International Trade Law News

Published by Jacobson Burton Kelley PLLC

Last week the Office of Foreign Assets Control (OFAC) issued its third Biennial Report of Licensing Activities Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) covering the period from October 2004 through September 2006.

The report indicates that during that two year period OFAC received 1,794 applications to export agricultural commodities, medicine and medical devices to Iran and Sudan under the TSRA program and issued 1,104 licenses. The report also indicates that it took OFAC an average of 33.1 business days to issue export licenses during that period. By contrast, the most recent quarterly TSRA report issued by OFAC shows that the average licensing times increased to 80 business days at the end of 2007.

In addition to providing licensing statistics, the report summarizes the public comments that OFAC had requested. According to OFAC, all of the comments expressed concern about the delays in the licensing process. In addition, the commenters mentioned the following other areas of concern:

• Lack of transparency in the interagency review process;
• Non-adherence to the established time guidelines;
• Inconsistency in license application requirements;
• Redundant requests to obtain official EAR99 Commodity Classifications;
• Difficulty in obtaining guidance or clarification concerning the scope of licenses issued;
• Difficulty in obtaining meaningful information concerning the status of pending license applications; and
• Failure to issue required reports to Congress in a timely fashion.

Among the suggestions submitted for improving the licensing procedures were:

• Process and issue one-year TSRA licenses on a more expedited schedule;
• Devote more resources to the license application processing, both at OFAC and at the reviewing agencies;
• Institute a "white list" of approved importers/end-users;
• Develop an internet- or telephone-based automated electronic export licensing application tracking system;
• Institute a priority processing system for agricultural commodities license applications;
• Establish an expedited mechanism for the renewal5 of expired one-year licenses;
• Work with the Commerce Department’s Bureau of Industry and Security (BIS) to have BIS' "Illustrative List of EAR99 Medical Devices" updated;
• Add additional staff to answer exporters’ questions; and
• Send TSRA licenses on a consistent basis via e-mail to applicants

In response to these comments OFAC stated that it will "undertake a review of its licensing procedures to better meet the needs of license applicants" and that "all comments made will be considered in the process of this review."

Labels: OFAC, TSRA