Yesterday the Bureau of Industry and Security (“BIS”) published in the Federal Register an Advance Notice of Proposed Rulemaking. In the Notice, BIS proposed to fill in Country Group C of Supplement 1 to Part 740. Under the BIS proposal, the countries in Group C would be called “Destinations of Diversion Concern.”

BIS says in the Notice that licensing policy would “likely change” for exports going to countries listed in the new Group C. I think BIS is just being a little coy with the “likely” business — you can pretty much bet that licensing policy will certainly change. Why else bother with the list?

The Notice lists the factors that will be considered before a country is admitted to the new club:

• Transit and transshipment volume;

• Inadequate export/reexport controls;

• Demonstrated inability to control diversion activities in this destination;

• Government not directly involved in diversion activities; and

• Government unwilling or unable to cooperate with the U.S. in interdiction efforts.

So, who do we think is going to be on the list? BIS won’t say in this “Advance Notice.” But we think that BIS has at least one country in mind and that this “Advance” Notice is a shot across the bow aimed at the UAE. It’s only been several months since Assistant Secretary Padilla of BIS and Undersecretary Abdulla Bin Ahmed Al-Saleh of the UAE engaged in a war of words over diversion of shipments from the UAE to Iran and other places of concern.

Any other ideas? Leave them in the comments where I suspect that they just might be seen by BIS.

Permalink


Copyright © 2007 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)