BIS Unveils Export Control Changes, Proposals to Lower Licensing Burden, Align With Allies

The final and proposed changes, outlined in three separate rules released Dec. 7, update or seek to update BIS regulations to “more accurately reflect the current national security and foreign policy posture” of the U.S. government, BIS Undersecretary Alan Estevez said. He said they will help in “reducing the licensing burden” on U.S. exporters trading certain dual-use goods with “our closest allies and partners.”

The agency made the changes after receiving “feedback” from U.S. trading partners, who have pushed the U.S. to better harmonize its controls with those of other countries, added BIS official Thea Kendler, including those in the multilateral Australia Group (AG) and the nations that make up the Global Export Control Coalition, which was formed to coordinate controls against Russia.

The changes announced this week “reflect the deep trust and close export control coordination that the United States has fostered with allies and partners for years,” said Kendler, the agency’s assistant secretary for export administration. That effort has “redoubled” since Russia invaded Ukraine last year, she said.

Australia Group and Crime Control-Related Changes

One final rule, effective Dec. 8, removes the license requirement for certain AG countries that covers certain AG-controlled pathogens and toxins, along with their “related technologies,” unless that item is also subject to Chemical Weapons Convention controls, BIS said. The change is warranted because all of those member countries have “an effective export control system capable of regulating dual-use exports in a manner consistent with U.S. national security,” the agency said.

BIS also pointed out that it approved about 1,000 of those license applications to AG countries in 2021 and denied none. “BIS estimates that it is alleviating a burden of approximately 1,000 license applications per year,” the agency said. It expects the change -- which impacts Export Control Classification Numbers 1C351, 1C353, 1C354, 1E001 and 1E351 -- to free up resources “for applications involving higher-risk destinations.”

The rule also removes certain crime-control export licensing requirements for Austria, Finland, Ireland, Liechtenstein, South Korea, Sweden and Switzerland, which are all part of the Global Export Control Coalition. Certain crime-control detection equipment, technology and software no longer will need a license to be exported to those nations, which reflects “these seven countries’ status as close United States allies and partners,” BIS said. It also said all seven countries “have strong records regarding the safeguarding of civil liberties and individual freedoms and upholding other democratic norms.”

The change will revise the Commerce Country Chart entries for Austria, Finland, Ireland, Liechtenstein, South Korea, Sweden and Switzerland to reflect that the license is no longer needed. The agency said it approved about 200 of those licenses to those countries in 2021 and denied none.

Missile Technology-Related Controls

Another final rule, also effective Dec. 8, allows more countries to benefit from license exceptions for certain missile technology items, including components used to make civil manned aircraft. Among several changes, certain components used to produce those aircraft now will be eligible for a license exception to countries that are in both Country Group A:2 and the Global Export Control Coalition. The exception eligibility doesn’t apply to any “countries of concern for missile technology reasons” or that are subject to a U.S. arms embargo, including nations listed in Country Groups D:4 or D:5.

BIS said these changes will “better harmonize the availability of license exceptions” for these items with exceptions available “for other items of similar sensitivity” under the Export Administration Regulations. It also said the changes will “ease the burden on exporters” and allow BIS and other agencies that review license applications to focus on licenses “that warrant individual reviews through the license review process.”

The rule also makes other changes to U.S. export control regulations to align with recent decisions made by the multilateral Missile Technology Control Regime. Many of the revisions are “editorial corrections” to ECCNs for “consistency” with the MTCR, BIS said.

All exports that now require a license as a result of this rule but were aboard a carrier to a port as of Dec. 8 may proceed to their destinations under the previous eligibility as long as the items are exported before Jan. 8, BIS said.

License Exception STA Proposals

The last rule proposes several changes to License Exception STA and seeks public comments on ways to push more exporters to use the exception, which authorizes certain exports to trusted U.S. allies if the foreign importer certifies that they won’t reexport the item outside a list of STA countries. BIS officials previously have called on more exporters to use the exception, saying it could reduce workload for the government and allow certain exports to move faster (see 2209280042).

The agency is proposing to clarify that License Exception STA is “not a list-based license exception” and revise wording to make it “more explicit” that the exception can be used for deemed exports, which usually require companies to apply for a license before sharing a controlled item, software or technology with a foreign person on U.S. soil if a license would normally be required for the person's country.

Other proposals would “adopt a simpler and consistent approach” to identifying the ECCNs eligible for the license exception and remove the “limitation on the use” of the exception for reexports between certain U.S. allies.

The rule includes a table that outlines the advantages of License Exception STA over a traditional BIS license. The table notes that STA has “no limitation” on the quantity and dollar value authorized under the transaction, and that it can “be used the same day you determine an authorization is needed” as opposed to the average BIS licensing time of 40 days. It also said certain items received under License Exception STA may be transferred within a country without the parties needing another BIS authorization, as opposed to a traditional license, which typically states the item may only be transferred “as authorized under” the language of the license.

As part of the proposed changes, BIS is asking for public feedback on whether any other items should be eligible for the exception that aren’t and whether certain items should be removed from STA eligibility. It's also asking for a list of factors contributing to the “apparent reluctance” of exporters or consignees to use the exception.

BIS is also asking whether changes should be made to the information required for STA’s prior consignee statement, whether any other changes would better convince exporters to use the exception, and what would be the “anticipated effects” of requiring exporters to use License Exception STA if their shipments are eligible.

Comments are due Feb. 6.