key allies that contain special arrangements under which an export license would not be required for export of goods that are not on a list of very sensitive items, to pre-determined communities of companies that have been vetted by the foreign government. This legislation is currently pending ratification in the Senate.
CBP Announces International Registered Traveler (IRT) Pilot Program
04/12/08 01:51 PM
On
April 11, 2008, Customs and Border Protection
(CBP) announced
in
the Federal Register a pilot International
Registered Traveler (IRT) program and requested
comments. The IRT program will allow for
expedited clearance of pre-approved low-risk air
travelers into the United States. The pilot
program will initially be conducted at three
airports: John F. Kennedy International Airport
in New York (JFK), the George Bush
Intercontinental Airport in Houston (IAH), and
Washington Dulles International Airport (IAD).
The program may be expanded to other locations
as announced.
Applications to be an initial participant in the pilot program should be submitted by May 12, 2008 and the pilot program will commence on June 10, 2008. Applications to participate will be accepted throughout the duration of the pilot and are available through the Global On-Line Enrollment System (GOES) at www.cbp.gov. At this point, applicants must be either a U.S. citizen, national, or lawful permanent resident (LPR).
Expedited clearance will be effected using automated kiosks located in the Federal Inspection Services (FIS) area of each participating airport. IRT uses fingerprint biometrics technology to verify a participant's identity and confirm his or her status as a IRT participant. After arriving at the FIS area, the participant will proceed directly to the IRT kiosk. A sticker affixed to the participant's passport at the time of acceptance into the IRT program will provide visual identification that the individual can be referred tot he IRT kiosk. IRT participants need not wait in the regular passport control primary inspection lines.
In the Federal Register notice, CBP invites public comments concerning any aspect of the pilot program, provides eligibility requirements for voluntary participation in the pilot program, describes the basis on which CBP will select participants, and describes how the IRT program will operate.
Applications to be an initial participant in the pilot program should be submitted by May 12, 2008 and the pilot program will commence on June 10, 2008. Applications to participate will be accepted throughout the duration of the pilot and are available through the Global On-Line Enrollment System (GOES) at www.cbp.gov. At this point, applicants must be either a U.S. citizen, national, or lawful permanent resident (LPR).
Expedited clearance will be effected using automated kiosks located in the Federal Inspection Services (FIS) area of each participating airport. IRT uses fingerprint biometrics technology to verify a participant's identity and confirm his or her status as a IRT participant. After arriving at the FIS area, the participant will proceed directly to the IRT kiosk. A sticker affixed to the participant's passport at the time of acceptance into the IRT program will provide visual identification that the individual can be referred tot he IRT kiosk. IRT participants need not wait in the regular passport control primary inspection lines.
In the Federal Register notice, CBP invites public comments concerning any aspect of the pilot program, provides eligibility requirements for voluntary participation in the pilot program, describes the basis on which CBP will select participants, and describes how the IRT program will operate.
National Retail Federation Advocates for Improvements in WTO Rules
12/04/07 01:21 PM
On
December 4, 2007, the U.S. Customs
House Guide reported
that
the National Retail Federation (NRF) stated that
it will review a draft text of proposed new
trade remedy rules released by the World Trade
Organization (WTO) on November 30, 2007 and will
focus on whether the draft will result in
reforms to end what the increasing abuse of
anti-dumping and countervailing duties
mechanisms.
“One of
the key objectives of American retailers in the
Doha round is to obtain improvements and
clarifications in the rules governing the use of
anti-dumping and countervailing duty actions
against imported products that will prevent abusive
and unfair use of these measures and ensure that
they do not undermine the competitiveness of U.S.
retailers, manufacturers, and farmers,” NRF Vice
President and International Trade Counsel Erik
Autor said. “We will carefully review the text
released today to ascertain whether it can serve as
a basis for achieving the retail industry’s goals
in these negotiations.”
China Agrees to End Subsidies Challenged by the U.S. in the WTO
11/29/07 02:47 PM
China agreed to sign a Memorandum of Understanding (MOU) that is designed to settle a WTO case that the United States and Mexico initiated in February 2007. In the WTO case, the U.S. had alleged that China was maintaining several subsidy programs that are prohibited under WTO rules. The USTR states that most of the challenged subsidies were tied to exports, giving an unfair advantage to Chinese products and denying U.S. manufacturers the chance to compete fairly with them in the U.S. and in third countries.
Under the MOU, China has committed to complete a series of steps by January 1, 2008 to ensure that the WTO-prohibited subsidies cited in the U.S. complaint have been permanently eliminated, and that they will not be re-introduced in the future.
The agreement was made only two weeks before the USTR is to join Treasury Secretary Henry M. Paulson Jr. and other Cabinet members for a high-level meeting of the "strategic economic dialogue" with China that Paulson launched last year to reduce tensions with China.
The USTR's remarks on this issue can be found here.
President Bush Addresses the White House Forum on International Trade and Investment
11/06/07 01:06 PM
Today, President Bush addressed the White House
Forum on International Trade and Investment. His
speech can be found
here.
In his remarks, he urged Congress to pass the Free
Trade Agreements with Peru, Colombia, Panama, and
South Korea. He stated:
We've negotiated fair agreements, and now it's up to the Congress, it's time for the Congress to pass these trade agreements to help build a hemisphere that lives in liberty, and trades in freedom, and grows in prosperity. These trade bills are important economic measures, and they are important national security measures, as well.
WTO Hosting Global Review of Aid for Trade
11/02/07 09:41 PM
On
November 1, 2007, the WTO announced that it will be
hosting "Mobilizing Aid for Trade: A Global Review"
at its Geneva headquarters on November 20-21. 2007.
The review will be preceded by a technical workshop
on monitoring and evaluation of Aid for Trade on
November 19, 2007. The review will also be open to
registered NGOs and the press. The WTO states:
A tentative program can be found here.
The Global Aid-for-Trade Review is the focal point of WTO's monitoring mandate for 2007. It will provide an overview of what is — and what is not — happening in the delivery of Aid-for-Trade, including current flows, existing gaps, and where improvements need to be made. It will also create incentives — by shining a “spotlight” on the issues — to deliver more and better Aid-for-Trade, and to strengthen mutual accountability between partner countries and donors.
A tentative program can be found here.