The Census Bureau has seen a large “spike” in voluntary disclosures during the past few years, with some officials handling 10 at a time, a Commerce Department official said during the Bureau of Industry and Security's annual update conference June 29. The official said disclosures increased at the start of the COVID-19 pandemic and have remained high since but are just starting to return to normal levels. “My staff was like, … 'Oh, my God. I have like 10 I’m processing.’ Everybody was processing 10,” the official said, speaking on background under a conference policy for certain career personnel.
The Bureau of Industry and Security has been receiving “a lot” of questions about what is considered a “major component” under the agency’s foreign direct product rule, a Commerce Department official said. Some exporters have asked BIS to issue a list of examples of major components for the purposes of the FDP rule, the official said, which restricts certain foreign-produced items when they are produced by a plant or by a “major component” of a plant that is a direct product of certain U.S. technology or software.
The State Department’s Directorate of Defense Trade Controls is preparing to publish several new export control rules, including one that will request feedback on U.S. Munitions List categories and another that will consolidate exemptions under the International Traffic in Arms Regulations. DDTC is also starting to review a more complex set of Ukraine-related export licenses after moving through some of the more straightforward applications earlier this year.
The Bureau of Industry and Security on June 30 announced several policy changes designed to strengthen its administrative enforcement tools and penalties. Under the changes, outlined at the agency’s annual update conference by Matthew Axelrod, the agency’s top enforcement official, BIS will raise penalties for more serious violations; revise its policies surrounding its no-admit, no-deny settlements; begin offering settlement agreements that don’t include fines; and revise how the agency processes voluntary disclosures.
The Bureau of Industry and Security made an editorial correction to its rule this week that added 36 companies to the Entity List (see 2206280056). The correction is “non-substantive” and is “intended only to aid in codification.”
The Bureau of Industry and Security doesn’t have export control officers in Russia but has other means to monitor violations and to assess license applications, said Matthew Axelrod, the agency’s top export enforcement official. Although BIS can’t conduct end-use checks in the country, it can still turn to “open source reporting” and other intelligence when considering a license, Axelrod said. “We have a lot of different tools at our disposal to help inform the licensing process,” he said during a June 29 news conference.
The Bureau of Industry and Security this week announced a new initiative to improve the agency’s outreach to universities. The plan, outlined in a June 28 memo to export enforcement officials, is aimed at prioritizing outreach at universities that have an “elevated risk profile” and bolstering export control training at those schools. BIS also plans to assign dedicated agents to certain schools and conduct more “background briefings” with researchers on national security and technology risks.
The U.S. needs to create some type of outbound investment screening regime, Bureau of Industry and Security Undersecretary Alan Extevez said, adding that the agency is working with Capitol Hill to shape how a regime would work. A bipartisan group of lawmakers proposed a bill this month that would create an outbound screening tool (see 2206140048), and Estevez said the Commerce Department and other agencies are “obviously providing opinions” to lawmakers.
Although the U.S. and allies are discussing creating a new multilateral export control framework, it’s too soon to tell whether those talks will result in a formal regime, said Alan Estevez, undersecretary of the Bureau of Industry and Security. He said the group of countries has “momentum” toward a new framework, but they haven’t yet agreed to establish a formal organization to replace some of the existing multilateral regimes, such as the Wassenaar Arrangement.
The U.S. this week announced a host of new sanctions targeting Russia’s defense industrial base, including export restrictions against entities helping Moscow evade U.S. export controls and new financial sanctions targeting state-owned companies. The sanctions target more than 100 entities and 50 people supporting Russia’s defense industry and add 36 entities to the Commerce Department’s Entity List, including six for supporting Russia’s military.