AES Option 4, VSDs, Port Visits, Etc. Discussed at RPTAC Meeting
On September 14, 2010, the Bureau of Industry and Security’s Regulations and Procedures Technical Advisory Committee met to discuss a variety of export-related issues, including:
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Census Still Working on Option 4 Rule, No DHS Concurrence Yet
Census continues to work on its revision of the Foreign Trade Regulations which is expected to clarify the FTR, address post-departure filing1 (known as “Option 4”), etc.
Census states that it is still in discussions with U.S. Customs and Border Protection regarding some of their proposed changes, and continues to seek concurrence from DHS on the regulation. Census has already received State Department’s concurrence.
May have limited scope, all would reapply. Regarding Option 4, Census notes that the rule may propose limiting use of Option 4 to certain specified commodities. The rule is also expected state that no companies will be grandfathered into Option 4 and that all current Option 4 filers will need to reapply.
(Census' moratorium on the acceptance of new letters of intent (LOI) to participate in postdeparture filing has been in place since August 2003 and, as a result, postdeparture filing is limited to currently approved USPPIs. See ITT's Online Archives or 08/26/03 news, 03082610, for BP summary on Census' suspension of acceptance of AES postdeparture filing LOIs.)
2010 publication of proposed rule uncertain. Census notes that while they had hoped to issue the proposed rule in 2010, it is not known if that will be possible.
Census Has Completed 2nd Phase of CBP Port Visits, Planning for 3rd Phase
Census has just completed its second phase of port visits with CBP officers. During the second phase, Census visited 13 ports throughout the U.S. to provide CBP officers with training on the FTR. Census is beginning to plan for a third phase of port visits.
Voluntary Self Disclosure Time Frames are Decreasing
A BIS official gave the RPTAC an update on the time frames for BIS’ processing of voluntary self disclosures.
In fiscal year 2009, BIS closed 192 VSDs with an average processing time of one year and five months. In FY 2010, 202 VSDs were closed with an average processing time of one year and four months.
However, BIS notes that since May 2010 (when BIS rearranged the way it handled VSDs by dedicating some BIS headquarters staff to help process and expedite VSDs) 21 VSDs have been closed with an average processing time of six weeks. The official noted that although the 21 closed VSDs were “easy ones” and that the more complicated VSDs are pending, BIS hopes that the May 2010 changes will result in improved processing times for all VSDs.
Most VSDs Result in Warning Letters, Not Sanctions
According to BIS, for FYs 2009 and 2010, approximately 70% of the VSDs were closed with a warning letter, approximately 20% were closed with a letter of no violation being sent, and only approximately 5% of the VSDs were closed with administrative sanctions. The remaining VSDs (approximately 5%) were resolved in another manner (e.g., combined with another case, referred to another agency, etc.).
Wassenaar ECCN 5A002 and 5D002 Changes
The Wassenaar final rule stated that changes agreed to at the December 2009 Wassenaar Plenary that pertain to Export Control Classification Numbers (ECCNs) 5A002 and 5D002 would be implemented in a separate rule. The BIS official notes that although the Wassenaar final rule implied that these changes would be covered in a future rule, they were actually included as part of the encryption interim final rule, which was published in June 2010. BP’s Online Archives have been amended to reflect this new information.
1Postdeparture filing currently provides for the electronic filing of the required data elements for all shipments (other than those for which predeparture filing is specifically required) by all methods of transportation, no later than ten calendar days from the date of exportation.
(See ITT’s Online Archives or 09/10/10, 09/08/10 and 09/09/10 news, 10091013, 10090819 and 10090920, for BP summaries of the Wassenaar final rule.
See ITT’s Online Archives or 06/25/10 and 06/19/10 news, 10062539 and 10062951, for BP summaries of the interim final rule. See ITT’s Online Archives or 07/27/10 news, 10072730, for BP summary of BIS correcting amendment to the encryption interim final rule.)