Export Reform & Option 4 Discussed at RPTAC Meeting

BIS Seeks Input on Export Control Terms and Concepts

One BIS official is seeking Committee input on achieving one of the goals of the Administration’s export control reform efforts -- the harmonization of export controls and the creation of a single export control list. The official notes that BIS’ Export Administration Regulations, the State Department’s International Traffic in Arms Regulations (ITAR) and Treasury’s Office of Foreign Assets Control (OFAC) sanctions regulations are all based on different structures, with different philosophies, etc.

As part of that harmonization, the official asked RTPAC to provide input on how various terms and concepts in the EAR, ITAR, and OFAC regulations such as software; public domain; defense services, defense activities; accessories, end items, goods; U.S. person, foreign person; consignee, end-user, contractor; de minimis; specially designed; etc. could be harmonized. Officials note that BIS staff is also working on this project.

BIS and RPTAC suggestions would be submitted to the Export Control Reform Task Force. The BIS official stated that they hope to have input ready for submission by August 2010.

Separate effort to harmonize export IT systems. The BIS official noted that a separate group is working to address the issue of moving to a unified information technology system, noting for example that State Department’s D-Trade and BIS’ SNAP-R are very different ways for the trade to interact with the government on exports.

(See ITT’s Online Archives or 04/21/10 news, 10042125, for BP summary of the Administration’s reform plans for U.S. export controls.)

Census Moving Forward with Rulemaking on Option 4, Etc.

According to a Census official, Census is moving forward with its proposed rule to revise the Foreign Trade Regulations (FTR) by clarifying the FTR, addressing post-departure filing¹ (Option 4), etc. The official stated that they have State Department concurrence on the proposed rule and are working to address comments received from the Department of Homeland Security.

When the FTR proposed rule is published, it is expected to have at least a 60 day comment period. Census notes some of the changes in the proposed rule will require programming changes which will have to be made before Census can publish a final rule.

During the discussion of the proposed rule, the Census official noted that no one will be grandfathered into Option 4, all current Option 4 participants will have to re-apply. (Census notes that a schedule for shutting down the old Option 4 program and beginning the new Option 4 program is expected to be developed after the proposed rule is published.)

(Census’ moratorium on the acceptance of new letters of intent (LOI) to participate in postdeparture filing has been in place since August 2003 and, as a result, postdeparture filing is limited to currently approved USPPIs. See ITT’s Online Archives or 08/26/03 news, 03082610, for BP summary on Census’ suspension of acceptance of AES postdeparture filing LOIs.)

BIS Updates on Upcoming Rulemakings

During an update on BIS rulemakings, officials provided a brief update on upcoming regulations.

Intercompany transfer rule “on hold.” In response to a question on the status of BIS’ intercompany transfer proposed rule, BIS officials admit that the rulemaking is one of several things that are caught up in the higher level reform efforts and are not sure where the proposed rule will fit into the Administration’s export control reform plans.

(In October 2008, BIS had proposed to establish a new license exception entitled "Intra-Company Transfer" (ICT) to allow an approved parent company and its approved wholly-owned or controlled in fact entities to export, reexport, or transfer (in-country) many items on the Commerce Control List (CCL) among themselves for internal company use without individual export license. See ITT's Online Archives or 10/06/08 news, 08100630, for complete BP summary of the proposed rule.)

Rest of 2009 entity list review changes to be published soon. BIS expects to publish another notice soon which will contain the second half of the 2009 annual review entity list changes by the End-Use Review Committee. (BIS published a notice on May 28, 2010 containing the first half of the 2009 annual review changes. See ITT’s Online Archives or 05/28/10 news, 10052829, for BP summary of the first BIS entity list notice.)

Encryption rulemaking expected soon. BIS expects to soon publish a rulemaking on encryption.

2009 Wassenaar Arrangement notice under inter-agency review. BIS notice implementing the changes resulting from the 2009 Wassenaar Arrangement Plenary Meeting is currently undergoing interagency review.

Census Continues to Train CBP Officers at Ports on AES, Etc.

According to Census officials, Census has been conducting training for CBP officers at several ports on AES, the FTR, etc. and is expected to continue that effort in the future at additional ports. Census officials have been to about ten ports so far, and are expected to visit an additional five ports. During the course of this training, Census has been able to address certain trade concerns with CBP officers at particular ports.

Census to Conduct AES Compliance Program Visits in August/September

Census will be making its next company visits as part of the AES Compliance Program in late August/September 2010. Under the AES Compliance Program, Census visits companies that have an AES reporting compliance rate of 95% or less.

Census Has Rebuilt AESDirect Daily Log into EEI Manager Report System

In response to a question on the status of Census efforts to allow companies to retrieve data on exports by Employer Identification Number (EIN), Census officials note that they have tried various avenues for providing this functionality (including working with U.S. Customs and Border Protection (CBP) to use the Automated Commercial Environment), but have been unsuccessful.

As an alternative, Census officials state that they have rebuilt the Daily Log functionality in AESDirect into a new and improved system called EEI Manager Report System.

¹Postdeparture filing currently provides for the electronic filing of the required data elements for all shipments (other than those for which predeparture filing is required) by all methods of transportation, no later than ten calendar days from the date of exportation.