House Bill to Revoke BIS Export Control Authority Leaves Questions Unanswered, Law Firm Says

A bill that could move U.S. export control authority from the Commerce Department to the Defense Department reflects a lack of understanding of the export control licensing process and raises a number of questions about the future of U.S. export control regulations, Braumiller Consulting Group said in a recent post. Congress may want to devote more effort to holding Commerce and the Bureau of Industry and Security “accountable” under the Export Control Reform Act “rather than attempting to fix something that is working fine,” said the post, written by Craig McClure, a senior trade adviser with the firm.

House Republicans introduced the bill in October, saying the agency has made “little progress” in controlling emerging and foundational technologies under the ECRA and arguing that BIS’ export control authorities should be revoked and transferred to DOD’s Defense Technology and Security Administration (see 2211010064). McClure pointed to a number of issues with the lawmakers’ bill, including that DOD already has oversight in licensing decisions.

“As trade practitioners know all-too well, once the" Simplified Network Application Process-Redesign "submit button is hit, it has started a process that involves multiple agencies, including DTSA, any one of which can impact the ultimate outcome of the review and delay the final result, leaving the applicant in limbo,” he said. “Again, it seems the sponsors of this bill do not completely understand BIS’s role in the license application review process and have made assumptions that BIS has complete autonomy on the review outcomes, which is not the reality of the process.”

McClure also questions whether the bill’s authors have thought through what would happen to the Export Administration Regulations and the Commerce Control List if export control authority is transferred to DTSA. “Would the EAR be incorporated into the International Traffic in Arms Regulations” or “a new body of export control regulations that combines both? Would the CCL be combined with the US Munitions List? What impact might this have on the US’s obligations to the multilateral export control regimes?”

It’s also unclear if DTSA has “sufficient resources to administer the new export regime,” he said. “The bill proposes that a mere 20% of the BIS budget be transferred to DTSA. The bill also prohibits the transfer of ‘Certain Senior Executive Positions’ but does not appear to prohibit the lower-level BIS staff, specifically the existing licensing officers,” McClure wrote, adding BIS is “actively recruiting for additional staff as their current resources are not adequate. DTSA would likely face the same resource constraints.”

From industry’s perspective, it’s “clear” BIS “has been extremely active in meeting the ECRA requirements,” and a change in authority to a different agency would cause a range of complications. “While there remain gaps, most notably addressing the foundational technology criteria, the impact this bill, if passed, would have on the trade community would be considerable and likely bring U.S. exports to a halt during the transition period, adding additional woes to the U.S. economy,” he said.