37th Annual BIS Update Conference
Daily Breakdown

Open Plenary

The Bureau of Industry and Security (BIS) commenced its 37th annual conference with an opening plenary session on defining the strategic trade and technology security landscape and administration priorities. The session emphasized BIS’s crucial role in safeguarding US and allied interests, and acknowledged the US’s entrepreneurial spirit in technology, focusing on artificial intelligence and quantum computing.

The plenary also highlighted the threat posed by the People’s Republic of China’s (PRC) attempts to indigenize advanced chip production. It urged industry players to align with US interests, preventing US technology from bolstering the PRC’s military ambitions. The overarching message called for industry and allies to collaborate in upholding “freedom, liberty, and the western way of life.”

Biotechnology Controls

The session began by emphasizing the significance of the Chemical Weapons Convention (CWC) and the Biological Weapons Convention (BWC), as well as the importance of treaty compliance. The speakers explained how multilateral export control regimes, such as the Australia Group, align with US interests, such as compliance with international arms control and nonproliferation of weapons of mass destruction.

The presentation also noted the dual use nature of certain toxins, for example Saxitoxin and Ricin, which can be used for both medical/research purposes, as well as for chemical weapons. This highlighted the importance of regulating such toxins. As a result, ECCNs: 1C351, 1C353, 1C354, and related 1E001 and 1E351 were moved from Chemical and Biological Weapons 1 (CB1) to Chemical and Biological Weapons 2 (CB2) (with the exception of saxitoxin and ricin). Additionally, global license requirements for all Australia Group (AG) controlled items were harmonized, and no license is required for AG members.

In conclusion, the session highlighted the importance of interagency cooperation with the Department of Defense, Department of State, and other agencies to combat WMD threats.

Updates on Semiconductor Manufacturing Equipment

This breakout session covered key updates on semiconductor manufacturing equipment controls, including new red flags, extraterritorial controls under De Minimis and the Foreign Direct Product Rules, the Footnote 5 rule, and the C&C (Correction and Clarification) rule. The C&C rule split a license exception into two within §740.8. New policies address “grey zone” chips (ECCN 3A090.b not advanced chips, just below the threshold) and enhanced end use/user controls. A notable change requires resolving red flag #27 via an advisory opinion, enabling more precise facility-based evaluations.

A Department of Commerce speaker clarified that a 0% De Minimis value means a calculation was performed and resulted in zero percent. However, “ineligible” means no calculation could be made, and De Minimis rules do not apply to your item. The key takeaway: ineligible does not equal 0%.

Open Plenary Day 2: 

The second day of the BIS conference featured a plenary with U.S. allies—the EU, Japan, and the Republic of Korea (ROK)—discussing efforts to prevent technology diversion. Japan emphasized the risks of emerging technology and the need for stronger cooperation, focusing on semiconductor controls and preventing technology diversion. ROK, the U.S.’s 6th largest trade partner, highlighted countering North Korea’s missile threats, securing critical technologies, and enforcing export controls with criminal penalties. ROK concluded by saying that the “best enforcement comes from the best collaboration.” The EU echoed the importance of alignment and collaboration, reinforcing the shared goal of protecting sensitive technologies.

KYC Resources

The Know Your Customer session emphasized identifying and addressing red flags rather than ignoring them. Screening end users before shipments is crucial, using tools like the Consolidated Screening List (a free screening tool shared by Department of Commerce, State and Treasury) and Google Earth for verifying addresses. A speaker from the Department of Commerce used an online dating analogy to stress due diligence—if something seems off, ask more questions. Key red flags include reluctance to share information and mismatched purchases. Employees should follow clear procedures, seek guidance, and ensure proper training to prevent diversion. Higher-risk items require extra scrutiny, especially when shipped to sensitive regions.

AUKUS

The AUKUS breakout session covered key EAR and ITAR updates supporting the security partnership between Australia, the UK, and the U.S. Representatives from all three nations discussed key changes. From the US side and under the EAR, it included the removal of National Security 1 (NS1), Regional Stability 1 (RS1), and Missile Technology 1 (MT1) controls for Australia and the UK, enabling more shipments under No License Required (NLR). Reporting requirements were eased, and the availability of license exceptions were expanded. However, licenses are still required for firearms, ammunition, and certain chemicals. Despite NLR availability, AES filing is still mandatory for shipments over $2,500 per Schedule B number.

The session then covered ITAR changes related to AUKUS, highlighting the new exemption under §126.7. This allows exports, reexports, retransfers, temporary imports of defense articles, services, and brokering activities between the U.S., Australia, and the UK. Speakers noted that around 80% of defense items can qualify under this exemption. 

The UK and Australia also implemented the Excluded Technology Lists (ETL) which mirrors the US’, a major effort across all three systems. For Australia, this exception has significantly streamlined defense trade. Since September 1, 2024, over 270 Australian entities have registered for the license-free environment, using the exemption 350 times. This has facilitated over AUD $40 million in license-free exports to the U.S. and UK.

Enforcement Plenary

The final session on the second day of the BIS conference featured presentations from the Office of Export Enforcement (OEE), the Office of Anti-Boycott Compliance, among others. Key points raised included the assertion that “all technology is dual use in nature,” emphasizing the imperative of technological safeguards. The significance of end use checks in ensuring that exported items are used as intended was also discussed. Speakers identified Iran as an ongoing concern and stressed the importance of addressing emerging trends to counter illicit procurement. The OEE representative stated that “prevention is their number one goal” and that “national security is a shared responsibility,” encouraging industry collaboration with BIS to prevent the diversion of sensitive U.S. technology.