Export Control System Front-and-Center
A new rule has been implemented by the Department of Commerce to update and harmonize internationally the dual-use export control list. This rule will bring the U.S. in-line with recent changes to an international arrangement. Meanwhile, legislation has been introduced in the House by Howard Berman (D-Calif.), the Ranking Member on the House Foreign Affairs Committee, which is likely to be the first of several bills to update the U.S. dual-use export control system.
The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) maintains, as part of the agency’s Export Administration Regulations (EAR), the Commerce Control List (CCL), which identifies items subject to U.S. export controls under the jurisdiction of the Department of Commerce.
In the May 20 Federal Register, BIS published a Final Rule that revises the CCL to implement changes made to the Wassenaar Arrangement’s List of Dual-Use Goods and Technologies (Wassenaar List) maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (Wassenaar Arrangement, or WA) in December 2010.
The WA was approved back in 1996 by the U.S. and thirty-three other countries working to establish a new multilateral export control arrangement. The WA advocates the implementation of effective export controls on strategic items with the objective of improving regional and international security and stability. Participating countries commit to exchanging information on exports of dual use goods and technologies to non-participating states for the purposes of enhancing transparency and assisting in developing a common understanding of the risks associated with the transfers of these items.
A list of participating countries is available here.
To harmonize U.S. regulations with the changes made to the Wassenaar List at the December WA Plenary meeting, the Commerce Department has released a Final Rule to the EAR that amends the entries on the Commerce Control List that are controlled for national security reasons in Categories 1, 2, 3, 4, 5 Parts I & II, 6, 7, 8, and 9, revises reporting requirements, and adds and amends definitions in the EAR.
The final rule is available here.
On May 26, Rep. Howard Berman (D-Calif.), the Ranking Member on the House Foreign Affairs Committee introduced what is expected to be the first of several bills to update the U.S. dual-use export control system. Measures such as this piece of legislation are necessary because the Export Administration Act of 1979 (EAA), the last major export control bill enacted by Congress, lapsed in August 2001 and the Export Administration Regulations have remained in effect as a result of successive presidents invoking the International Emergency Economic Powers Act (IEEPA).
Berman’s bill, the Technology Security and Antiboycott Act, would repeal the EAA and replace the authority in that law with a new statutory proposal that reflects the numerous technological advances and global changes that have occurred since 1979. Some of the key aspects of the bill include:
- Provides the President with authority to deploy controls to counteract current and future national security threats, including rogue governments, terrorist organizations, and other non-state actors that seek to attack the U.S. and its allies.
- Modernizes the definition of “national security” to include sustaining U.S. leadership in science, manufacturing and our high-tech workforce, and requires the President to balance traditional security goals with maintaining U.S. academic and manufacturing leadership in applying controls.
- Updates the definition of “dual-use” to include capable of being used in terrorist or cyber attacks.
- Establishes a process for regular review of the Commerce Control List to ensure that new items are adequately controlled and that the levels of control of items on the lists are adjusted as conditions change.
- Requires control lists to be published in a form that facilitates compliance by small and medium sized businesses and academic institutions.
- Retains IEEPA penalty structure of maximum criminal penalties of $1 million or 20 years in prison and maximum civil penalties of $250,000 or twice the amount that the basis of the violation.
- Civil penalties for export violations would be based on seriousness of the violation, culpability of the violator and violator’s record of cooperation with the government.
- Provides that penalties for export and antiboycott violations would be subject to judicial review.
- Requires the publication of “best practices” guidelines to assist persons in developing and implementing, on a voluntary basis, effective export control programs.
- Provides that implementation of an effective export compliance program should be mitigating factors in civil penalty cases.
- Requires civil aircraft parts certified by the Federal Aviation Administration to be subject to dual-use controls under the Technology Security Act and not the International Traffic in Arms Regulations (ITAR).
- Establishes the Transfer Policy Committee, a high-level interagency management group responsibility for overall administration, rule-making and oversight of export controls.
- Reenacts provisions authorizing the antiboycott authority and non-proliferation (missile and chemical and biological) functions of the U.S. government.
Rep. Ileana Ros-Lehtinen (R-Fl.), the Chairwoman of the House Foreign Affairs Committee indicated at a May 12, export control hearing that she plans to introduce a bill that would authorize a short-term extension of the lapsed Export Administration Act that also would include other provisions to “help enable Congress and the Administration to tackle together the critical changes necessary to strengthen our national security, while advancing commercial interests.”