International Trade Law News

Published by Jacobson Burton Kelley PLLC

Today is the first day of the Bureau of Industry's 25th annual Update Conference on Export Controls and Policy. Here is a summary of our live tweets (twitter.com/tradelawnews) from day 1:

• Annual BIS export controls Update starts today in DC. More than 1000 attendees. Will live tweet over next few day. Hashtag #BISUpdate 

• For those not able to attend Update, materials and webcasts are available on BIS's website. See http://t.co/UpJUEu0a for details.

• First speaker - BIS Undersecretary Hirschhorn stressed need for exporters to stay engaged on export control reform (ECR). As part of Export Control Reform (ECR), first 38(f) notifications on transfer of items from USML to CCL will take place later this year. Future issues to be reviewed by BIS include cloud computing, deemed exports, CCL review, recordkeeping, etc. 

• Next speaker- Asst Secy of State Andrew Shapiro. ECR intended to prioritize controls, not decontrol items. Will lead to better enforcement. 

• Asst Secy Shapiro - "speculation that ECR is stalled is false". Momentum not being lost. Results of hard work on ECR are in reach. 

• Next speaker- Asst Secretary Wolf who has played key role in ECR. While ECR appears to be slow, actually moving quickly when looking at big picture. ECR will make export controls understandable by "Muggles." 

• USML Cat XI (electronics) likely to be published in coming weeks. Here is some information from on the record press briefing by senior BIS and State Dept officials at Update. BIS would like to issue changes to encryption rule in future. Other future changes to regs include cloud computing. Regarding 38(f) process, working closely with Congress and have made changes as a result. Concerned about various amendments to pending legislation on satellites that could have adverse impact on ECR. Hope that satellite legislation can be taken up this year. E2C2 export enforcement coordination center up and running. 

• Update breakout sessions on sanctions, AES, control list changes and end use monitoring. Many of the presentations can be found on the BIS website at http://www.bis.doc.gov/seminarsandtraining/update2012/presentations.htm 

• OFAC participated with BIS on sanctions panel and clarified some points on new Burmese general licenses. Also answered questions on various sanctions programs and licensing issues. OFAC clarified that the new reporting requirement in Burma GL applies to investments greater than $500,000 only and not sales over that amount. OFAC also stated that average processing time for Iran TSRA Ag/Med licenses is 3 months. No real downturn in applications of TSRA applications due to Iran payment issues. also, BIS reiterated importance of reviewing both OFAC and BIS regs due to overlap of jurisdiction in some programs. 

• Regarding press reports re Apple products being denied for Iranians in US, OFAC said that OFAC regs are not discriminatory but that an OFAC license is required when controlled good are exported to Iran. 

• Keynote speaker today is Acting Secretary of Commerce Dr. Rebecca Blank. Acting Secretary of Commerce Blank discussing National Export Initiative and other economic issues relating to exports, including new free trade agreements. Mentioned importance of repealing Jackson-Vanik and permanent MFN for Russia. Promoted current export control reform efforts and reiterated that ECR is not decontrol. Noted herculean efforts made so far in ECR and that no other administration has got this far. Hopes to have some final changes from USML to CCL published by end of year. 

• Export enforcement panel VERY well attended. Discussing IED components concerns and continued focus on enforcement involving China and Iran. Pakistan still an illegal procurer and discussed joint OEE and FBI investigation efforts in procurement networks. Also discussed trends in voluntary self disclosures. Noted only 3% of VSDs led to penalties. Will be 20% increase in enforcement outreach efforts. 

• DDTC and BIS panel discussing details on implementing ECR. All 600 series items must be reported in AES, regardless of value. Post departure AES filing not eligible for 600 series. Special destination statement required for 600 series items. BIS expects 30K increase in licenses. BIS information triage unit is reviewing legitimacy of exports. Enhanced data sharing with DDTC and end use monitoring. DDTC and BIS panel discussing details on implementing ECR.

• RT @CommerceSec: just finished with my remarks at the Conference on Export Controls Policy, hosted by our Bureau of Industry and Security. 

• Head of DDTC export compliance now discussing enforcement issues related to defense articles. Discussing end use checks, export license due diligence, red flags. 

•  Information and updates on export control reform can be found at http://export.gov/ecr

Labels: BIS Update Conference