Archive for the ‘Export Reform’ Category


Dec

8

Commerce Proposes Broad New License Exception


Posted by at 11:48 pm on December 8, 2010
Category: CCLExport Reform

Export ReformIn tomorrow’s Federal Register, the Department of Commerce’s Bureau of Industry and Security will propose, as part of the export reform initiative, a new license exception called the Strategic Trade Authorization (STA). The new license exception will eliminate current license requirements for exports of a large number of items on the Commerce Control List to 162 destinations. The exact list of items eligible for this exception is not yet completely finalized because BIS has not yet designated “Tier 1” items, i.e., the most sensitive items on the CCL, all of which will not be eligible for this new exception.

Countries not eligible for exports under License Exception STA include, not surprisingly, all the countries subject to complete or partial arms embargos, as listed here and including, for example, China, Venezuela, Haiti, Vietnam, Lebanon and Belarus. Ineligible countries also include countries not subject to any arms embargo, including the U.A.E., Malaysia, Qatar, Angola and Pakistan.

Exporters using License Exception STA will be required to comply with other conditions as a prerequisite to the availability of the exception, most notably a requirement that the exporter report exports using the exception to BIS under the provisions of § 743.1 of the Export Administration Regulations. Additionally, a special Destination Control Statement will be required for exports under License Exception STA.

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Copyright © 2010 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Nov

10

Oh Goody! Another Export Control Bureaucracy.


Posted by at 10:21 pm on November 10, 2010
Category: Export Reform

Bureaucracy

Because we apparently have too many agencies involved in export control, the answer to this problem is, somewhat surprisingly, yet another export agency. Today the White House issued an order establishing the Export Enforcement Coordination Center within the Department of Homeland Security. The order requires the EECC to “coordinate” among State, Commerce, Treasury, DOJ, Defense, Homeland Security, Energy and the Office of the Director of National Intelligence.

The coordination mandate described by the Order requires the EECC

[to] serve as the primary forum within the Federal Government for executive departments and agencies to coordinate and enhance their export control enforcement efforts and identify and resolve conflicts that have not been otherwise resolved in criminal and administrative investigations and actions involving violations of U.S. export control laws.

Of course, to make sure that no agency gets its nose bent out of shape by the EECC, the order underlines that

[n]othing in this order shall be construed to provide exclusive or primary investigative authority to any agency. Agencies shall continue to investigate criminal and administrative export violations consistent with their existing authorities

In other words, the EECC will hold monthly meetings where, over coffee and bagels, each agency will tell war stories and boast of its enforcement prowess. I’m probably not alone in thinking that this time and money might be better spent in industry education and outreach efforts.

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Copyright © 2010 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Sep

8

Sierra-November-Alpha-Foxtrot-Uniform


Posted by at 8:43 pm on September 8, 2010
Category: Export Reform

Military ComputersOne of the stated goals of export control reform is to unify the export licensing systems used by the Treasury, Commerce and State Departments. Each system — except, of course, for Treasury’s dead-tree system — has it advocates with some rooting for D-Trade, the system used by State, and others rooting for SNAP-R, the Commerce System, to prevail in this war of the Titans. In fact, the winning licensing system will not be any of these but is instead an electronic licensing system that likely is completely unfamiliar to 99.9 percent of exporters.

In the recently posted minutes of the July plenary session of the Defense Trade Advisory Group, Brian Nilsson, a member of the White House’s export control reform task force from the National Security Council, revealed the winner to the audience at DTAG. It is … (drum roll, please) … USXPORTS. Say what? USXwhat?

USXPORTS is a system developed by the DoD in 2003 to assist DOD’s internal processing of its review of export license requests at State and Commerce. Part of the goal of USXport was to enable DoD to receive electronic export application forms from State and Commerce, rather than requiring them to roll up paper copies and shoot them through pneumatic tubes to the Pentagon.

Forgive me for being cynical, but this doesn’t strike me as good news. If I were to select a government agency to develop a user-friendly electronic licensing interface, the Pentagon would be at the very bottom of my list. “User-friendly” and “Pentagon” go together about as well as “military” and “music” or “military” and “justice.” Expect something ugly, confusing, clunky and bureaucratic that requires a user to memorize military acronyms, numeric codes, and service jargon. Get used to the 24-hour clock and the military alphabet now before it is too late.

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Copyright © 2010 Clif Burns. All Rights Reserved.
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Sep

7

Washington Times Lashes Out Against Export Reform


Posted by at 8:41 pm on September 7, 2010
Category: CCLExport ReformUSML

Sun Myung MoonAs the troubled Washington Times enters into what may be its final days, unless it accepts the cold embrace and re-emergence of its founder, the Rev. Sun Myung Moon, the paper has turned its back on some of it former friends and given a forum to, of all people, Gary Milhollin of the Wisconsin Project on Nuclear Arms. Even though much of export reform is in areas that have nothing to do with Nuclear Arms, Mr. Milhollin — quelle surprise — is no fan of any export reform at all

Gary Milhollin, director of the Wisconsin Project on Nuclear Arms Control, called the new policy a “defense industry bailout.”

“The financial industry and the auto industry had their bailouts, now it is the defense industry’s turn,” he said.

Mr. Milhollin also said the United States steadily relaxed arms-export controls since the end of the Cold War. “We have already reduced controls to the bone,” he said.

I can only imagine that Mr. Milhollin hasn’t glanced at the Commerce Control List or the United States Munitions List recently or even at all if he can say we have already reduced controls to the bone with a completely straight face.

The number of items on the CCL that have no business being there is, as most readers of this blog will know, significant. My favorite example, of course, is “horses by sea” controlled by ECCN 0A980. But no survey of the oddities of the CCL would be complete without mentioning controls on items easily obtainable throughout the world such as triethanolamine (ECCN C350.c.9) used in cosmetics such as shaving cream. Other unique oddities of the list include thumbcuffs, whips, cattle prods, fingerprint inks, pumps and valves, muzzle-loading pistols and rifles, and optical sights for BB guns.

And the USML has its own share of unnecessary controls, starting with, of course, its legendary controls on military railway trains which have pretty much gone the way of muzzle-loading pistols, catapults, jousting lances, and military calvary brigades as items of warfare. Others include weapons silencers, flash suppressors, rifle parts, body armor, powder bags, and cartridge casings, all of which are readily available outside the United States.

None of this sounds to me like these two lists have been “cut to the bone.”

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Copyright © 2010 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

Aug

2

What One Hand Giveth, the Other Taketh Away


Posted by at 9:51 pm on August 2, 2010
Category: BISExport Reform

Kevin Wolf
ABOVE: Kevin Wolf

Today’s edition of the Washington Tariff & Trade Letter has an article (paid subscription required) reporting on the July 27 meeting of the Sensors and Instrumentation Technical Advisory Committee of the Bureau of Industry and Security (“BIS”). At that meeting, Assistant Secretary of BIS, Kevin Wolf had this to say to the committee members:

To the extent that something today, tomorrow or after the reforms no longer requires authorization for export when it did previously, that will come with a price associated with it

That price, according to Wolf, could be “reexport controls or notification.” Obviously BIS has legitimate concerns about diversion of a product from a country on its “nice” list to a country on the agency’s “naughty” list.

However, the ability of the agency to exercise control over U.S.-origin items that can be legally exported without a license is open to some question. Certainly a foreign court would raise those jurisdictional questions in any effort to extradite a defendant accused of an unlicensed re-export that was in full compliance with local laws. And whether a U.S. court would be inclined to exercise criminal jurisdiction over a foreign defendant in such a case is also an open question. The whole notion that the United States has what amounts to universal jurisdiction over U.S. origin products and the people who touch them, wherever located, is built on a shaky foundation that more or less crumbles when the U.S. permits unlicensed exports of those products.

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Copyright © 2010 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)