BIS Withdraws ANPR on Changing "Deemed Export" Regulations
The Bureau of Industry and Security (BIS) has issued a notice announcing that it is withdrawing the advance notice of proposed rulemaking (ANPR) in which it identified certain recommendations made by the Department of Commerce's Office of Inspector General (OIG) to revise the existing requirements and policies for deemed export licensing in 15 CFR Parts 734 and 772.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
According to BIS, it is not adopting the recommendations made in the OIG's report entitled, Deemed Export Controls May Not Stop the Transfer of Sensitive Technology to Foreign Nationals in the U.S., which would have required regulatory changes to the Export Administration Regulations (EAR) because it has determined that its current requirements are appropriate.
(See ITT's Online Archives or 10/18/04 news, 04101825, for BP summary of, among other things, the OIG's report.)
BIS Determines Current Licensing Requirement Based on Country of Citizenship or Permanent Residency is Appropriate
One of the OIG's recommendations which the ANPR considered involves BIS basing the requirement for a deemed export license on a foreign national's country of birth rather than the current practice of basing the requirement on the county of citizenship or permanent residency. BIS states that almost without exception, the comments received in response to the ANPR expressed clear opposition to this policy change.
BIS has determined that the current licensing requirement based upon a foreign national's country of citizenship or permanent residency is appropriate. The current deemed export licensing policy, based on a foreign national's most recent country of citizenship or permanent residency, recognizes the significance of declarative assertion of affiliation over the mere geographical circumstances of birth.
BIS Will Not Amend Definition of "Use" Based on OIG Recommendations
The OIG also recommended that BIS consider revising the definition of "use" in 15 CFR 772.1 to read:
"Use." (All Categories and General Technology Note) - operation, installation (including on-site installation) maintenance (checking), repair, overhaul, or refurbishing.
In the current regulations, the term "use" is defined as: operation, installation (including on-site installation), maintenance (checking), repair, overhaul, and refurbishing."
Public comments voiced general opposition to the OIG's recommended definition because revising the definition with the disjunctive "or" would capture too many routine operations carried out by students/employees and thus constitute a large (and generally unnecessary) compliance burden on organizations.
As such, BIS has concluded that changing "and" to "or" in the definition would lead to a situation in which mere operation of a controlled item by a foreign national could trigger the requirement for a deemed export license. Consequently, BIS has determined that the revision would result in an expansion of deemed export license applications imposing a substantial licensing burden on the regulated community, without a corresponding benefit to national security. Thus, the definition of "use" remains unchanged.
Newly Created Deemed Export Advisory Committee to Review Policies
In its notice withdrawing the ANPR, BIS states that all comments received in response to the ANPR will be made available to the newly formed Deemed Export Advisory Committee (DEAC). BIS notes that all aspects of the deemed export policy will be subject to review by DEAC. (See ITT's Online Archives or 05/25/06 news, 06052505, for BP summary of the creation of DEAC.)
See BIS' notice for additional details of comments received regarding regulatory guidance related to fundamental research, etc.
(See ITT's Online Archives or 03/29/05 news, 05032925, for BP summary of BIS' ANPR concerning the OIG's recommendations.)
BIS Contact - Alexander Lopes (202) 482-4875
BIS Notice (D/N 050316075-6122-03, FR Pub 05/31/06) available athttp://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/E6-8370.pdf