The Bureau of Industry and Security is issuing a technical correction to the Export Administration Regulations and clarifying its rules that cover releases of certain software, the agency said in a final rule issued last week. The rule, effective Sept. 18, clarifies an “ambiguity” in the EAR and notes that releases of software include both source code and object code “for purposes of transfer of access information.” The change will “eliminate potential uncertainty that the § 734.15 definition of 'release' limits § 734.19 to only controlling transfers of access information that release source code, rather than both source code and object code,” BIS said.
Republicans are asking the Biden administration to strengthen export controls against Huawei and Semiconductor Manufacturing International Company after Huawei this month unveiled a new smartphone that may have been made through means that violated U.S. export restrictions (see 2309120005). They said both technology companies should be subject to “full blocking sanctions” and their executives should face criminal investigations, adding that the Commerce Department should revoke all of their existing license applications, add all their subsidiaries to the Entity List and take other measures to cut off a broad range of shipments to both firms.
The Bureau of Industry and Security this week corrected a temporary denial order against an Arizona resident to fix her home address. The order, issued in April, suspended Katie O’Brien's export privileges but mistakenly listed an Arizona address for another person with the same name. The agency had suspended O’Brien’s privileges for 10 years after she was convicted of making false statements or “misrepresentations” to the U.S. government during an investigation and for smuggling firearms to Mexico (see 2304170020).
The Bureau of Industry and Security should explore several changes to the Export Administration Regulations to better prevent exported technologies from being used for human rights violations, including by maintaining a regularly updated list of EAR99 items that are likely to be misused by authoritarian regimes, said Annie Boyajian, vice president for policy and advocacy for Freedom House. Boyajian also suggested BIS engage more with civil society groups, including by creating a formal mechanism that would allow those groups to inform the agency about new ways technologies are being misused.
The Bureau of Industry and Security is still “developing” a rule that will expand the agency’s restrictions on certain activities that support foreign military, security or intelligence services, Hillary Hess, the agency’s regulatory policy director, said during a Sept. 12 Regulations and Procedures Technical Advisory Committee meeting. The rule, hailed by one lawmaker as the “largest expansion of presidential export control authority in several years,” will implement a provision in the FY 2023 defense spending bill that will allow BIS to expand its U.S. persons controls to capture certain sensitive services to foreign intelligence agencies (see 2212210032).
The Bureau of Industry and Security’s top export enforcement official this week urged customs brokers, forwarders and non-vessel operating common carriers to be more proactive in export compliance even though they may not always have the “primary” responsibility for ensuring goods comply with U.S. export licensing restrictions. Matthew Axelrod, the BIS assistant secretary for export enforcement, said those service providers should take steps to ensure they have maximum visibility into their clients and the goods they are shipping.
The Bureau of Industry and Security last week suspended the export privileges of one person for illegally exporting dual-use technology to Libya and three others for illegally exporting weapons to Mexico or Ecuador.
A new House bill introduced last week could help facilitate exports of “high-performance” computers and other equipment to India. The Technology Exports to India Act, introduced by Reps. Gregory Meeks, D-N.Y., and Andy Barr, R-Ky., would remove certain restrictions on the sale of U.S. digital computers and electronic assemblies to India, the lawmakers said. The bill comes as the U.S. tries to convince India to rescind its recently announced import restrictions on computers and various electronics (see 2308170028).
The Bureau of Industry and Security is drafting a proposed rule that could make “enhancements” to and simplify License Exception Strategic Trade Authorization, which authorizes certain exports to trusted U.S. allies if the foreign importer certifies that they won’t reexport the item outside a list of STA countries. BIS sent the rule for interagency review Sept. 8. The agency has said it wants more exporters to use the license exception, which could help expedite certain exports and reduce workload for the government (see 2209280042).
Suspicious activity reports recently filed with the U.S. government show nearly $1 billion worth of transactions over the last year may have had ties to Russia-related export control evasion, the Financial Crimes Enforcement Network said in a new report analyzing SAR trend data. The report -- issued as part of a joint effort between FinCen and the Bureau of Industry and Security to collect more leads for export enforcement agents -- highlights several evasion trends being reported by banks and other financial institutions, including what types of goods are most commonly being sought by sanctions evaders and which foreign countries those transactions most frequently involve.