BIS Expected to Soon Finalize Updated 'Best Practices' for Preventing Dual-Use Diversion
At the Bureau of Industry and Security’s 2011 Update Conference, officials discussed BIS’ plans to finalize an updated list of “best practices” for industry regarding the transit, transshipment, and reexport of dual-use items in order to prevent diversion. A final version of the updated list is expected to be issued soon.
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(BIS’ original list of “best practices” was posted in November 2003. BIS has been working to refine and revise the list to help ensure that industry and the government continue to prevent diversion of controlled items subject to the Export Administration Regulations through transshipment points.)
BIS Published Proposed Update to List of “Best Practices” in September 2010
In September 2010, BIS sought public comments on a proposed update to its list of “best practices” for industry regarding the prevention of transshipment diversion, which included:
- Pay heightened attention to red flags;
- Seek to use only trade facilitators/freight forwarders who observe these best practices and possess an export management & compliance program;
- Know the foreign customer and whether they are a trading company or distributor;
- Inquire about end-users and re-exports;
- Inquire about suspicious routed export transactions (for freight forwarders);
- Communicate the ECCN or EAR99 to the ultimate consignee or end-user; and
- Communicate the ECCN or EAR99 classification to the freight forwarder and in AES for all items.
(See ITT’s Online Archives or 09/01/10 news, 11090120, for BP summary of BIS’ request for comments on its proposed update to its list of “best practices.”)
Most Comments Received on Knowing Foreign Customers, End-Users, Etc.
BIS has revised the proposed update to its “best practices” list based on comments it received in response to its September 2010 notice. According to officials, BIS received the most comments on the “best practices” related to knowing the foreign customer and inquiring about end-users and re-exports (#3 and #4 above). These same “best practices” were also discussed in detail by the industry at the Update Conference.