BIS Publishes China Rule Comments
Today the Bureau of Industry and Security (BIS) published on its website the public comments submitted on the proposed rule on export and reexport controls for the People's Republic of China (commonly, but incorrectly, referred to as the "China Catch-All Rule"). BIS received 55 comments from a wide variety of individuals, companies, associations and organizations. The comments, which run more than 900 pages in length, can be found at the following link: efoia.bis.doc.gov. Be careful when opening and viewing the file in your browser, as the PDF file is very large (approximately 77 MB). Our proposed rule on China export controls derives from very fundamental tenets of U.S. foreign policy. For more than three decades across seven presidential administrations, the United States has sought to encourage legitimate civilian trade with China. That remains our policy, and the China rule will have the effect of helping to facilitate and streamline legitimate civilian exports, even as we prudently hedge against the rapid, double-digit growth in China’s military capabilities.
Not surprisingly, most of the comments were critical of many aspects of the proposed rule. A large number of commenters stated that many products included in the 47 ECCNs that would be prohibited from being sold to military end-users in China are readily available in the global marketplace. In fact, many of the commenters provided specific information on products falling within the 47 ECCNs that are currently produced in or available in China (be sure to see the Cross Sector Report of the American Chamber of Commerce-PRC at page 109 of the PDF file). Many of the comments expressed skepticism on the utility of the Validated End-User Authorization and the problems associated with obtaining PRC End-User Certificates from MOFCOM.
It appears, however, that the large number of critical comments from industry are unlikely to cause BIS to withdraw the proposed rule. In a recent speech to the Washington International Trade Association, Christopher A. Padilla, Assistant Secretary of Commerce for Export Administration, stated that BIS will "carefully review and consider the comments we received, and the reaction of our European and Asian allies, and factor all of this into our decisions on how to finalize and implement our new export control policies for China." While Assistant Secretary Padilla mentioned that "there may be some changes to the original proposal" he categorically stated that "scrapping the rule is simply not in the cards." He noted that:
He also stated that BIS does "not believe the new rule imposes an unbearable burden on business" and mentioned that the VEU program "will liberalize more U.S. exports than the military end-use controls will prohibit."
While no specific timetable has been announced for issuing the final rule, BIS officials anticipate that the final rule will be issued some time in 2007.
Labels: BIS, Export Controls
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