The Bureau of Industry and Security recently completed rounds of interagency reviews for two final rules that could align its controls with multilateral export control bodies. The first, completed Sept. 20, would align its regulations with certain changes made by the multilateral Australia Group. The second, completed Sept. 26, would align the agency's export controls with changes recently made by the multilateral Missile Technology Control Regime. The Australia Group rule (see 2308280013) and the MTCR rule were both sent to the Office of Information and Regulatory Affairs Aug. 25 (see 2308280014).
LONDON -- Gyorgy Molnar, head of the multilateral Wassenaar Arrangement secretariat, said he is “cautiously optimistic” the regime will be able to agree to more export control proposals this year as opposed to the prior year. Molnar didn’t specifically name Russia but said a “number” of proposals last year “were blocked by one participating state.”
The Bureau of Industry and Security is issuing a technical correction to the Export Administration Regulations and clarifying its rules that cover releases of certain software, the agency said in a final rule issued last week. The rule, effective Sept. 18, clarifies an “ambiguity” in the EAR and notes that releases of software include both source code and object code “for purposes of transfer of access information.” The change will “eliminate potential uncertainty that the § 734.15 definition of 'release' limits § 734.19 to only controlling transfers of access information that release source code, rather than both source code and object code,” BIS said.
The State Department’s Directorate of Defense Trade Controls last week issued two new risk compliance matrices, one for businesses and one for universities, to help them comply with the International Traffic in Arms Regulations. The matrices, which have been under work at DDTC since at least November (see 2211100023), are meant to guide exporters, manufacturers, researchers, academics and others through an assessment of their ITAR export control risks. DDTC said that after using the documents to conduct an ITAR risk assessment, organizations and researchers should “use that data to create an effective and tailored ITAR compliance program and allocate resources as appropriate to prioritize and mitigate those risks.”
The State Department published a final rule in the Federal Register this week to officially extend relaxed export restrictions for certain defense goods and services involving Cyprus. The agency announced last month that it planned to renew the measures (see 2308210013), which were first introduced in a September 2020 rule that amended the International Traffic in Arms Regulations to relax restrictions surrounding exports of nonlethal defense goods and services to Cyprus, and also eased restrictions on reexports, retransfers and temporary imports (see 2009020045). The agency has extended the rule each year since (see 2209190009 and 2211210028). The latest renewal, effective Oct. 1, expires Sept. 30, 2024.
The Commerce Department is looking into whether a Chinese-made chip powering Huawei's latest smartphone was made or acquired through means that violated U.S. export controls, an agency official said this week. “We are working to obtain more information on the character and composition of the purported 7nm chip” included in Huawei’s new Mate 60 Pro+ smartphone, the official said. The Chinese telecommunications company announced the new phone during Commerce Secretary Gina Raimondo’s trip to China earlier this month.
The Bureau of Industry and Security is still “developing” a rule that will expand the agency’s restrictions on certain activities that support foreign military, security or intelligence services, Hillary Hess, the agency’s regulatory policy director, said during a Sept. 12 Regulations and Procedures Technical Advisory Committee meeting. The rule, hailed by one lawmaker as the “largest expansion of presidential export control authority in several years,” will implement a provision in the FY 2023 defense spending bill that will allow BIS to expand its U.S. persons controls to capture certain sensitive services to foreign intelligence agencies (see 2212210032).
The Bureau of Industry and Security is drafting a proposed rule that could make “enhancements” to and simplify License Exception Strategic Trade Authorization, 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 sent the rule for interagency review Sept. 8. The agency has said it wants more exporters to use the license exception, which could help expedite certain exports and reduce workload for the government (see 2209280042).
Congress may want to consider modifying U.S. export control regulations given the changing assumptions about the pace of technological development and the obstacles that presents for government agencies, the Congressional Research Service said in a report this month. The 40-page report suggests the U.S. may seek to review the Export Control Reform Act, which was drafted with “embedded assumptions about the pace of technological development” that may no longer be true, the report said.
The Bureau of Industry and Security is drafting a proposed rule to revise license exception Additional Permissive Reexports, which allows certain reexports of controlled U.S. items from U.S. allies, including those listed under Country Group A:1 of the Export Administration Regulations. BIS sent the rule for interagency review Sept. 1. The agency in 2020 proposed reducing the number of countries eligible for the license exception, but trade groups and companies said the move could damage U.S. competitiveness (see 2009220037).