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Complying with U.S. Export Controls. Bureau of Industry and Security Department of Commerce. Bureau of Industry and Security Department of Commerce. John Bushnell July 25, 2013 QUE Group 2013 Conference, San Diego, CA. Our Contact Information. - PowerPoint PPT Presentation
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Bureau of Industry and Security Department of Commerce
Complying with U.S. Export Controls
Bureau of Industry and Security Department of Commerce
John BushnellJuly 25, 2013QUE Group 2013 Conference, San Diego, CA
Our Contact InformationBureau of Industry and Security
Western Regional Office2302 Martin Street, Suite 330
Irvine, California 92612T: 1-949-660-0144F: 1-949-660-9347
Northern California Branch160 West Santa Clara Street, Suite 725
San Jose, California 95113T: 1-408-998-8806F: 1-408-998-8677
www.bis.doc.gov
BIS Mission StatementTo advance U.S. national security,
foreign policy, and economic objectivesby ensuring an effective export control
and treaty compliance system and promoting continued U.S. strategic
technology leadership
Overview
Transactions we control
BIS regulates “exports” and“reexports” of “items” “subject to theEAR” in addition to certain activities of
U.S. persons.
Authority to Administer Controls Export Administration Act
(EAA)
International Emergency Economic Powers Act (IEEPA)
Export Administration Regulations (EAR)
EAR
BIS
Reasons Why We Control Exports National Security Foreign Policy
• Crime control• Anti-terrorism• Regional Stability
Non Proliferation• Nuclear weapons• Chemical/biological weapons• Missiles
Multilateral Export Control Regimes Wassenaar Arrangement
• Supplement 1 to Part 743• www.wassenaar.org/
Missile Technology Control Regime (MTCR)• Supplement 1 to Part 740 (A:2)• www.mtcr.info/
Nuclear Suppliers Group (NSG)• Supplement 1 to Part 740 (A:4)• www.nuclearsuppliersgroup.org/
Australia Group (AG)• Supplement 1 to Part 740 (A:3)• www.australiagroup.net
Export Administration Regulations Designed to implement the Export
Administration Act Apply to commercial and some military
items• Items that can be used in both commercial
and military/strategic applications• Also apply to items that have solely civil uses• Other agencies have jurisdiction over some
exports
How do I determine my regulatory requirements?
Depends upon:1. What is the product?2. Where is the product going?3. Who is the end user?4. What is the end use?
End use concerns Nuclear
• Section 744.2 Chemical/Biological Weapons
• Section 744.3 Missile
• Section 744.4 Support of these activities by a U.S.
Person• Section 744.6
What is an Item?(Section 734.2)
Commodity Software Technical Data
What is an export? A shipment out of the United States An electronic transmission out of the
United States Release of technology to a foreign
national in the United States• Technology – specific information
necessary for the “development”, “production”, or “use” of a product
Definitions and Terms
What is a Reexport? A shipment of a U.S. origin item from one
foreign country to another
A shipment of a foreign produced item containing U.S. origin parts, from one foreign country to another
Shipment from one foreign country to another of an item manufactured abroad based on U.S. origin technology
Who is the Exporter?(Part 772)
The person in the United States who has the authority of a principal party in interest to determine and control the sending of items out of the United States.
IMPORTANT CONCEPT:
Having an Export Control Classification Number (ECCN) does NOT
automatically mean that a license is required to all destinations
Being classified as EAR99 does NOT automatically mean that a license is
NOT required to a particular destination
Are You Subject to the EAR?(Continued)
U.S. Persons & Foreign Nationals
Certain activities of U.S. persons (Part 744)
Release of certain technology and source code to foreign nationals in the U.S. (“Deemed Exports” (Part 734))
Deemed Exports (Section 734.2(b)(2)(ii))
The release of technology or source code subject to the EAR to a foreign
national in the United States is “deemed” to be an export to the
home country of the foreign national.
Deemed Exports (Section 734.2(b)(2)(ii))
Situations that can involve release of U.S technology or software include: Tours of laboratories Foreign national employees involved in certain research, development, and manufacturing activities Foreign students or scholars conducting research Hosting of foreign scientist
Deemed Exports (Section 734.2(b)(2)(ii))
Export Enforcement Note
Deemed Export violations are one of the most common types of violations
Because the violation typically occurs in the U.S. and all parties are typically in the U.S., this is very
often the easiest to prove in a court of law.
Exempted from the Rule(Section 734.2(b)(2)(ii))
Any foreign national is subject to the deemed export rule except:• A person granted U.S. citizenship;• A person granted permanent
residence status (i.e., “Green Card” holders);
• A person granted status as a “protected individual” under 8 U.S.C. 1324b(a)(3)
What Kind of Authorization is Required to Export?
NO LICENSE REQUIRED (NLR)
LICENSE EXCEPTION
LICENSE or
VEU
ON LINE ACCESSBIS home page
www.bis.doc.gov
E-mail notifications (Seminars, Regulatory changes, etc.)
SNAP-R (Online Licensing and other requests)
Commerce Control List&
Country Chart
Commerce Control List(Part 738 and Part 774, Supplement No. 1)
Contains lists of items subject to licensing authority of BIS
Each entry is called Export Control Classification Number (ECCN)• Five alpha-numeric characters
Items listed in terms of technical parameters
ECCN Structure(Section 738.2)
3A001
Category
Product Group
Reason for Control
Sequential Numbering
Ten Categories in the CCL (0 to 4)
0. Nuclear Materials, Facilities & Equipment and Miscellaneous
1. Materials, Chemicals, Microorganisms & Toxins
2. Materials Processing3. Electronics Design, Development and
Production4. Computers
e.g.: 3A001
Ten Categories in the CCL(5 to 9)
5. Telecommunications (PART 1) and Information Security (PART 2)6. Sensors and Lasers7. Navigation and Avionics8. Marine9. Propulsion Systems, Space Vehicles and
Related Equipmente.g.: 5A001
ECCN Structure- Product Groups
5A101 5B101 5C101
5D101 5E101
Equipment, assemblies & components
Test, inspection & production equipment
Software Technology
Materials
Finding Your ECCN Check the Commerce
Control List (CCL) alphabetic index
Review general characteristics of item to arrive at Category and Product Group
Match characteristics of item with ECCN and subparagraph CCLBIS
Classification Request Requirements (Section 748.3)
Use SNAP-R the BIS online request system (discussed in detail later)
Identify specific items of concern
Attach Detailed Technical Specifications as a .pdf
Working with the Country Chart (Part 738, Supplement No. 1)
Contains licensing requirements based on destination and reason for control
Used with the CCL to determine if you need a license
DEGREE OF
CONCERN
REASON FOR
CONTROL
PDFVERSION
E-CFR VERSION******
EASIER TO READ WITH TWO
WINDOWS OPEN
Using the Commerce Control List with the Country Chart
Determine ECCN Check reasons for control Match specific controls to country chart
column• If a territory, possession, or department of a
foreign country is not listed on the country chart, the export or reexport is deemed to be an export to the foreign country of which it is a territory, etc.
Is there an “X” in the box under that specific Reason for Control?? If so, there is a license requirement.
EAR99If an item subject to the EAR is NOT
described by any ECCN, it is designated EAR99.
In most cases, the export of an EAR99 item can be completed using the license
authorization NLR (No License Required), but …
Check the General Prohibitions AND the “Lists to Check” for other possible
licensing requirements.
TEN GENERAL PROHIBITIONS
Part 736
DESCRIBE EXPORTS, REEXPORTS AND CONDUCT IN WHICH YOU MAY NOT
ENGAGE WITHOUT A LICENSE, LICENSE EXCEPTION (IF AVAILABLE
AND APPLICABLE) OR A DETERMINATION THAT A LICENSE IS
NOT REQUIRED.
Ten General ProhibitionsPart 736
General Prohibitions 1-10 apply to items having a specific ECCN
General Prohibitions 4-10 apply to items that are EAR99
FACTORS DETERMININGLICENSE REQUIREMENTS
1. WHAT IS THE PRODUCT?2. WHERE IS THE PRODUCT GOING?3. WHO IS THE END USER?4. WHAT IS THE END-USE?
LICENSE EXCEPTIONS
Part 740
Important ConceptsAfter determining “License Requirements,”
determine if there is an available mechanism for OVERCOMING
that requirement.
This potential mechanism is called a License Exception.
License ExceptionsPart 740
Definition: An authorization that allows you to export or reexport, under stated conditions, items subject to the EAR that would otherwise require a license.
Each license exception bears a three letter symbol used for export clearance purposes.
Can You Use a License Exception?
Review general restrictions (Section 740.2) Identify all applicable License Exception(s)
• List based and transaction based• Use least restrictive exception that is
available Each “X” (license requirement) must be
overcome
Strategic Trade Authorization July 2011 through December 2012 105 companies have exported under
STA 1,231 shipments under STA
! 41% (500) exports worth less than $2,500 $146.2 million worth of exports under
STA
Strategic Trade Authorization
Top STA product categories (ECCNs) Optical sighting devices (0A987) Cameras (6A003) Components for the International Space
Station (9A004) Non-fluorinated polymeric substances
(1C008) Electronic components (3A001)
Strategic Trade Authorization
Strategic Trade Authorization: STA (Section 740.20)
Authorizes the immediate export, reexport or transfer of most items to 36 specified countries AND the immediate export, reexport or transfer of many items to 8 additional countries.
Specifically excludes certain reasons for control AND certain specified ECCN’s in Categories 0, 1 and 9.
Review ALL individual ECCN entries for additional restrictions.
36 STA-Eligible CountriesMultiple Reasons for Control
NS, CB, NP, RS, CC, SINorwayPolandPortugalRomaniaSlovakiaSloveniaSouth KoreaSpainSwedenSwitzerlandTurkeyUnited Kingdom
GermanyGreeceHungaryIcelandIrelandItalyJapanLatviaLithuaniaLuxembourgNetherlandsNew Zealand
ArgentinaAustraliaAustriaBelgium,BulgariaCanadaCroatiaCzech RepublicDenmarkEstoniaFinlandFrance
8 STA-Eligible CountriesReasons for Control
NS ONLY
MaltaSingaporeSouth AfricaTaiwan
AlbaniaHong KongIndiaIsrael
For assistance with Encryption matters please contact the
BIS Encryption Hotline 1-202-482-0707
49
Join us tomorrow as the Journey Continues.