BIS Introduces Congressional Notification Requirement for Certain Gun Exports
The Bureau of Industry and Security soon will introduce a congressional notification requirement for certain firearm exports, the agency said in a final rule. The change, effective July 18, will add a new section to the Export Administration Regulations that will require congressional reporting for certain semiautomatic firearms shipments valued at $4 million or more and destined to certain countries. The requirement will apply to certain guns whose export control authority was transferred from the State Department to the Commerce Department in 2020 (see 2001170030).
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Under the rule, BIS will notify Congress of all exports of semiautomatic firearms controlled under Export Control Classification Number 0A501.a and valued at $4 million or more. BIS said the notification is “warranted” because of the “unique nature” of the guns and because they were previously controlled under the State Department’s International Traffic in Arms Regulations. The guns are “often used by military and law enforcement personnel,” BIS said, and can also be used recreationally.
The agency stressed that the reporting requirement will not always apply, including “if the total value of the application is valued at $4 million or more but contains 0A501.a semiautomatic firearms valued at less than $4 million.” Exports are also exempt from the notification requirement if they are for U.S. government agencies under License Exception GOV or if they are for the official use of an agency of the North Atlantic Treaty Organization.
The reporting requirement will also not apply if the shipment is destined to Australia, Canada, India and other nations in Country Group A:5 or A:6, excluding Mexico, South Africa and Turkey. BIS said it’s exempting a “group of allied countries” from the requirement because the firearms are “less sensitive” than the fully automatic firearms that are still controlled by the State Department.
BIS also said it’s using a “different scope” for its congressional notification requirement than the State Department, which reports certain weapons sales to Congress worth $1 million or more. Under the EAR, BIS said exporters make a “good faith estimate” of the number and value of exports that will be needed over the standard four-year validity period of a BIS license, which may cover multiple purchase orders. But under the ITAR, DSP-5 licenses are usually “tied to a single purchase order,” BIS said.
“To account for these differences, BIS is using $4 million as the value for the congressional notification requirement,” which is equal to the “annual average of $1 million in potential exports per year during the validity period of the license,” the agency said. “Essentially, the value threshold” will be “four times the value of the ITAR’s value threshold” to account for the difference in licensing requirements.
The agency also stressed that the notification requirement won’t change the interagency license review process for the guns or how applicants apply for BIS licenses. Exporters should continue to apply for export applications but shouldn’t break up their contract values to evade the congressional notification requirement and slide under the $4 million threshold, BIS said. “Any activity intended to circumvent notification requirements is prohibited,” the agency said. Applicants should also be able to identify where the guns will be sent, their end-use and other parties in the transaction.
Although BIS said it doesn’t expect any change in the number of license applications it will receive and said applicants are “required to follow the same process they were previously,” exporters may need to include additional information if their shipment meets the notification requirement and are subject to a signed purchase order. In those cases, the applicant will need to include a copy of the signed contract or order. If the export doesn’t include a signed contract, the exporter will need to submit a “written explanation,” BIS said. The agency added that all exports will need a “statement of the value of the semiautomatic firearms,” and the applicant may need to “clearly identify the semiautomatic firearms controlled by ECCN 0A501.a.”
The agency stressed that the “vast majority” of firearm exports require a BIS license. It also said the “likelihood” that a 0A501.a firearm is exported in the “limited quantity required under the license exceptions described above” -- including License Exception BAG, License Exception TMP or License Exception RPL -- “and meeting or exceeding the $4 million threshold would be extremely unlikely.” That would occur only if each gun “was valued at a very high rate or there was some type of unusual circumstance,” BIS said, such as in cases where a U.S. firearms manufacturer needed to return all the firearms in a defective product line for warranty work.
All exports, reexports and transfers removed from license exception eligibility due to this rule that were aboard a carrier to a port as of July 18 may proceed to their destinations under the previous eligibility, BIS said. Only license applications received on or after July 18 may be subject to the new congressional notification requirement.
Sen. Bob Menendez, D-N.J. -- who has repeatedly criticized the 2020 transfer of export control authority over certain firearms from the State Department to Commerce -- didn't respond to a request for comment. Menendez has urged Commerce to follow through on President Joe Biden’s campaign promise to reverse the rule (see 2204010006), saying the transfer created less oversight of firearms exports, partly because it eliminated their congressional notification requirement.