Whats New in Export Controls?

Comments on Proposed Rule Revisions and Clarification of Export/Reexport Controls for the People's Republic of China and New Authorization Validated End-User (December 21, 2006).

Statement by U.S. Commerce Secretary Gutierrez on Luxury Goods Ban to North Korea (November 29, 2006).

BIS publishes request for comments in the Federal Register on the Effects of Foreign Policy-Based Export Controls (October 23, 2006).

Supplemental Guidance to Proposed Rule Revisions and Clarification of Export and Reexport Controls for the People’s Republic of China (PRC); New Authorization Validated End-Use (October 13, 2006).

Commerce Secretary Announces Advisory Committee to Protect National Security and Increase American Competitiveness and Innovation (12 Business and Academic Leaders Appointed) (September 12, 2006).

Washington, D.C. - U.S. Commerce Secretary Carlos M. Gutierrez today announced the appointment of 12 business and academic leaders to the newly formed Deemed Export Advisory Committee.

The Advisory Committee will address the complex issues surrounding sensitive technology transfers which involve the release of closely monitored dual-use technology to foreign nationals in the United States, known as “deemed exports.” Unauthorized release of tightly monitored technology to parties of concern could contribute to the development of weapons of mass destruction.

Secretary Gutierrez named Norman Augustine, Retired Chairman & CEO, Lockheed Martin Corporation and Robert Gates, PhD, President of Texas A&M, to be Co-Chairs of the Advisory Group.

"This committee will address evolving export policies to strike a balance between protecting national security and ensuring that the United States continues to build upon its position as a leading innovator of technology," said Secretary Gutierrez. "This is an important issue at a vital time in our nation, and I appreciate the service of our Co-Chairs Norm Augustine and Bob Gates, and all members of the Committee."

The formation of the Committee is a direct result of President Bush’s challenge to expand competitiveness while protecting U.S. national security. The Administration has undertaken a comprehensive review of deemed export policy, based on extensive dialogue over the last two years with industry, academia and the research community

Lawrence Scibetta Fined $30,000 and Denied Export Privileges for Unlicensed Export to the United Arab Emirates (August 17, 2006)

The U.S. Department of Commerce today announced that Lawrence Scibetta of Port St. Lucie, Florida, has agreed to pay a $30,000 civil penalty and be subject to a 20-year denial of export privileges to settle charges that he violated the Export Administration Regulations (EAR) in connection with the unlicensed export of thermal imaging cameras to the United Arab Emirates.

The Commerce Department’s Bureau of Industry and Security (BIS) charged that on about June 10, 2004, Scibetta engaged in conduct prohibited by the EAR when he attempted to export two Raytheon thermal imaging cameras from the United States to the United Arab Emirates without the required export license. Scibetta was also charged with acting with knowledge and making false statements to the U.S. Government. At the time of the attempted export, Scibetta was living in New Jersey.

BIS has increased its focus on preventing the spread of items that are useful to terrorists, in weapons of mass destruction, or in other weapons or devices that threaten U.S. national security. So far this year, these efforts have led to 33 criminal convictions and criminal fines of $2.85 million, as well as 22 denial orders and 66 administrative penalties totaling $6.22 million.

Assistant Secretary for Export Enforcement Darryl W. Jackson commended BIS’s New York Field Office for its work in this investigation.

UN Security Council Decision (August 11, 2006)
On August 11, 2006, the United Nations Security Council voted unanimously to impose an embargo on the export of arms and related material, as well as defense services, to Lebanon. A formal acknowledgement of the arms embargo against Lebanon, along with an amendment to Section 126.1 of the ITAR to reflect the fact of the embargo, will be published shortly in the Federal Register.

New BIS Announcement (May 31, 2006)
The Bureau of Industry and Security (BIS) announced (Fed. Reg.: Vol 71; No. 104; pp.30840-30844) that it has reviewed the public comments in response to the "Advance Notice of Proposed Rulemaking: Revision and Clarification of Deemed Export Related Regulatory Requirements" (ANPR) published in the Federal Register on March 28, 2005, and has decided to withdraw the ANPR.

The BIS concluded the existing definition of "use" was appropriate. The definition states that the technology of the operation, installation, maintenance, repair, overhaul, and refurbishing must all be present to trigger the need for a deemed export license.

In addition, the BIS decided that the current deemed export licensing policy which focuses on a foreign national's country of citizenship or permanent residency rather than country of birth is still appropriate.

However, the BIS does state in the announcement: "While the product of the fundamental research is not subject to the EAR because the results of that research are intended for publication and dissemination within the scientific community, authorization may be required if during the conduct of the research controlled technology is released to a foreign national." In other words, a deemed export license may be necessary if controlled proprietary technology is given to a foreign national even though the results of the research may be in the public domain and therefore, not subject to the EAR.

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