CCL

The Bureau of Industry and Security (BIS) has issued a rule to amend the Export Administration Regulations to make technical corrections and clarifications after a review of the Commerce Control List. The rule will be effective April 18, 2008 and the BIS plans to publish another rule later this year to employ the second phase of corrections.

The rule revises “Related Controls” paragraphs found in the following Export Control Classification Numbers (“ECCNs”) by adding related controls references. BIS has even included related controls references in CCL entries to assist exporters in classifying items on the CCL and in some cases provide cross references for CCL items. Read More

It has been a few months since the US slapped new export/reexport controls on China to attempt to slow the growth of the Chinese defense industry, and thus hamper the growth of Chinese military capability. On October 17, 2007, BIS announced the names of the five new Validated End Users (VEUs) in China. (OK, I admit my prediction that the VEUs would be a long time coming was wrong.)

So, it after hearing a wide range of people talk about the new China military end use license requirement and the VEU program, maybe now is time for me to issue the last word analysis of the new China rules.

For the most part, what does exist today, and what companies must comply with today, is a new approach to restricting certain export/reexport to China that are imposed by the new set of export/reexport restrictions on China.

Let’s look at the details of the new requirements. Read More

Effective September 12, 2007, the Bureau of Industry and Security (BIS) will amend the Export Administration Regulations (EAR) to reflect changes to the “Control List of Biological Agents”. This rule will amend the EAR to reflect the admission of Croatia into the Australia Group and revises the CCL entry which controls equipment that is can be used in handling any type of biological materials. Lastly, the new rule will amend the list of countries that are States Parties to the Chemical Weapons Convention, Barbados will now be joining the party.

More information:

Federal Register Notice

Due to the flagrant and defiant actions of North Korea over the past year relating to missile testing and the detonation of a nuclear device, the United States is imposing new export and reexport controls on North Korea. This new rule is in accordance with UN Security Council Resolution 1718 which prohibits the direct or indirect sale of arms and other specified items to North Korea by UN Member States.

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In what may truly be the most long-anticipated regulatory change in the export control arena, the Census Bureau is finally nearing its goal of mandating use of the Automated Export System (AES) in place of paper Shipper’s Export Declarations (SEDs) across-the-board. AES is already mandatory (since 2003) for the export of items on the United States Munitions List (USML) and the Commerce Control List (CCL), as well as rough diamonds subject to the Kimberly Process. In a February 17, 2005 notice of proposed rulemaking, Census reiterated its intent to extend the AES requirement to cover all exports from the US which currently require a SED. The threshold triggering the need for a SED under the current Census regulations - a value of more than $2,500 classified under an individual Schedule B or Harmonized Tariff Schedule (HTS) commodity classification code - remains unchanged. (After all these years, an adjustment for inflation would be nice.) Exports valued at less than $2,500, but which require either a license from Commerce or a license or license exemption from State will continue to require AES reporting (data submitted via AES is now called “Electronic Export Information” or EEI).

Census solicited feedback with their February proposed rule, which they received in spades from over forty different exporters, carriers, trade associations, and even other federal government agencies. For those seeking to understand every nuance, impact, and possible criticism of the Census proposal, the comments are an excellent resource. (Although, unfortunately, when Census scanned the comments into Adobe Acrobat files they did not turn on the optical character recognition feature which would have made it possible to easily locate references to particular words or phrases.) I particularly recommend the response offered by the Regulations and Procedures Technical Advisory Committee (pdf, RPTAC), which identifies numerous inconsistencies and ambiguities in the Census proposal, and the comments from US Customs and Border Protection (pdf, CBP) which argues that even the very limited exemptions from filing EEI provide an unacceptable loophole for bad actors to exploit. CBP wants all exemptions eliminated, including the sub-$2,500 exclusion.

Census is expected to issue a final rule as early as this month, which will most likely go into effect sometime around the first day of the new year.

No, not for Iraq, that’s another department. I’m talking about BIS, which seems to always be seeking new recruits for its Technical Advisory Committees (TACs). Instead of a buzz cut, M-16A2, and marksmanship training, you will be equipped with a secret-level security clearance, limited-access pass to the Herbert C. Hoover Building, and everyone’s favorite, unreimbursed travel expenses. (Unreimbursed by the feds that is, your employer really should pony up.)

BIS TACs are part of a larger network of committees established under the Federal Advisory Committee Act (FACA). Of the six TACs, five focus on a specific category or categories on the Commerce Control List. These sessions can get highly, um, technical, but are often quite relevant to exporters in the affected industries. Interestingly, none of the TACs seem to cover Category 0 - Nuclear Materials, Facilities, and Equipment (and Miscellaneous Items). Perhaps that’s because much of Category 0 is actually subject to the jurisdiction not of BIS, but of the Nuclear Regulatory Commission which has its own advisory committees. Or maybe the executives of Thumbscrew, Blackjack, and Leg Iron Manufacturers Association are just too busy preparing for their next medieval reenactment to demand their own TAC.

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On July 15, the Bureau of Industry and Security published a massive final rule implementing the decisions made at the December 2004 plenary meeting of the Wassenaar Arrangement. Other Wassenaar participants have already taken similar steps to codify the group’s changes at a national level or will do so in the near future. In addition to the Wassenaar-conforming revisions to Commerce Control List Categories 1-9, BIS also took this opportunity to add or expand some unilateral US controls.

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When BIS first issued its interim rule covering newly-unembargoed Libya on April 29, 2004 the agency requested public comments.  The government response to those comments (pdf) and other perceived shortcomings of the Libya regulations are captured in the final rule promulgated March 22.  The new regulation makes a number of adjustments, but its overall impact is not major for most exporters.  Virtually everything listed on the Commerce Control List (CCL) will continue to require a license for export or reexport to Libya, but there are some significant changes.

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Here is a follow up to our Chip Fixation article: State and Commerce issued Federal Register Notices in which they attempted to resolve the Commodity Jurisdiction (CJ) debacle surrounding an apparently dual use avionics chip that was originally designed for defense use.

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In the December 10, 2003 Federal Register the Commerce Department published a wide range of changes to the Commerce Control List.  The majority of these changes implement the December 2002 agreement by the members of the Wassenaar Arrangement.

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In the September 18, 2003 Federal Register the Commerce Department revised several Export Control Classification Numbers (ECCNs) in the Commerce Control List (CCL). These revisions potentially impact licensing requirements in these ECCNs:

ECCN 1C111: Commerce added new controls on mixed Oxides of Nitrogen

ECCN 7A103: Commerce adds new controls on “integrated navigation systems.” Specifically, the new 7A103 controls are: Integrated Navigation Systems, designed or modified for use in “missiles” and capable of providing a navigational accuracy of 200m Circular Error Probable (CEP) or less.

Technical Note: An “integrated navigation system” typically incorporates the following components:

1. An inertial measurement device (e.g., an attitude and heading reference system, inertial reference unit, or inertial navigation system);
2. One or more external sensors used to update the position and/or velocity, either periodically or continuously throughout the flight (e.g., satellite navigation receiver, radar altimeter, and/or Doppler radar);
3. Integration hardware and software.

Now, as a practical matter, the majority (maybe even all) of integrated navigation systems designed or modified for use in missiles fall under the jurisdiction of the US Munitions List (USML), not the new controls in 7A103. The inclusion of these controls in the CCL may confuse exporters. Instead on speculating on situations where items specially designed or modified for missile might fall under the jurisdiction of the CCL, I will offer practical advice: You can avoid such confusion when you are classifying an item by asking the correct questions in the correct order: First, always determine whether an item is on the USML or the CCL by reading the USML and the International Traffic in Arms Regulations. If determine that your missile navigation system is controlled by the US Munitions List, then you never would take the second step of reading the CCL and running into the perhaps confusing CCL controls on missile integrated navigation systems.

ECCN 9A106: Commerce added new controls on flight control servo valves. Specifically, 9A106 controls:

Flight control servo valves designed or modified for use in “missiles” and designed or modified to operate in a vibration environment of more than 10g RMS over the entire range between 20Hz and 2KHz.

Once again, you may wonder why the CCL controls servo valves designed or modified for use in missiles. Use the same approach to classification discussed above for integrated navigation systems and you may never have to really face this apparent confusing situation.

Commerce also revised these ECCNs to add cross-references and clarifications:

7A005: Cross-reference to 7A105 and 7A994 added.
7A105: Clarification and cross-reference to 7A005 and 7A994 added.
7A994: Clarification.

Commerce also added new definitions of “payload” and “range to Part 772 of the EAR.

Some of the changes are based on the September 2002 agreement by the Missile Technology Control Regime (MTCR) to change the MTCR Annex. The MTCR is a group of many technologically advanced countries and the MTCR Annex is the list of items for which each member country agrees to impose export controls.

On March 5, the Bureau of Industry and Security (BIS) published a large Federal Register Notice implementing Wassenaar changes to the Commerce Control List (CCL). The changes affect numerous Export Commodity Control Number (ECCN) classifications, though most changes appear of little consequence to the aerospace industry. The rule likewise changes some Wassenaar reporting requirements.

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Have you recently cracked open the Commerce Control List (CCL) and done a comprehensive review and analysis of the classification of the products and technologies your company has and exports? Why, you may ask, should you do that. You might be thinking, “All of my hardware is ECCN 9A991 and my tech data falls in 9E991, and doesn’t require a license for any country except Angola, Cuba, Iran, Iraq, Libya, North Korea, Sudan and Syria.” And you just might be correct.

And you just might not be correct. Have you, probably with the assistance of one of your technical experts, taken a close look at Category 2, Category 7 and Category 9? There may be some surprises, especially with the technical data controls. These categories in the CCL include a long list of technical data that requires a license-in many cases the tech data requires a license even though the hardware it is related to does not.

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In the January 3, 2002 Federal Register the Commerce Department published a wide range of changes to the Commerce Control List (CCL). These revisions to the CCL implement changes agreed by the Wassenaar Arrangement, an 30+ country agreement on multilateral export controls. The changes effect all of the CCL Categories except 0 and 8. The changes include clarifications of existing controls and substantive changes to the existing controls.

The following is a quick rundown of the highlights of the changes most likely to impact aerospace companies. You should review the specific changes for yourself to see how they actually impact the controls on your hardware, software and technical data.

• Category 2: Revisions to controls on bearings, machine tools, machine tool software, and coating technology (2E003).
• Category 3: Assorted clarifications, extensive changes to controls on electronic components (3A001), added controls on silicon carbide,.
• Category 5: Removed controls on software for recovering source code of certain telecomm software.
• Category 6: Assorted clarifications, revised controls on instrumentation cameras and lasers and certain software.
• Category 7: Revised 7A001 to apply to linear accelerometers and 7A002 to apply to angular or rotational a accelerometers.
• Category 9: Assorted clarifications and removed controls on overhaul technology for gas turbine engines (9E003.a).

Most people will probably forever remember where they were the morning of September 11. Export control diehards, I am almost embarrassed to admit, were to be found at the Regulations and Procedures Technical Advisory Committee (RAPTAC) meeting at the Commerce Department a block from the White House. The meeting started promptly at 9:00 am, with members blissfully ignorant of happenings in New York and the Pentagon.

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