In a laudable effort to increase transparency of its operations and processes, the Bureau of Industry and Security (“BIS”) has launched an initiative to release statistics and data on at least part of its operations. The new “data portal” can be found here. And although it’s clearly a work in progress, there are still some interesting factoids that can be gleaned from the “2014 Statistical Analysis of BIS Licensing” that appears there.

First, export control reform did not create a licensepocalypse. Many ill-mannered cynics (though not me, in this case) speculated that the onslaught of license applications for new 600 series items transferred from the USML would overwhelm BIS staff and result in a license tar pit from which fossilized approvals would emerge centuries, if not eons, later. The new figures however show a steady decrease in licensing times. Since 2010 average license processing times have decreased from 31 to 23 days even though the number of applications processed each year has increased from approximately 22,000 to 31,000. And, not surprisingly, the largest category of applications processed by BIS was the 600-series ECCN 9A610, which covers military aircraft and commodities.

Second, BIS grants the overwhelming majority of licenses that it processes. Of the approximately 31,000 applications processed in 2014, only 321 were denied with the remainder being returned without action or approved. The top items that were denied were, in this order, rifle scopes, encryption software, and EAR99 items. Although I understand rifle scopes and EAR99 items (for which licenses are required only when exported to bad people or for bad uses) being on this list, I am a bit baffled as to why licenses for 5D002 software receives so many denials. It’s not like there’s any real reason to control encryption software given that the U.S. (despite some self-delusions in this regard) does not have a monopoly on secure encryption technology.

Finally, I have just one little wish for the data portal. It would be tremendous if BIS would provide similar data on classification requests, particularly processing times. The classification process is just as important as, and in some instances even more important than, the licensing process. And I suspect that the processing time figures do not look quite as rosy as they do for licensing.

On Monday, BIS announced in an “interim final” rule (a top contender for the best oxymoronic regulatory phrase ever) imposing export controls on Harry Potter’s invisibility cloak as well as on tarnhelms, the predecessor technology to the invisibility cloak.   Actually, the control, which was effective immediately upon publication, was placed on a high-tech equivalent of those two items, namely, XBS epoxy systems.

The website of Space Photonics, which is the apparent developer of this technology, explains the technology.  According to that website, XBS epoxy systems are

proven effective in obfuscation of critical technology components against X-Ray and Terahertz Microscopy imaging attempts … developed to conceal critical components from adversaries.

The picture on the left is a visual demonstration of the technology.

One interesting issue of an immediately effective “interim final” rule is a simple commercial issue. Suppose one of the systems was in transit on the date of publication. If it crossed the U.S. border after the rule was published, did the exporter violate the law? The rule has no grandfathering or savings provision, so the apparent answer would be that the exporter did violate the law and could be subject to civil penalties. It seems doubtful that BIS would fine someone in that situation, but it’s hard to see why the immediately effective rule did not address this issue rather than throw any such exporters on the presumed mercy of BIS.

Because it is an “interim not-yet-final but almost and pretty much but not quite final rule,” BIS will permit comments on the rule until January 15, 2016, after which BIS will presumably issue the “final and we really mean final this time final” rule.

If you are attending BIS Update 2015 and would like to get together for some free food and drink, please drop me an email at [email protected]. I have some invitations for a reception being held at Bryan Cave on the evening of November 3 which I can send to you. I’ll be there but, more importantly, so will be things to eat and drink.