News From Day 2 of Update 2008
Assistant Secretary of Commerce for Export Administration Christopher R. Wall announced at Update 2008 today that the long awaited de minimis rule, the first of five soon to be published regulations, will be published in tomorrow's Federal Register.
The de minimis rule, which will be published as an interim final rule and therefore effective upon publication, represents the first changes to de minimis calculations since 1996. The de minimis rule is important to non-U.S. companies, as it determines whether a foreign-made item that incorporates controlled U.S.-origin items will be subject to U.S. export controls.
Specifically, the de minimis rule, amends the Export Administration Regulations (EAR) in the following ways:
- Changes the de minimis calculation for foreign produced hardware that is bundled with U.S.-origin software.
- Clarifies the definition of "incorporate" as it is applied to the de minimis rules and to the medical statement of understanding.
- Removes the requirement to submit a one time report to BIS for foreign-made software that incorporates U.S.-origin software.
- Revises the “Steps for Using the EAR” and General Prohibition Two with regard to the de minimis rules in order to reduce redundancies in the EAR and harmonize the provisions with other revisions made by the rule.
- Intra-Company Transfer license exception (ICT)
- Revision of license exception ENC;
- Implementation of the December 2007 Wassenaar Arrangement Plenary Agreement;
- Final rule to implement the Protocol Additional to the Agreement Between the United States of America and the International Atomic Energy Agency (IAEA) for the Application of Safeguards in the United States of America (known as the "Additional Protocol'').