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A couple of weeks ago I visited Washington D.C. to attend the Bureau of Industry and Security (BIS) Update 2015 Conference on Export Controls and Policy.
I love visiting our nation’s capital, and I went a few days early to take in some sights including the National Portrait Gallery, Ford’s Theater, a walk past the White House and the Washington Wizards’ home opener.
When Update started on Monday my feet were aching, and I was ready to sit and listen to the many government officials who were there to share their thoughts with us, the regulated community (their term, not mine).
A Smaller Yard with Higher Walls
A big topic this year was Export Control Reform (ECR). In August 2009 President Obama requested an interagency review of the U.S. export control system in order to strengthen national security and improve competitiveness of U.S. manufacturing and technology sectors. The review determined that the current system is too complicated and tries to protect too much.
The ECR initiative came out of that review, and for the last few years the various U.S. government agencies involved in export controls have been working to “protect a smaller yard with higher walls.” This includes moving many items from the U.S. Munitions List (USML), controlled by the Department of State, to the less restrictive Export Administration Regulations (EAR), controlled by the Department of Commerce.
The ECR is moving from broader controls, which are simple but control too much, to tailored controls, which are more complex but control fewer items.
Not All Licenses Are Equal
One session at the Update covered export licensing basics. While I have heard it before, I did learn a few new things about export licensing. Export licenses granted by the Commerce Department through BIS are not limited to a single shipment. They are generally valid for four years, but you can request a longer license.
A BIS license can cover many purchase orders as long as the total value of all shipments does not exceed the value of the license. This is different than a DDTC license obtained from the U.S. State Department, which requires a different license for each shipment or purchase order.
It Takes a Village
BIS does not make their license decisions alone. They often send the license application to the Departments of State and Defense, and sometimes the application will also go to the Department of Energy. BIS has nine days to refer the application to other agencies, and each agency gets 30 days to respond to BIS, although this may be with more questions rather than a decision.
The reviewing agencies may need to send it out to others as well. For example, the Department of Defense may need to consult the Army, Navy, Air Force or Marines. National security and economic issues are the key concerns of the various agencies.
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A Confused Licensing Officer is a Nervous Licensing Officer
Your license will come back as Approved, Approved with Conditions, Denied, or Returned without Action.
Be sure to prepare a thorough license application in order to receive a license approved without conditions. One of the BIS officers said, “A confused licensing officer becomes nervous and lashes out with conditions!” He said, “Don’t describe your product by just retyping the ECCN description, and don’t say the end use is research and development.”
Draw a clear and detailed picture of the transaction for the licensing officer.
One of the things on the license application that BIS looks at carefully is the parties to the transaction. They want to know how well you know your customer. Have you visited your customer? If not, what is the source of your information to know the company you are selling to is valid?
Keep an Eye Out for Questions
BIS impressed upon us the need to check your SNAP-R account often while waiting for a license determination because that is how they post questions, and waiting for your response delays the license decision even more. A license application will be returned without action if you don’t respond to a question within 10 days.
Other reasons an application will be returned without action is if you over classified your product, failed to take advantage of a license exception, or you failed to screen the parties to the transaction.
A Denial Is Not a Scarlet Letter
If your application is denied, it is not a black mark or a scarlet letter, and it should not discourage you from applying for another export license in the future. And if your license comes back with conditions, be sure to read them! Sometimes conditions will affect your customer, so be sure to share the license conditions with them.
I will cover other Update topics in future blog posts. Until then, go Wizards!
| Product Model | Inside Diameter | Outside Diameter | Thickness |
| CRV16/3AS NTN | 11.112 | 25.4 | 17.6 |
| CRV14/3AS NTN | 9.525 | 22.225 | 14.3 |