Archive for the ‘Licensing’ Category

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:

Slackers Rejoice! DDTC Extends ITAR Authorizations Expiration Dates for ECR Shifted Items

Thursday, November 5th, 2015 by Danielle McClellan

By: Danielle McClellan

Maybe you are not an ECR slacker.  Most likely, despite your great plan and diligent efforts, you are one of the many exporters who haven’t quite figured out yet which of your hardware, materials, software and technical data shifted from the USML to the CCL as a result of Export Control Reform (ECR).  On paper, the task of reclassifying everything sounds easy.  In practice, it requires a lot of resources and time.  No one ever said ECR would make your life easier in the short term.

Enter DDTC to make things easier for some exporters for a bit longer—not something DDTC is well known for doing.  DDTC certainly knows from its experience processing license applications that sometimes it takes longer to get something done than outsiders would first expect.  Regardless of it’s motives, DDTC has extended the transition period for ITAR authorizations involving items that shifted from USML to CCL jurisdiction.

When ECR went into full force in 2013, DDTC published a final rule that provided a “Transition Plan” for exporter’s to follow regarding ITAR licenses, authorizations, and agreements. At that time, DDTC stated that all ITAR licenses, authorizations, and agreements would remain valid for a period of two years from the effective date of the rule (October 15, 2013) for  items that shifted from the USML to the CCL—there was no change to the validity period authorizations for items that did not shift.   Authorizations that covered both USML and CCL items remained valid until the expiration as long as simple amendments were made to agreements to add the USML x paragraph designation for non-USML items.

DDTC recently decided to give more flexibility for authorizations covering only items that shifted to the CCL.   On its website, DDTC recently added revisions to the various expiration dates  by adding an Updated Guidance paragraph after the previously issued guidance:

“A license or authorization issued by the Department will be effective for up to two years from the effective date of the revised USML category if all the items on the license or authorization have transferred to the export jurisdiction of the Department of Commerce.” (78 Fed. Reg. 67,752)

Updated guidance: Licenses or authorizations that would otherwise expire at the conclusion of the referenced two-year period will remain valid for 48 months from the date of issuance, or as otherwise indicated on the license or authorization.

“Approvals issued for agreements submitted prior to the effective date of the relevant revised USML category that contain transitioning and non-transitioning items will remain valid until expired, unless they require an amendment, or for a period of two years from the effective date of the relevant final rule, whichever occurs first, unless otherwise revoked, suspended, or terminated.” (78 Fed. Reg. 67,752)

Updated guidance: For agreements that would otherwise expire at the conclusion of the referenced two-year period, DDTC is extending the period of validity by one year.

“Approvals issued for agreements submitted prior to the effective date of the relevant revised USML category that contain solely transitioning items will remain valid for a period of two years from the effective date of the relevant USML category, unless revoked, suspended, or terminated.” (78 Fed. Reg. 67,752)

Updated guidance: For agreements that would otherwise expire at the conclusion of the referenced two-year period, DDTC is extending the period of validity by one year.

Justice is Blind…Unless You’re a Native of China—In That Case, Assume the Position!

Thursday, October 1st, 2015 by Danielle McClellan

By: Danielle McClellan

Earlier this year (May 2015) a Chinese-American Physics Professor at Temple University was dragged from his home in handcuffs accused of emailing design schematics for a pocket heater to a colleague in China.  This pocket heater is not the device you put in your coat pocket at chilly November football games but is a sensitive piece of equipment used in superconductor research.  Dr. Xiaoxing Xi, Chairman of the Physics Department, was arrested in front of his daughters, stripped of his professional position, and restricted from having any communications with anyone at Temple University. DOJ Press Release: http://www.justice.gov/usao-edpa/pr/university-professor-charged-wire-fraud-scheme.

Fast forward to last week…the government has dropped all charges against Dr. Xiaoxing Xi after finding out that the design schematics that they thought were for a pocket heater were actually for something else. Apparently, the prosecutors and FBI agents did not understand the design and jumped the gun when they saw the email with the blueprints. The US government is aggressively combating against outside and inside employees trying to steal government and corporate secrets…but that doesn’t excuse this.

Dr. Xi said this to the New York Times: I don’t expect them to understand everything I do. … But the fact that they don’t consult with experts and then charge me? Put my family through all this? Damage my reputation? They shouldn’t do this. This is not a joke. This is not a game.

Dr. Xi’s lawyer, according to the Times, went further and suggested that the prosecution targeted Dr. Xi because he was Chinese. If he was Canadian-American or French-American, or he was from the U.K., would this have ever even got on the government’s radar? I don’t think so.

It should also be noted that a similar case was dismissed a few months ago…seems that following the rules may not keep you out of trouble anymore if you are an American citizen of Chinses ancestry.

More Information: http://www.nytimes.com/2015/09/12/us/politics/us-drops-charges-that-professor-shared-technology-with-china.html?_r=4

Changes to DDTC Paper Applications

Tuesday, June 2nd, 2015 by Danielle McClellan

By: Danielle McClellan

DDTC is in the process of modernizing its infrastructure; the newest change will directly impact paper applications. At this time, the ELLIE Net system allows users to track paper applications such as General Correspondence (GC) Letters and Applications for Permanent/Temporary Export or Temporary Import of Classified Defense Articles and Related Classified Technical Data (DSP-85). Going forward ELLIE Net will be retired and users will no longer have the ability to access the system to track their paper applications.

DDTC is urging users to include a valid email address on all paper applications so that DDTC can send an email with the application number to users. DDTC will use this transition period to work out any problems with the interim process.

Information:  http://www.pmddtc.state.gov/documents/WebNotice_PaperApplications.pdf