BIS Mines AES Data for Exporters of Interest, to Increase Penalties if Weak Compliance Programs
On August 31, 2010, at the Bureau of Industry and Security's Annual Export Controls Update Conference, BIS Under Secretary Eric Hirshorn issued prepared remarks on BIS’s planned enforcement and education efforts, which include the following details:
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
(Two other high level Commerce Department officials spoke about the Administration’s export control reform efforts. See ITT’s Online Archives or 08/31/10 news, 10083113, for BP summary of President Obama’s conference remarks via videotape on export control reform.)
BIS is Mining AES Data to Identify SME and Other Exporters of Interest
Every exporter must classify its exports and should screen its customers against such lists as the Denied Persons List and the Entity List. BIS has a responsibility to assist exporters, particularly small and medium-sized businesses, to do this. To that end, BIS is mining Automated Export System data to identify exporters of interest. BIS is also working with other bureaus and agencies, and with such private sector entities as freight forwarders, to educate exporters.
BIS to Closely Review AES Transactions for Exporter Compliance
BIS will closely scrutinize AES transactions to ensure that exporters are complying with the Export Administration Regulations (EAR). BIS may require foreign consignees to provide end-use assurances against diversion and similar undertakings from, or at least notification to, subsequent purchasers. It will be stepping up outreach, domestically and abroad.
BIS to Continue to Work with CBP and Census on New AES Tools
BIS continues to work with the Census Bureau and Customs and Border Protection (CBP) on new electronic tools to help exporters make timely and accurate submissions to AES. This will expedite the clearance of exports and facilitate BIS compliance reviews.
Increased Penalty Efforts for Weak Compliance Programs
BIS recognizes that even companies who have good intentions can make mistakes. BIS has long have promoted the submission of voluntary self-disclosures (VSDs) in these and other instances. BIS views VSDs, along with internal compliance programs, as important mitigating factors.
Where appropriate, BIS will seek to minimize penalties for companies that have good internal compliance programs and make demonstrably unintentional errors. However, BIS is planning increased efforts against individuals who flout the rules and against companies whose inadequate internal compliance programs indicate that they are indifferent to whether they follow the rules.
BIS Has Enhanced Enforcement Authority due to Recent Law
The new Comprehensive Iran Sanctions, Accountability, and Divestment Act conferred permanent law enforcement authorities on BIS export enforcement agents for the first time. This enhances BIS’ ability to deter and prosecute violators of the EAR.
(See ITT’ s Online Archives or 06/30/10 news, 10063049, for BP summary of the Iranian provisions in this measure.)
Administrative Enforcement, Licensing Would be Under 1 Agency
The Obama Administration is preparing legislation that would combine the administrative enforcement and licensing activities of BIS, the State Department’s Directorate of Defense Trade Controls (DDTC), and the Treasury Department’s Office of Foreign Assets Control (OFAC) into an independent licensing agency. The Administration will seek action on this legislation in the near future.
Criminal Enforcement Would Transfer to ICE
The Administration also plans to seek legislation to transfer BIS’s criminal enforcement functions to Immigration and Customs Enforcement (ICE), which would have a separate unit dedicated to enforcement of the export control and embargo laws.
Coordination Network Helps BIS Share Information with ICE, Etc.
To ensure coordination with other enforcement agencies, BIS participates in the National Export Enforcement Coordination Network. Working with colleagues from the Federal Bureau of Investigation, military security agencies, Immigration and Customs Enforcement, and the Intelligence Community, BIS is sharing information and leveraging resources. In addition, the President will soon issue an executive order making this coordination center permanent. The order will mandate participation by all relevant law enforcement agencies and the intelligence community.
(Remarks by Commerce Secretary Locke (available here) largely echoes Obama’s videotaped remarks, while Assistant Secretary for Export Administration Kevin Wolf’s remarks expanded on aspects of the President’s remarks and will be summarized in a future issue of ITT.)