Archive for the ‘Licensing’ Category

Miltech, Inc. of Northampton, MA Receives 18 Charges of Alleged Export Violations

Wednesday, November 15th, 2017 by Danielle McClellan

By: Ashleigh Foor

On September 25, 2017, Miltech, Inc. of Northampton, MA was charged a civil penalty of $230,000 due to engaging in conduct prohibited by the EAR when it exported items subject to the EAR from the United States to China and Russia without the required BIS Licenses. On eighteen separate occasions between, on, or around October 14, 2011 and July 14, 2014, Miltech exported active multiplier chains, items classified under Export Control Classification Number (“ECCN”) 3A001.b.4 and valued in total at approximately $364,947, without seeking or obtaining the licenses required for these exports pursuant to section 742.4 of the EAR. These items are controlled on national security and anti-terrorism grounds.

Miltech received 18 charges of 15 C.F.R. § 764.2(a) for engaging in prohibited conduct. $180,000 of the $230,000 penalty must be paid within 30 days, and the remaining $50,000 will be suspended and waived after two years if Miltech fulfills the terms of its settlement agreement and this order.  The company will not be debarred if penalty is paid as agreed and Miltech complies with other terms of this settlement.

Automated Commercial Environment Export Reports… What’s New?

Monday, October 16th, 2017 by Danielle McClellan

(Source: Global Reach Blog)

With more than 128,000 Automated Commercial Environment (ACE) export reports run since deployment mid-2015 and more than 6,762 reports run during the month of June 2017 alone, it’s evident that the trade community is using the export reports feature in ACE, and its popularity is ever increasing.

We received a lot of positive feedback and information on ACE Export Reports by EIN that helped us improve the utility of the feature, as well as enhance our training resources library.

Customer feedback continues to shape the way we do business. The following examples help illustrate the updates prompted and informed by such customer feedback:

  • The available data elements have been updated to include the Country of Ultimate Destination.
  • U.S. Customs and Border Protection (CBP) created 11 short topic-based export reports training videos available in the ACE Portal and on the CBP website.
  • A webinar and Q&A on ACE Export Reports was conducted in mid-December 2016 and subsequently an updated version of that webinar that was conducted in July 2017 and may be viewed online now for on-demand viewing and training needs.
  • The Notice of Proposed Rulemaking effective in July 2017 added additional data elements (the Internal Transaction Number, filer name and date of export) to the AES 203 (Agent-Filed Routed) Report to make this report useful. This data is now also searchable by filing date and export date.

These are just a few of the ways that you’ve helped us more effectively help you. We realize that users are exploring the export reports feature in ACE. We want to empower our users to utilize all of the available functionality.

And, here are just a few reminders:

  • The three available reports include: AES 201 (Filer), AES 202 U.S. Principal Party in Interest (USPPI) and AES 203 (Agent-Filed Routed).
  • The AES 201 and AES 202 will initially return a smaller universe of data elements (25). Learn how to add or remove data elements by watching the “Modifying Report Queries” video available on the CBP Export Reports resource page and in the Training Resources area in the ACE Portal.
  • The AES 203 report will only return the handful of data elements that are authorized by the Foreign Trade Regulations. ACE Importer accounts automatically have access to export reports for Employer Identification Numbers (EINs) already vetted by CBP on the import side. ACE Exporter accounts must be vetted by the U.S. Census Bureau.

Exporters are able to run comprehensive reports based on their EIN and review the Electronic Export Information that has been filed internally and externally. Authorized agents are able to run reports across the universe of filings they have transmitted, as well as run individual reports at the client level. The benefits of having this type of on-demand access is revolutionary to the export compliance landscape and gives the trade community a powerful auditing capability. We highly recommend that you obtain authorization to access reports if you have not done so already, and if you have access, to explore the functionality that is available to you.

Until the next update, happy reporting!

P.S. There is even a “Late Filing Indicator” data element that can be added to customized reports … how beneficial is that to your compliance pursuit?

BIS Implements Updates to Improve SNAP-R for License Application Submissions

Monday, October 16th, 2017 by Danielle McClellan

By: Ashleigh Foor

Per the request of the export controls industry, BIS has designed new updates for the Single Network Application Process-Redesign (SNAP-R), BIS’s electronic system for the submission of license applications, commodity classification requests, License Exception AGR notifications, and License Exception STA eligibility requests. This will be the first in a series of updates meant to make SNAP­-­R more user-friendly and efficient. Additional updates will be implemented in the future.

Included in the new updates is the introduction of security questions. Before this update, SNAP-R users would have to request assistance from SNAP-R account administrators or BIS to reset login IDs and passwords and to receive a reminder of their company identification number (CIN). Starting now, all new SNAP-R registrants will be required to provide answers to four of ten security questions as part of the registration process. Moving forward, the security questions put into place will identify and help users retrieve information on their own. Existing users will be prompted to choose security questions and answers at their next login.

Other changes include:

  • Work Item Reference Numbers: SNAP-R account holders are no longer limited to the previously required format (i.e., AAA####) for Work Item reference numbers.
  • Line Item Value Calculation: When listing the information for an export item on a license application, SNAP-R account holders can now choose to calculate the value of the item by multiplying the unit value by the quantity of items or to enter the total price of the item independent of the item’s quantity and unit value.

Other SNAP-R Features: Did you know that SNAP-R:

  • Can be used on browsers other than Internet Explorer®?
  • Has a spell check function?
  • Allows a previously created Work Item (e.g., a license application) to be used again when preparing a new Work Item for submission?

The SNAP-R manual has been revised and updated to incorporate the changes above as well as to clarify the tools available to SNAP-R system users. (https://www.bis.doc.gov/snap-r-updates)

Exporting to Hong Kong? Don’t Forget Your Written Proof for Hong Kong!

Thursday, May 11th, 2017 by Danielle McClellan

By: John Black

Effective April 19, 2017, the Bureau of Industry and Security (BIS) has new documentation requirements for export and reexports under licenses and license exceptions to and from Hong Kong.

BIS will  require persons planning on exporting and reexporting to Hong Kong any items subject to the Export Administration Regulations (EAR) and controlled on the Commerce Control List (CCL) for national security (NS), missile technology (MT), nuclear nonproliferation (NP column 1), or chemical and biological weapons (CB) reasons to obtain, prior to the export or reexport, a copy of a Hong Kong import license or a written statement from the Hong Kong Government that such a license is not required. The purpose of this change is to require that the Hong Kong Government issue an import license as an acknowledgement that sensitive EAR-controlled items are entering Hong Kong and as an agreement to prevent unauthorized reexport or transfer of those items to prohibited destinations. Interestingly, the prohibited destination that most concerns the US is the People’s Republic of China (PRC). The EAR treats Hong Kong as a separate “country” from the PRC even though the PRC, the United Nations, and nearly everybody else in the world considers Hong Kong to be part of the PRC because Hong Kong is part of the PRC.

Leaving behind the interesting point that the EAR treats Hong Kong as if it is not part of the PRC, there are a lot of details in this new rule. In addition what was described above, this rule will also require persons planning on reexporting from Hong Kong any item subject to the EAR and controlled for NS, MT, NP column 1, or CB reasons to obtain a Hong Kong export license or a statement from Hong Kong government that such a license is not required.

View full details of the rule at http://www.learnexportcompliance.com/News/The-Export-Control-Update-February-2017.aspx#EAR

BIS FAQs Related to Rule: https://bis.doc.gov/index.php/policy-guidance/foreign-import-export-license-requirements/hong-kong

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2017-01-19/pdf/2017-00446.pdf

EAR Expands License Application Support Document Requirements for Hong Kong

Thursday, March 2nd, 2017 by Danielle McClellan

By: John Black

Effective April 19, 2017, the Bureau of Industry and Security (BIS) will  require persons planning on exporting and reexporting to Hong Kong any items subject to the Export Administration Regulations (EAR) and controlled on the Commerce Control List (CCL) for national security (NS), missile technology (MT), nuclear nonproliferation (NP column 1), or chemical and biological weapons (CB) reasons to obtain, prior to the export or reexport, a copy of a Hong Kong import license or a written statement from the Hong Kong Government that such a license is not required.   The purpose of this change is to require that the Hong Kong Government issue an import license as an acknowledgement that sensitive EAR-controlled items are entering Hong Kong and as an agreement to prevent unauthorized reexport or transfer of those items to prohibited destinations.  Interestingly, the prohibited destination that most concerns the US is the People’s Republic of China (PRC).  The EAR treats Hong Kong as a separate “country” from the PRC even though the PRC, the United Nations, and nearly everybody else in the world considers Hong Kong to be part of the PRC because Hong Kong is part of the PRC.

Leaving behind the interesting point that the EAR treats Hong Kong as if it is not part of the PRC, there are a lot of details in this new rule.  In addition what was described above, this rule will also require persons planning on reexporting from Hong Kong any item subject to the EAR and controlled for NS, MT, NP column 1, or CB reasons to obtain a Hong Kong export license or a statement from Hong Kong government that such a license is not required. This final rule will be effective April 19, 2017.

The following amendments have been made:

  • In § 740.2, add paragraphs (a)(19) and (20) to read as follows:

(a) *  *  *

(19) The exporter or reexporter to Hong Kong of any item subject to the EAR and controlled on the CCL for NS, MT, NP Column 1, or CB reasons has not received one of the following with respect to the item:

(i) A copy of an import license issued to the Hong Kong importer by the Government of the Hong Kong Special Administrative Region, pursuant to the Hong Kong Import and Export (Strategic Commodities) Regulations, that covers all items to be exported or reexported pursuant to that license exception for which a Hong Kong import license is required and that is valid on the date of the export or reexport that is subject to the EAR; or

(ii) A copy of a written statement issued by the Government of the Hong Kong Special Administrative Region that no import license is required to import into Hong Kong the item(s) to be exported or reexported. The statement may have been issued directly to the Hong Kong importer or it may be a written statement available to the general public. The statement may be used for more than one export or reexport to Hong Kong so long as it remains an accurate statement of Hong Kong law.

(20) The reexporter from Hong Kong of any item subject to the EAR controlled on the CCL for NS, MT, NP column 1, or CB reasons has not received one of the following with respect to the item:

(i) An export license issued by the Government of the Hong Kong Special Administrative Region, pursuant to the Hong Kong Import and Export (Strategic Commodities) Regulations, that covers all items to be reexported pursuant to that license exception for which a Hong Kong export license is required and that is valid on the date of the reexport that is subject to the EAR; or

(ii) A copy of a written statement issued by the Government of the Hong Kong Special Administrative Region that no Hong Kong export license is required for the item(s) to be rexported.

The statement may have been issued directly to the Hong Kong reexporter or it may be a written statement available to the general public. The statement may be used for more than one reexport from Hong Kong so long as it remains an accurate statement of Hong Kong law.

  • 748.9(b) is amended by revising the section heading, revising paragraph (b) and all notes to paragraph (b), and adding two sentences to the end paragraph of (e)(1), to read as follows:

§ 748.9    Support documents for evaluation of foreign parties in license applications and/or for promoting compliance with license requirements.

(b) Requirements to obtain support documents for license applications. Unless an exception in paragraph (c) of this section applies, a support document is required for certain license applications for:

(1) The People’s Republic of China (PRC) other than the Hong Kong Special Administrative Region (see §§ 748.10 and 748.11(a)(2));

(2) ‘‘600 Series Major Defense Equipment’’ (see § 748.11);

(3) Firearms and related commodities to member countries of the Organization of American States (see § 748.12); and

(4) The Hong Kong Special Administrative Region of the People’s Republic of China (see § 748.13).

Note 1 to Paragraph (b): On a case-by-case basis, BIS may require license applicants to obtain a support document for any license application.

Note 2 to Paragraph (b): For End-Use Certificate requirements under the Chemical Weapons Convention see § 745.2 of the EAR.

*       *       *       *       *

(e) *  *  *

(1) *  *  * The documents issued by the Government of the Hong Kong Special Administrative region that are required pursuant to § 748.13 are not used to evaluate license applications. They must be obtained before shipment and need not be obtained before submitting a license application.

  • Redesignate § 748.13 as § 748.14 and add new § 748.13 to read as follows:

§ 748.13    Hong Kong import and export licenses.

(a) Requirement to obtain the document—(1) Exports and reexports to Hong Kong. An exporter or reexporter must obtain the documents described in paragraph (a)(1)(i) or (a)(1)(ii) of this section before using a license issued by BIS to export or reexport to Hong Kong any item subject to the EAR and controlled on the CCL for NS, MT, NP column 1, or CB reasons. Collectively, the documents issued by Hong Kong must cover all of the items to be exported or reexported pursuant to a license.

(i) A copy of an import license issued to the Hong Kong importer by the Government of the Hong Kong Special Administrative Region, pursuant to the Hong Kong Import and Export (Strategic Commodities) Regulations, that covers the items to be exported or reexported pursuant to that BIS license for which a Hong Kong import license is required and that is valid on the date of the export or reexport that is subject to the EAR; or

(ii) A copy of a written statement issued by the Government of the Hong Kong Special Administrative Region that no import license is required to import into Hong Kong the item(s) to be exported or reexported to Hong Kong. The statement may have been issued directly to the Hong Kong importer or it may be a written statement available to the general public. The statement may be used for more than one export or reexport to Hong Kong so long as it remains an accurate statement of Hong Kong law.

(2) Reexports from Hong Kong. No license issued by BIS may be used to reexport from Hong Kong any item subject to the EAR controlled on the CCL for NS, MT, NP column 1, and/or CB reasons unless the reexporter has received either:

(i) An export license issued by the Government of the Hong Kong Special Administrative Region, pursuant to the Hong Kong Import and Export (Strategic Commodities) Regulations, that covers all items to be rexported pursuant to that BIS license for which a Hong Kong export license is required and that is valid on the date of the reexport that is subject to the EAR; or

(ii) A copy of a written statement issued by the Government of the Hong Kong Special Administrative Region that no export license is required from Hong Kong for the item(s) to be reexported. The statement may have been issued directly to the Hong Kong reexporter or it may be a written statement available to the general public. The statement may be used for more than one reexport from Hong Kong so long as it remains an accurate statement of Hong Kong law.

(b) Recordkeeping. The documents required to be obtained by paragraph (a) of this section must be retained and made available to the U.S. Government upon request in accordance with part 762 of the EAR.

  • In § 762.2 remove the word ‘‘and’’ from the end of paragraph (b)(52); remove the period from the end of paragraph (b)(53) and add in its place a semicolon followed by the word ‘‘and’’; add paragraph (b)(54) to read as follows:

§ 762.2    Records to be retained.

*       *       *       *       *

(b) *  *  * (54) § 748.13, Certain Hong Kong import and export licenses.

 

Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2017-01-19/pdf/2017-00446.pdf

DDTC Posts Revision 4.4a of the Agreement Guidelines

Wednesday, October 12th, 2016 by Danielle McClellan

(Source: State/DDTC)

Revision 4.4a of the Agreement Guidelines has been posted and replaces Revision 4.4.

Revision 4.4a corrects an inadvertent omission on page 152. Both Revision 4.4a and a preamble with a summary of changes can be found here. Revision 4.4a is effective September 1, 2016.

The Expired DSP-83 is Back

Tuesday, July 12th, 2016 by Danielle McClellan

By: Danielle McClellan

Effective immediately an expired DSP-83 forms that the DDTC receives will be processed.

The notice published on the State Department website on May 6, 2016 is rescinded.  If you received a proviso directly an upload of the new DS-83 form in accordance with the rescinded Notice can hereby disregard the proviso by citing this revised notice.

The State Department has updated its policy regarding the DSP-83, although it cannot mandate the use of the expired form, an individual or entity may voluntarily submit the form and it can be processed as long as it contains all of the information and certifications required by the current, unexpired form. At this point, the DSP-83 has not been substantially amended so DDTC will continue to accept the expired form.

DDTC is strongly urging that entities and individuals that do not use the current DSP-83 form provided by the them to implement the new form no later than October 1, 2016 to avoid confusion during the future revisions.

Link to Notice: http://pmddtc.state.gov/documents/DSP83_WebNotice2.pdf

Say Good Bye to License Type C32…and Get to Know C33

Tuesday, July 12th, 2016 by Danielle McClellan

By: Danielle McClellan

Effective October 1, 2016, the Bureau of Industry and Security (BIS) will remove license type C32, No License Required (NLR), from the list of License Types found in the Automated Export System (AES). Beginning October 1, 2016, C33 will be the only License Type in AES designating a NLR shipment. Changes to License Type C32 designated Electronic Export Information (EEI) will be accepted in AES for 6 months after the October 1, 2016 effective date.

United States Principal Parties in Interest (USPPIs) and their authorized filing agents (AES filers) must adhere to the Export Controls Classification Number (ECCN) reporting requirements for NLR designated shipments under C33 as per the EAR 758.1(g) (3).

Items that have a reason for control other than or in addition to Anti-Terrorism (AT), should report NLR (C33) as the license type in the EEI filing.

A complete list of AES License Type Codes is available at: https://www.cbp.gov/sites/default/files/assets/documents/2016-Jun/Appendix_F.pdf

For questions regarding these AES changes, please contact the Bureau of Industry and Security by email at ECR_AES@bis.doc.gov or at (202) 482-4933.

For general questions regarding AES, please contact the International Trade Management Division at the Bureau of the Census at 1-800-549-0595, option 1.

For classification questions about ECCNs, please contact the Bureau of Industry and Security at one of the numbers below:

  • Outreach and Educational Services Division (located in Washington, DC) (202) 482-4811
  • Western Regional Office (located in Irvine, CA) (949) 660-0144
  • Northern California branch (located in San Jose, CA) (408) 998-8806

Transition to the Refactored AESDirect System in ACE

Wednesday, February 3rd, 2016 by Danielle McClellan

(Source: census@subscriptions.census.gov, 14 Jan 2016)

This message is not intended for filers using AESWebLink and AESDirect EDI Upload. It is strictly for the attention of filers using the legacy AESDirect portal at aesdirect.census.gov and the AESPcLink application.

The Refactored AESDirect system in the Automated Commercial Environment was launched on November 30, 2015. Since that time, filers have submitted over 47,000 accepted shipments using the new system.

As part of the transition of AESDirect to the ACE Portal, the ability to file Electronic Export Information via legacy AESDirect at aesdirect.census.gov and the AESPcLink application will be terminated in stages over the next two months. All legacy AESDirect filers will be notified of their mandatory transition date to the Refactored AESDirect system upon login and be provided a specific date their account will be closed off based upon their Filer ID.

The dates for this transition are based upon the two-digit prefix of the Filer ID and accounts will be closed off from legacy AESDirect accordingly.

  • Prefixes 00-19 on 02/15/2016
  • Prefixes 20-39 on 02/22/2016
  • Prefixes 40-59 on 02/29/2016
  • Prefixes 60-79 on 03/07/2016
  • Prefixes 80-99 on 03/14/2016

Please make sure you have taken steps to begin filing in the Refactored AESDirect system in ACE prior to your mandatory transition date.

For more information regarding the transition, please see our AESDirect Transition to ACE – Refactored AESDirect page here.

For further information or questions, contact the U.S. Census Bureau’s Data Collection Branch.

ACE Export Reports Access Tips

Wednesday, February 3rd, 2016 by Danielle McClellan

The Census Bureau has released a few helpful tips to make the vetting process for obtaining authorization to access your export data in ACE a little easier.

Some helpful tips:

  • Vetting by the Census Bureau Team is NOT required to file Electronic Export Information (EEI) via AESDirect in ACE.
  • Only request “EIN Reports Authorization” if you want to access export reports in ACE.
  • Newly established export accounts without prior filing history at the EIN level will not be authorized to access export reports in ACE.
  • EINs associated with an established ACE Importer Account do not require further vetting by the Census team, therefore do not select the feature “Requests EIN Reports Authorization” when adding the exporter role to an existing account.
  • Submit the Certificate of Authority (COA) for subsidiaries that plan on retrieving export reports. Prior filing history for each requested EIN is required.
  • If you have multiple EINs associated with an account, request access for each EIN and submit a comprehensive COA listing the subsidiaries requesting access.
  • In addition, shipment information must be verified by the Census Team prior to obtaining approval for Reports Authorization.

The information provided in this broadcast will assist you in obtaining Export Reports Access. Please visit our website for additional information on obtaining Exports Reports authorization by the Census Bureau here.

For additional assistance, call the International Trade Helpline at 800-549-0595: