The Directorate of Defense Trade Controls issued a series of frequently asked questions on May 11 to clarify an International Traffic in Arms Regulations exemption that authorizes exports and other activities made by or for a U.S. government agency.
The Commerce and State Department should improve export control guidance for universities, which sometimes struggle to comply with U.S. export regulations because of unclear guidance that is usually tailored toward industry, the Government Accountability Office said May 12. The GAO also said Defense Department officials should better familiarize themselves with export control regulations in order to not hamper university research efforts.
Export Compliance Daily is providing readers with some of the top stories for April 27 - May 1 in case you missed them.
The Commerce Department’s new export restrictions on military end-users may significantly raise due diligence requirements for industry, leading to licensing delays and a burdensome vetting process for technology companies, law firms said. If Commerce's Bureau of Industry and Security does not clarify the scope of the rule to limit its impact, the rules are likely to damage the semiconductor, telecommunications and aircraft sectors, the law firms said. “This could have a detrimental impact on a broad swath of U.S. industry,” Baker McKenzie said in an April 30 blog post. “A universe of transactions triggering license requirements could significantly increase.”
Some companies are concerned about the possibility of the Commerce Department issuing major export control actions during the COVID-19 pandemic, which they say will compound economic hardships caused by the mitigation response to the highly contagious disease. In interviews, industry officials said they are unsure about their ability to manage sweeping regulatory changes even as they acknowledge that a moratorium on export control actions is unlikely.
The Commerce Department Bureau of Industry and Security is still planning to hold its annual conference in Washington, D.C., this summer, and officially opened registration for the event on April 30. BIS said it is “closely monitoring” COVID-19 updates and will notify industry of any changes to the June 29-July 1 conference. The conference's agenda includes sessions on license exceptions, semiconductors, end-use checks, updates on export controls, export enforcement and more.
Export license applications may be delayed during the COVID-19 pandemic as the Commerce Department prioritizes COVID-19-related applications, a top Commerce official said. Not all government agencies have remote access to Commerce’s unclassified system for license applications, which is also causing longer processing times, said Matt Borman, Commerce’s deputy assistant secretary for export administration.
The COVID-19 pandemic is causing “significant disruption” for the Wassenaar Arrangement, leading to the cancelation of at least one meeting and creating uncertainty about whether the group can remotely vote on new export controls, two Commerce Department officials said. Wassenaar was forced to cancel its April Experts Group meeting -- which normally addresses issues related to its lists of controlled items -- and is unsure if global travel restrictions will force cancellations of future meetings in June and its annual plenary session in December.
The Commerce Department Bureau of Industry and Security is working on guidance to help industry comply with the expanded licensing requirements for exports to China announced earlier this week (see 2004270027). The guidance will address new restrictions on exports intended for military users and uses, said Matt Borman, Commerce deputy assistant secretary for export administration. The rule expands the definition for military end-use and will cover military end-users in China, placing more of a compliance burden on industry.
The Commerce Department is considering restricting the number of destination countries that are authorized to receive certain U.S. re-exports that are controlled for national security reasons, the agency said in a notice. The proposed rule would amend the license exception for Additional Permissive Reexports (APR) by removing nations in Country Group D:1, including China, from being eligible to receive those re-exports, Commerce said. The rule would remove APR license eligibility from more than 20 countries. Comments are due June 29.