Archive for the ‘BIS’ Category

BIS EAR Licensing Requirements for EAR-Controlled Items Destined to ISIL-Controlled Facilities or Territory

Wednesday, April 6th, 2016 by Danielle McClellan

(Source: Commerce/BIS)

BIS prohibits the shipment of items subject to the Export Administration Regulations (EAR) to the Islamic State of Iraq and the Levant (ISIL) absent a license in conjunction with regulations administered by the Department of the Treasury’s Office of Foreign Assets Control (OFAC). OFAC has designated ISIL as a Specially Designated Global Terrorist (SDGT) and the Department of State has designated ISIL as a Foreign Terrorist Organization (FTO).

As part of its efforts against ISIL, the U.S. Government is targeting not only ISIL’s abilities to raise revenue but also its purchase and use of U.S.-origin items.  BIS is committed to preventing ISIL from procuring U.S.-origin items, like oilfield equipment, that generate wealth as well as components useful for improvised explosive devices to support terrorist activities.  Our goal is to provide industry with information on potential diversion risks to safeguard the export, reexport, and transfer (in-country) of U.S.-origin items and protect national security.

ISIL controls facilities located in the areas which it controls and uses the facilities to generate revenue; some of these facilities require U.S.-origin parts and accessories to operate.  A list of ISIL-controlled facilities in Iraq and the addresses thereof is incorporated into Attachment A of this notice (see below).  BIS advises persons exporting or reexporting U.S.-origin items to Iraq to review Attachment A on a regular basis; it will be updated as necessary.  BIS also reminds persons exporting or reexporting U.S.-origin items to Syria of the existing license requirements for all items subject to the EAR, other than food or medicine classified as EAR99.  The full text of BIS’s licensing requirements and policy specific to Syria is found here.

Exporters/reexporters are advised that sanctions administered by other agencies, including those administered by OFAC, may also impact transactions in the region.  Exporters/reexporters should note that U.S. entities/persons are generally prohibited from engaging in activities with any entities/persons who are on the OFAC administered Specially Designated Nationals and Blocked Persons List.

Pursuant to Section 744.12  of the EAR, BIS requires a license for the export or reexport to an SDGT of any item subject to the EAR.  However, to avoid duplication, U.S. persons are not required to seek authorization for an export or reexport to an SDGT of an item that is subject to both the EAR and OFAC’s regulatory authority from both OFAC and BIS.  Rather, if OFAC authorizes an export from the United States or an export or reexport by a U.S. person to an SDGT, no separate authorization from BIS is necessary.  However, U.S. persons must seek authorization from BIS for the export or reexport to an SDGT of any item subject to the EAR that is not subject to OFAC’s jurisdiction and non-U.S. persons must seek authorization from BIS for any export from abroad or reexport of any item subject to the EAR to an SDGT.  BIS will generally review license applications for exports or reexports to SDGTs under a policy of denial.  No license exceptions or other BIS authorizations are available for the export or reexport to an SDGT of an item subject to the EAR.   Additionally, the EAR does not make contract sanctity available for export or reexport license applications to SDGTs.

BIS’s license requirements for shipments of items subject to the EAR to FTOs are found in Section 744.14 of the EAR.  Note especially the guidance in Section 744.14(e), which is specific to FTOs that are also designated as Specially Designated Terrorists (SDTs) or SDGTs, and directs that the guidance specific to SDTs or SDGTs, as applicable, will apply instead.

BIS also notes that an export, reexport, or transfer (in-country) to geographic areas controlled by ISIL carries a “red flag” and suggests that you exercise caution and strong oversight if you opt to engage in an EAR transaction within these areas. A list of geographic areas known to be under ISIL control is contained in Attachment B (see below).

For additional information on this FAQ or attachments, please contact the Office of Enforcement Analysis at the following: EEinquiry@BIS.DOC.GOV or 202-482-1881.

Belgium Company Pays $350,000 after Exporting Coatings, Pigments and Paints to Iran

Wednesday, April 6th, 2016 by Danielle McClellan

By: Danielle McClellan

Chemical Partners Europe (CPE) S.A. of Brussels, Belgium has been charged with 6 counts of Evasion after exporting coatings, pigments and paints from the US to their facility in Brussels  and then to Iran. The exported items were suitable for use in nuclear facilities and had marine applications, making them subject to the Export Administration Regulations (EAR) as well as the Iranian Transactions Regulations (Governed by the Department of Treasury’s Office of Foreign Assets Control (OFAC)).

Between January 2010 and March 2011, the company purchased the coatings, pigments and paints, valued at $244,358, from a US company and concealed the fact that the ultimate destination was actually Iran. The shipper’s export declarations filed listed CPE as the ultimate consignee and Belgium as the country of ultimate destination. Once CPE received the items they transferred them directly to Iran without proper authorization.

CPE has agreed to pay $350,000 to settle the charges; they will not be debarred. Charging Letter

BIS & OFAC Slightly Relax Controls on Cuba

Wednesday, April 6th, 2016 by Danielle McClellan

By: Danielle McClellan

On March 16, 2016, the Bureau of Industry and Security (BIS) published a final rule amending the Export Administration Regulations (EAR) by allowing vessels departing the US on temporary sojourn to Cuba with cargo for other destinations to travel to Cuba under a license exception instead of having to obtain a license for the cargo. The rule also allows exports of certain items to persons authorized by the Department of the Treasury to establish and maintain a physical or business presence in Cuba. Finally, the rule adopts a licensing policy of case-by-case review for exports and reexports of items that would enable or facilitate export of items produced by the private sector in Cuba (subject to certain limitations).

Specific Changes to the EAR:

This rule revises § 736.2(b)(8) of the EAR, which prohibits shipments from transiting certain destinations, to explicitly state that the prohibition does not apply if a license or license exception authorizes the in-transit shipment.

  • This rule revises § 740.15(d)(6) of the EAR to authorize temporary sojourn to Cuba of a vessel carrying cargo destined to other countries provided that such cargo departs with the vessel at the end of its temporary sojourn to Cuba, does not enter the Cuban economy and is not transferred to another vessel while in Cuba.
  • This rule revises § 740.21(e) to remove the individual references to categories of persons authorized by OFAC to establish and maintain a physical or business presence in Cuba pursuant to 31 CFR 515.573, and to authorize exports and reexports to all such persons and to persons whose physical or business presence is authorized by a specific license issued by OFAC.
  • This rule revises § 746.2(b)(3)(i), to add a paragraph(b)(3)(i)(D), which sets a policy of case-by-case review of items that will enable or facilitate export from Cuba of items produced by the Cuban private sector.
  • It also revises Note 1 to clarify that the license condition described therein is intended to preclude use of items authorized by licenses bearing that condition from being reexported from Cuba or being used to enable or facilitate exports from Cuba that primarily generate revenue for the state.

Federal Register Notice: https://www.gpo.gov/fdsys/pkg/FR-2016-03-16/pdf/2016-06019.pdf
In addition to the changes to the EAR, The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending the Cuban Assets Control Regulations to further implement these changes along with facilitating travel to Cuba for authorized financial transactions, and authorize additional business and physical presence in Cuba.

Specific Changes to the Cuban Assets Control Regulations:

  • OFAC is amending section 515.565(b) to remove the requirement that people-to-people educational travel be conducted under the auspices of an organization that sponsors such exchanges. This section now authorizes individuals to travel to Cuba provided that, among other things, the traveler engage while in Cuba in a full-time schedule of educational exchange activities that are intended to enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities, and that will result in meaningful interaction between the traveler and individuals in Cuba.
  • OFAC is amending section 515.571 to remove the limitation on the receipt of compensation in excess of amounts covering living expenses and the acquisition of goods for personal consumption by a Cuban national present in the United States in a non- immigrant status or pursuant to other non-immigrant travel authorization issued by the U.S. government. New section (a)(5)(i) explicitly authorizes the receipt of any salary or other compensation consistent with the individual’s non-immigrant status or other non-immigrant travel authorization, provided that the recipient is not subject to any special tax assessment by the Cuban government in connection with the receipt of the salary or other compensation.
  • New section 515.571(e) authorizes all transactions related to the sponsorship or hiring of a Cuban national to work in the United States and provides that an employer may not make additional payments to the Cuban government in connection with the sponsorship or hiring of a Cuban national. Section 515.571(e) also authorizes transactions in connection with the filing of an application for non- immigrant travel authorization. OFAC is also making conforming edits in section 515.560(d)(3) and the Note to section 515.565(a)(5).
  • OFAC is adding section 515.585(c) to authorize individuals who are persons subject to U.S. jurisdiction and who are located in a third country to engage in the purchase or acquisition of merchandise subject to the prohibitions in section 515.204, including Cuban-origin goods, for personal consumption while in a third country, and to receive or obtain services from Cuba or a Cuban national that are ordinarily incident to travel and maintenance within a third country. This provision does not authorize the importation of such merchandise into the United States, including as accompanied baggage. OFAC is making a conforming change to section 515.410.
  • OFAC is amending section 515.584(d) to authorize U-turn transactions in which Cuba or a Cuban national has an interest to be conducted through the U.S. financial system. This provision authorizes funds transfers from a bank outside the United States that pass through one or more U.S. financial institutions before being transferred to a bank outside the United States where neither the originator nor the beneficiary is a person subject to U.S. jurisdiction. Transactions through the U.S. financial system that do not meet these criteria, including all transactions where the originator or beneficiary is a person subject to U.S. jurisdiction, remain prohibited unless otherwise authorized or exempt under the Regulations.
  • OFAC is also making conforming edits to section 515.584(e), regarding unblocking of certain previously blocked funds transfers.
  • OFAC is adding new section 515.584(g) to authorize U.S. banking institutions to process U.S. dollar monetary instruments presented indirectly by Cuban financial institutions. Correspondent accounts used for transactions authorized pursuant to this section may be denominated in U.S. dollars. This section does not authorize banking institutions subject to U.S. jurisdiction to open correspondent accounts for banking institutions that are nationals of Cuba.
  • OFAC is adding new section 515.584(h) to authorize banking institutions to open and maintain accounts solely in the name of a Cuban national located in Cuba for the purposes only of receiving payments in the United States in connection with transactions authorized pursuant to or exempt from the prohibitions of this part and remitting such payments to Cuba. This provision would allow, for example, a Cuban national author located in Cuba to open an account with a bank or online payment platform in the United States to receive payments for sales of her book. This provision is in addition to the two existing authorizations for banking institutions to operate certain accounts on behalf of certain Cuban nationals. See Note to paragraph (a) of section 515.571(a)(5) and section 515.585(b).
  • To avoid confusion, OFAC also is making conforming edits to the Note to section 515.571(a)(5) to clarify that all three account authorizations extend to banking institutions.
  • OFAC is amending section 515.573 to authorize additional persons subject to U.S. jurisdiction to establish a business and physical presence in Cuba.
  • OFAC amended section 515.573 to authorize certain persons subject to U.S. jurisdiction to establish a physical presence, such as an office or other facility, in Cuba, to facilitate authorized transactions. OFAC is now expanding this authorization to include the following additional categories of persons subject to U.S. jurisdiction: entities engaging in non-commercial activities authorized by section 515.574 (Support for the Cuban People); entities engaging in humanitarian projects set forth in section 515.575(b) (Humanitarian projects); and private foundations or research or educational institutes engaging in transactions authorized by section 515.576.
  • OFAC is also adding a note to clarify that the activities that may be carried out by exporters of items exported or reexported pursuant to authorization by the Department of Commerce or OFAC, or that are otherwise exempt, at a physical presence authorized by this section include the assembly of such items.
  • OFAC is adding a new provision in section 515.565 to authorize the provision of educational grants, scholarships, or awards to a Cuban national or in which Cuba or a Cuban national otherwise has an interest. This could include, for example, the provision of educational scholarships for Cuban students to pursue academic studies for a degree. OFAC is also adding a note to section 515.575(b) to clarify that the existing authorization includes provision of grants or awards for humanitarian projects in or related to Cuba that are designed to directly benefit the Cuban people as set forth in that section. Telecommunications and internet- related services.
  • OFAC is amending section 515.578 to allow the importation of Cuban-origin software. OFAC is also making several technical and conforming edits. In particular, OFAC is correcting a typographical error in section 515.533(d)(2).
  • OFAC is also conforming the language of the general authorization in section 515.559(d) to the corresponding authorization in section 515.533(d).

Federal Register Notice: https://www.gpo.gov/fdsys/pkg/FR-2016-03-16/pdf/2016-06018.pdf

A Few Things That Can Be Exported to Cuba

Tuesday, March 29th, 2016 by Danielle McClellan

By: Danielle McClellan

BIS has released a final rule revising the licensing policy from possible approval on a case-by case-basis to a general policy of approval for exports and reexports of the following to Cuba:

  • Telecommunications items that would improve communications to, from, and among the Cuban people;
  • Certain commodities and software to human rights organizations or to individuals and non-governmental organizations that promote independent activity intended to strengthen civil society in Cuba;
  • Commodities and software to U.S. news bureaus in Cuba whose primary purpose is the gathering and dissemination of news to the general public; and
  • Agricultural items that are outside the scope of “agricultural commodities” as defined in part 772 of the EAR (such as insecticides, pesticides and herbicides) as well as agricultural commodities not eligible for License Exception Agricultural commodities (AGR) (such as those that are specified in an entry on the Commerce Control List, i.e., are not designated EAR99).
  • Items that are necessary to ensure the safety of civil aviation and the safe operation of commercial aircraft engaged in international air transportation, including the export or reexport of such aircraft leased to state-owned enterprises. Given a substantial increase in air travel to and from Cuba, BIS is making the change to emphasize the importance of civil aviation safety and to recognize that access to aircraft used in international air transportation that meet U.S. Federal Aviation Administration and European Aviation Safety Agency operating standards by Cuban state-owned enterprises contributes to that safety.

This rule also amends the exceptions to the general policy of denial by also adopting a case-by-case review policy for exports and reexports of some of the following:

  • Exports and reexports to state-owned enterprises, agencies, and other organizations of the Cuban government that provide goods and services for the use and benefit of the Cuban people.
  • Exports and reexports of items for agricultural production, artistic endeavors (including the creation of public content, historic and cultural works and preservation), education, food processing, disaster preparedness, relief and response, public health and sanitation, residential construction and renovation and public transportation.
  • Exports and reexports of items for use in construction of: facilities for treating public water supplies, facilities for supplying electricity or other energy to the Cuban people, sports and recreation facilities, and other infrastructure that directly benefits the Cuban people.
  • Additionally, it includes exports and reexports to wholesalers and retailers of items for domestic consumption by the Cuban people.

The rule also adds the term “reexport” to the existing statement of a policy of case-by-case review of applications for aircraft or vessels on temporary sojourn to Cuba. Finally, this rule will consolidate the statements of licensing policy for exports and reexports to Cuba (previously the policies were in six different paragraphs spread in different places with inconsistent wording).

Additionally, OFAC released a final rule coordinating with these changes set forth by BIS. OFAC is making amendments to the Cuba Sanctions Regulations with respect to non-agricultural export trade financing and travel and related services:

  • Section 515.533(a) will remove the former limitations on payment and financing terms for all exports from the United States or reexports of 100 percent U.S.-origin items from a third country that are licensed or otherwise authorized by the Department of Commerce, other than exports of agricultural items or commodities. As required by the Trade Sanctions Reform and Export Enhancement Act of 2000, 22 U.S.C. 7207(b)(1), such agricultural exports continue to be authorized only if one of the payment and financing terms specified in the statute are used.
  • Section 515.584 will add an authorization for depository institutions to provide financing for such authorized exports and making a conforming change to section 515.421.
  • Carrier services by air: section 515.572 will be amended to authorize the entry into blocked space, code-sharing, and leasing arrangements to facilitate the provision of carrier services by air authorized pursuant to section 515.572(a)(2), including the entry into such arrangements with a national of Cuba.
  • Temporary sojourn: section 515.533 will be amended to authorize travel-related and other transactions directly incident to the facilitation of the temporary sojourn of aircraft and vessels as authorized by the Department of Commerce for travel between the United States and Cuba, including by certain personnel required for normal operation and service on board a vessel or aircraft or to provide services to a vessel in port or aircraft on the ground.
  • Transactions related to information and informational materials: section 515.545 will be  expand the general license authorizing travel- related and other transactions that are directly incident to the export, import, or transmission of informational materials to include professional media or artistic productions in Cuba. Such productions include media programs (such as movies and television programs), music recordings, and the creation of artworks. OFAC is removing a restriction in an existing general license and explicitly authorizing transactions relating to the creation, dissemination, or artistic or other substantive alteration or enhancement of informational materials, including employment of Cuban nationals and the remittance of royalties or other payments. OFAC also is making a conforming change to section 515.206.
  • Professional meetings: section 515.564 will now authorize travel-related and other transactions to organize professional meetings or conferences in Cuba.
  • Public performances, clinics, workshops, athletic and other competitions, and exhibitions: section 515.567 will now authorize travel-related and other transactions to organize amateur and semi-professional international sports federation competitions and public performances, clinics, workshops, other athletic or non-athletic competitions, and exhibitions in Cuba. OFAC is also removing the existing requirements for certain events that all U.S. profits from the event after costs be donated to an independent nongovernmental organization in Cuba or a U.S.-based charity and that workshops and clinics be organized and run, at least in part, by the authorized traveler.
  • Humanitarian projects: section 515.575 will expand the list of authorized humanitarian projects to include disaster preparedness and response.

BIS Notice: https://www.gpo.gov/fdsys/pkg/FR-2016-01-27/pdf/2016-01557.pdf

OFAC Notice: https://www.gpo.gov/fdsys/pkg/FR-2016-01-27/pdf/2016-01559.pdf

BIS & DDTC Release Another Set of Proposed Rules on Military Aircraft

Tuesday, March 29th, 2016 by Danielle McClellan

By: Danielle McClellan

BIS and Department of State simultaneously released proposed rules based on a review of Categories VII and XIX as well as ECCNs 9A610, 9A619, 9C610, 9C619, and 9E619.

BIS Revisions would be as follows:

Changes to ECCN 9A610

  • This proposed rule would remove text currently in the “Control(s)” table that excludes paragraphs .t, .u, .v and .w from national security controls. Although the text of those paragraphs is taken from the Missile Technology Control Regime Annex, the commodities that they control are unmanned aerial vehicle parts, components or associated equipment that also are subject to category ML10 on the Munitions List of the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies. The addition of the national security controls would not increase the number of destinations to which a license is required for the commodities controlled by these paragraphs as those paragraphs already have missile technology and regional stability controls. …

Changes to ECCN 9A619

  • This rule would make three additions to the “Related Controls” paragraph. The first would state explicitly the historical practice of controlling 501-D22 gas turbine engines in ECCN 9A991.d, which is the classification that has been used for many years. The second would add a reference to USML Category XIX(f) to alert readers that some aircraft parts and components are enumerated in that paragraph. Finally, a note would be added reminding readers that the commodities enumerated in paragraph .y are subject to the controls in that paragraph rather than the broader controls elsewhere in this ECCN. …

Changes to ECCN 9C610

  • ECCN 9C610 would be revised by adding references to USML Category VIII in both the heading and in paragraph .a, to make clear that materials specially designed for commodities enumerated or otherwise described in that category are controlled in ECCN 9C610.

Changes to ECCN 9C619

  • ECCN 9C619 would be revised by adding references to USML Category XIX in both the heading and in paragraph .a, to make clear that materials specially designed for commodities enumerated or otherwise described in that category are controlled in ECCN 9C619.

Change to ECCN 9E619

  • The related controls paragraph in ECCN 9E619 would be amended by removing the sentence that reads “Technology described in ECCN 9E003 is controlled by that ECCN.” Although true, the placement of the sentence in a 600 series ECCN could mislead readers into thinking that the order of review does not apply in this instance.

Comments must be received by BIS by March 25, 2016. You may submit comments by any of the following methods:

  • Federal eRulemaking Portal: http://www.regulations.gov. Search for this rule using its regulations.gov docket number: BIS-2016-0009.
  • By email directly to publiccomments@bis.doc.gov. Include RIN 0694-AG76 in the subject line.
  • By mail or delivery to Regulatory Policy Division, Bureau of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th Street and Pennsylvania Avenue NW., Washington, DC 20230. Refer to RIN 0694-AG76.
  • FOR FURTHER INFORMATION CONTACT: Thomas DeFee or Jeffrey Leitz in the Office of Strategic Industries and Economic Security, Munitions Control Division by telephone at (202) 482-4506 or by email at Thomas.DeFee@bis.doc.gov or Jeffrey.Leitz@bis.doc.gov.

Department of State Revisions would be as follows:

Revision of Category VIII

This proposed rule revises USML Category VIII, covering aircraft and related articles, to describe more precisely the articles warranting control on the USML.

  • Paragraph (a) is revised to clarify that the controls for all paragraphs are applicable “whether manned, unmanned, remotely piloted, or optionally piloted,” by modifying paragraph (a)(5) to clarify the features meriting USML control, and by deleting paragraph (a)(6) and placing it into reserve, because the relevant control would be subsumed by paragraph (a)(5).
  • Paragraphs (a)(7) and (a)(8) are modified to clarify the features meriting USML control.
  • Paragraphs (a)(11) and (a)(13) are deleted and placed into reserve.
  • Paragraph (a)(14) is modified to exclude L-100 aircraft manufactured prior to 2013 from the scope of control.
  • The Note to paragraph (a) is revised to incorporate technical corrections.
  • Paragraph (d) is modified to delete the “ship-based” control parameter and to clarify the intent and scope of the control.
  • Notes 1 and 3 to paragraph (f) are modified to incorporate clarifying language. …

Revision of Category XIX

This proposed rule revises USML Category XIX, covering gas turbine engines and associated equipment, to describe more precisely the articles warranting control on the USML.

  • Paragraph (a) is modified to clarify the scope of controlled engines and to incorporate technical corrections.
  • Paragraph (b) is revised to provide additional technical parameters to clarify the scope of controlled engines. With respect to paragraph (b)(1), public comment is requested on whether any commercial models exceed the capability described in this paragraph. In any public comment submitted in reply to this request, please provide specific examples of the commercial models at issue.
  • Paragraph (c) is modified to incorporate conforming changes and to make clear that the paragraph applies only to gas turbine engines, while paragraph (d) is modified to update the list of subject engines.
  • The Note to paragraph (e) is modified to incorporate a conforming change.

The Department of State will accept comments on this proposed rule until March 25, 2016. Interested parties may submit comments within 45 days of the date of publication by one of the following methods:

  • Email: DDTCPublicComments@state.gov with the subject line, “ITAR Amendment–Categories VIII and XIX.”
  • Internet: At www.regulations.gov, search for this notice by using this rule’s RIN (1400-AD89).
  • Comments received after that date will be considered if feasible, but consideration cannot be assured. Those submitting comments should not include any personally identifying information they do not wish to be made public or information for which a claim of confidentiality is asserted, because those comments and/or transmittal emails will be made available for public inspection and copying after the close of the comment period via the Directorate of Defense Trade Controls Web site at www.pmddtc.state.gov. Parties who wish to comment anonymously may do so by submitting their comments via www.regulations.gov, leaving the fields that would identify the commenter blank and including no identifying information in the comment itself. Comments submitted via www.regulations.gov are immediately available for public inspection.
  • FOR FURTHER INFORMATION CONTACT: Mr. C. Edward Peartree, Director, Office of Defense Trade Controls Policy, Department of State, telephone (202) 663-2792; email DDTCPublicComments@state.gov. ATTN: ITAR Amendment–USML Categories VIII and XIX.

BIS Amends Country Chart and Various Missing Wassenaar Changes

Tuesday, January 19th, 2016 by Danielle McClellan

By: Danielle McClellan

BIS released the following amendments and revisions that were inadvertently omitted from the Wassenaar Arrangement 2014 Plenary Agreements Implementation and Country Policy Amendments. A rule was published on May 21, 2015 but the following revisions were absent in that notice and will be implemented now:

 

  • Supplement No. 1 to Part 738: Commerce Country Chart
    • This rule would remove the X, i.e., license requirement, in the NS:2 Column for South Africa, as well as remove the X in the RS:2 Column for Argentina and South Africa
  • Part 740: Country Groups
    • This rule removes Fiji from Country Group D:5 ‘‘U.S. Arms Embargoed Countries,’’ and from Country Group D in Supplement No. 1 to part 740 of the EAR (This correction is not the result of a Wassenaar Arrangement agreement, but rather of a final rule published by the Department of State on May 29, 2015)
  • Section 743.3: Thermal Imaging Camera Reporting
    • BIS inadvertently removed a thermal imaging camera reporting requirement exemption for Canada in the May 21 rule. The reporting requirements for thermal imaging cameras are corrected by exempting Canada from the reporting requirements, as was the policy prior to the publication of the May 21, 2015, Wassenaar rule. The exception is added to paragraph (b) of § 743.3 of the EAR.
  • Part 772: Definitions
    • This rule removes a reference for ‘‘signal analyzer (dynamic).  .  .’’ that was inadvertently not removed when the definition for ‘‘dynamic signal analyzer’’ was removed from this part.
  • Supplement No. 1 to Part 774: Commerce Control List ECCN 8A620 Submersible Vessels, Oceanographic and Associated Commodities
    • Replaces paragraph .f with a new paragraph containing two subparagraphs: Subparagraph f.1 for self-contained diving rebreathers, closed or semi-closed circuit; and subparagraph f.2 for underwater swimming apparatus ‘‘specially designed’’ for use with equipment specified in paragraph f.1. Paragraph f.1 narrows the scope by adding the ‘‘self- contained’’ parameter, while f.2 is an expansion of controls.
  • ECCN 9A004 Space Launch Vehicles and ‘‘Spacecraft’’
    • The range of reference in the License Requirement Note is corrected to read ‘‘9A004.b through .f.’’ Also, Note 3 in the Related Controls is revised for clarity.
  • 9A010  ‘‘Specially Designed’’ ‘‘Parts,’’ ‘‘Components,’’ Systems and Structures, for Launch Vehicles, Launch Vehicle Propulsion Systems or ‘‘Spacecraft’’
    • The Heading to ECCN 9A010 is corrected by removing the reference to the ITAR for jurisdiction over these items and instead referring to the newly added Related Controls paragraph.

Federal Register Notice: https://www.gpo.gov/fdsys/pkg/FR-2015-12-03/pdf/2015-30253.pdf

BIS Releases Data Portal

Tuesday, January 19th, 2016 by Danielle McClellan

By: Danielle McClellan

Last month BIS launched its Data Portal which will provide access to data related licensing, controlled trade with select countries, ECR and a few more topics (see links below). This is the first time that BIS has made this type of information public, after looking at it, it is basic statistical information. For example, you can see that the percentage of AES Records in Compliance with the EAR has remained at 99% since 2010 or you can see the Statistical Analysis of US Trade with China in 2014. Happy data mining!

The Portal features statistical papers and datasets on:
Exporter Compliance
Controlled Trade with Select Countries
Export Control Reform (ECR)
BIS Licensing
U.S. Defense Industrial Base Analysis

Who creates this information?

The Office of Technology Evaluation (OTE) analyzes U.S. export data from the Census Automated Export System (AES) and BIS license application data to inform export policy decisions.

Our analysis primarily covers dual-use Commerce Control List (CCL) items which have both a civilian and military or proliferation-related end-use. Included are licensed, license exception, and unlicensed export transactions subject to the Export Administration Regulations (EAR). In addition, OTE assesses BIS license applications, including approved, denied and returned determinations.

OTE uses the findings from its analysis to educate industry at AES seminars on proper reporting of items subject to the EAR in the AES.

Have questions or comments?  Send us an email: data@bis.doc.gov.

It Never Pays to Lie…Actually it Could Cost You $50K

Tuesday, January 19th, 2016 by Danielle McClellan

By: Danielle McClellan
On September 14, 2012 GLS Solutions, Inc. of Aventura, Florida exported a $28,335 FLIR 440 High Performance Infrared Camera to Venezuela. The camera is classified under ECCN 6A003.b.4 and is controlled for National Security and Regional Stability reasons. GLS knew that a license was required to export the camera but continued to export it without obtaining a license. GLS has been assessed a penalty of $50,000 for one violation of “Acting with Knowledge of a Violation.” $32,500 of the penalty will be suspended for one year and eventually waived if GLS does not commit and further violations within the one year probationary period.

Gregorio L. Salazar, owner and president of GLS Solutions, was aware of the violation; however, in his initial disclosure letter to BIS regarding the illegal export of the camera he stated he was, “not aware that this camera required approval from United States Government in order to be shipped to Venezuela.” Nearly 6 months later, during a follow-up interview with a BIS Special Agent, Salazar admitted that he knew the licensing requirement for the FLIR camera prior to exporting it to Venezuela and explained that a FLIR Systems, Inc. representative informed him prior to the export that a license was required.  In addition to the penalty on the company, Salazar will pay $50,000 for one charge of providing, “False or Misleading Statement(s) in a Disclosure to BIS.” BIS did not suspend any of Salazar’s fine.

GLS Solutions Charging Letter
Gregorio L. Salazar Charging Letter

Oy, 521! X-Ray Stealth Now EAR Controlled and More Changes on Wing Folding Systems

Friday, December 4th, 2015 by Danielle McClellan

By: Danielle McClellan

Oy, another 521!  On November 16, 2015 BIS added XBS Epoxy System to the List of 0Y521 Series. The Epoxy system is designed to obfuscate critical technology components against X-ray and terahertz microscopy imaging attempts.  This seems to be the stuff that you could spray on that oversized jug of body cream or your Swiss army knife so they would not be detected by airport x-ray machines.  Oy, TSA!

The 0Y521 Series was established in April 2012 for items for which there is no ECCN but that should be controlled for export because they provided at least a significant military or intelligence advantage to the US, or because foreign policy reasons justify its control.  0Y521 controls are temporary controls that allow BIS to impose controls on a temporary basis while it sorts things out—including making sure the controls are justified and attempting to get other countries to impose similar export controls.

This rule classifies XBS Epoxy System (ECCN 0C521) to be controlled for regional stability (RS) Column 1 reasons. The only license exception available for these items is for exports, reexports, and transfers (in-country) made by or consigned to a department or agency of the US Government. The license requirements and policies for ECCN 0Y521 series appear in § 742.6(a)(7) of the EAR.

License applications for this item may be submitted through SNAP–R in accordance with § 748.6 of the EAR. Exporters are directed to include detailed descriptions and technical specifications with the license application, and identify the item as 0C521.

In this rule, BIS has also removed technology and software related to aircraft wing folding systems from the 0Y521 Series List. The following changes have been made:

  • Entries No. 3 0D521 and No. 2 0E521, respectively, in Supplement No. 5 to part 774 are obsolete because, in accordance with procedure established in the April 13, 2012, final rule, the U.S. Government adopted a control through the relevant multilateral regime(s), which determined an appropriate longer-term control over the item. The wing fold system ‘‘software’’ is now controlled by ECCN 9D001, and the ‘‘technology’’ is controlled by ECCN 9E003.j on the CCL

As always, BIS is encouraging you to submit your comments on these changes.  You may submit comments by any of the following methods:

  • Federal eRulemaking Portal: www.regulations.gov. The identification number for this rulemaking is BIS– 2015–0043.
  • By email directly to: publiccomments@bis.doc.gov. Include RIN 0694–AG70 in the subject line.
  • By mail or delivery to Regulatory Policy Division, Bureau of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th Street and Pennsylvania Avenue NW., Washington, DC 20230. Refer to RIN 0694–AG70.

FOR FURTHER INFORMATION CONTACT:

Michael Rithmire, Electronics and Materials Division, Office of National Security and Technology Transfer Controls by phone at (202) 482–6105 or by email at Michael.Rithmire@bis.doc.gov.

BIS Posts Update 2015 Speeches and Presentations

Friday, December 4th, 2015 by Danielle McClellan

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has posted on its website speeches and presentations given at its Update 2015 conference that took place earlier this week in Washington, DC.