News & Noteworthy

Crunch Time for Export Control Compliance

Posted by Rick Phipps on Oct 29, 2015 4:45:24 PM

There is a confluence of export control activities in Washington, D.C.  The Society for International Affairs (SIA) recently completed their fall compliance conference earlier this week and the annual "Update" conference held by the Department of Commerce's Bureau of Industry and Security (BIS) is from November 2, 2015 until November 4, 2015. In addition, the State Department's Directorate of Defense Trade Controls (DDTC) recently announced that they are extending the timeline for the transition of items from the U.S. Munitions List (USML) to the Commerce Control List (CCL) as part of the Export Control Reform (ECR) initiative.

Athough extensions have been granted for obtaining licenses for your transitioning items from the Commerce Department, consider the fact that the deadline is when your new license must be in place, not when your application must be submitted. For that reason, it would be wise to start the licensing process sooner than later, as BIS will inevitably be swamped by applications from those companies who are late to the game.

Commodity classification is Job #1. Executives first need to know whether their products and technologies are subject to the International Traffic in Arms Regulations (ITAR) under the the jurisdiction of the Directorate of Defense Trade Controls (DDTC) or subject to the Export Administration Regulations (EAR) under the jurisdiction of BIS. Then you must determine whether the specific classifications of the items are enumerated on either the U.S. Munitions List (USML) or the Commerce Control List (CCL).

All other decisions flow from this initial determination, including the need for, or release from, various licensing and compliance requirements.  For this critical reason, CTP classification experts have seen an increase in classification and documentation requests, either directly from clients or from legal referrals that lack the technical staff to handle large scale classification projects. 

While ECR should ease the administrative burdens for many companies in the long run, there is definitely a learning curve and a little heartburn for exporters unfamiliar with the ways of BIS.  Aside from navigating the complexities of the CCL, exporters have to learn and comply with the EAR and gain familiarity with the licensing procedures of SNAP-R. In addressing these regulatory matters, as with classification, our experience with BIS has attracted the same steady rise of client requests.

We look forward to seeing our clients and friends next week in Booth #1 at BIS Update 2015.  Until then, we want to leave you with a useful graphic that summarizes the status of various ECR changes, notably when the various category rule transition periods come to an end.  

Timeline of Export Control Reforms (ECR)

Topics: Private