BIS Annual Report Outlining 2008 Export Licensing and Enforcement Initiatives
The Bureau of Industry and Security has posted to its Web site a report summarizing its activities during fiscal year 2008. Highlights of this report include the following.
Licensing. BIS processed 21,293 export license applications worth approximately $72.1 billion, a 9% increase from FY 2007 and the highest number of applications reviewed in 15 years. Over the past decade, the number of export license applications has steadily increased, nearly doubling since 2000.
BIS approved 17,945 license applications (84%), returned 3,171 without action (15%) and denied 177 (less than 1%). The average license application processing time was lowered from 28 days to 27 days.
China was the destination for the largest number of approved license applications. BIS approved 1,990 license applications for exports to China valued at more than $2.7 billion; 25% of these were for deemed export licenses to release controlled technology or source code to Chinese nationals working in U.S. companies and universities. The average processing time for all approved licenses to China was 33 days, down 12% from FY 2007.
During calendar year 2007, U.S. companies exported $2.8 billion of licensed items (of which 11.8% were exported under a special comprehensive license) and $14.2 billion of items under a license exception, representing 0.2% and 1.2%, respectively, of overall U.S. trade.
Classification. In order to ascertain whether an export license is required from BIS, an exporter needs to classify the item to be exported by determining the Export Control Classification Number and may request an official classification. BIS processed 6,629 classification request applications in an average of 33 days.
Commodity Jurisdiction. A commodity jurisdiction request is used to determine whether an item or service is subject to the export licensing authority of the Department of Commerce or the Department of State. BIS processed 539 CJ requests in an average of 37 days.
Encryption. BIS processed 3,396 technical review requests for encryption items, including 627 requests for reviews of "mass market" encryption items. Most items submitted for review became eligible for export as "ENC Unrestricted" or "mass market" encryption commodities and software eligible for export and re-export without a license to both government and non-government end-users in most countries.
BIS also approved approximately 2,320 license applications for the export or re-export of restricted encryption products (such as high-end routers and other network infrastructure equipment) and technology outside the U.S. and Canada to non-sanctioned end-users outside Country Group E:1.
Enforcement. BIS investigations resulted in the criminal conviction of 40 individuals and businesses for export violations with penalties totaling more than $2.7 million in criminal fines, over $800,000 in forfeitures and over 218 months of imprisonment. This compares to 16 convictions and over $25.3 million in criminal fines in FY 2007.
BIS investigations also resulted in the completion of 56 administrative cases against individuals and businesses and over $3.6 million in administrative penalties, as compared to 75 cases and over $6 million in penalties in FY 2007. Of these, six cases involved antiboycott violations that resulted in penalties of $162,450, down from 10 cases and $194,500 in penalties the previous year.
End-use checks play a preventive enforcement role in confirming the bona fides of end-users, ensuring that items will be or have been properly used as authorized and that license conditions are adhered to. BIS completed 490 end-use checks in over 50 different countries, including 151 pre-license checks and 339 post-shipment verifications. BIS completed a significant number of other preventive enforcement actions as well, including 181 warning letters, 104 detentions, 20 seizures, temporary denial orders against nine individuals and 19 companies; the renewal of TDOs against 11 individuals and 19 companies, related-persons orders against four individuals, and five denials under Section 11(h) of the Export Administration Act (which authorizes denial of export privileges of parties convicted under certain federal statutes).