DL Exports Export Compliance Update

Revision to Third Country Nationals Participation in Military Technical Exchanges

2011-07-12T12:52:00.000-07:00

Revision to Third Country Nationals Participation in Military Technical Exchanges

The Directorate of Defense Trade Controls of the U.S. State Department has approved an amendment to Section 124.16 of the International Traffic in Arms Regulations. Section 124.16 establishes the policy for granting exemptions for transfer of unclassified defense articles and services to dual national and third country nationals of licensed and approved end-users. Under this rule, transfer exemptions are permitted only to employees who are dual national and third country nationals of NATO or EU member states, Australia, Japan, New Zealand or Switzerland. There has been widespread dissatisfaction with the current rule, which conflicts with foreign human rights and antidiscrimination laws. It has also been felt that the Section 124.16 places too great an administrative burden on U.S. manufacturers and exporters, by requiring separate accounting and licensing of foreign individuals.

ITAR Section 126.18 does not replace Section 124.16, but provides another level of flexibility to permit transfer exemptions which would otherwise be prohibited because of foreign laws. It places the burden on the end-user to screen dual-national and third-country national employees and to follow effective procedures designed to prevent unlawful transfer of defense articles. Transfer exemptions are permitted only if they take place within the end-user’s country or where an organization conducts its official business. The transfer must be within the scope of the export license or authorization. A security clearance from the host country may be required. The end-user is required to establish a process to screen employees for “substantive contact” with ITAR restricted or prohibited countries as listed in ITAR 126.1. The definition of that substantive contact is spelled out explicitly. Nonetheless, by providing a detailed delineation of such contacts, the DDTC is attempting to provide a more flexible and holistic approach to employee screening.

This revision process has resulted in changes to the definitions of Regular Employee as outlined in ITAR 120.39, providing additional clarity to both Section 124.16 and Section 126.18.

New General License for Libya - US and UN missions

2011-03-02T11:58:00.000-08:00

In response to the unrest in Libya, the Office of Foreign Assets Control has issued a General License No. 2 to permit the export of goods and service to diplomatic missions of the Government of Libya to the US and UN permitting the payment of such goods. Mar 1, 2011

Libya - Neue Ausfuhrgenehmigung an die diplomatischen Vertretungen der US und UN

2011-03-02T11:56:00.000-08:00

Auf Grund der Unruhen in Libyen hat die US Regierung (Office of Foreign Asset Controls) eine neue Ausfuhrgenehmigung (General License No. 2) erstellt, um den Export von Waren und Dienstleistungen der libyischen Regierung an die diplomatischen Vertretungen der US und UN zu erlauben.

Deutsch - Das Meldeformular I-129 für Staatsbürgerschaft und Immigration (OSCIS) enthält neue Export Kontrollvorschriften (ITAR) für nicht Immigranten.

2011-03-02T10:00:00.001-08:00

Das Meldeformular I-129 für Staatsbürgerschaft und Immigration (OSCIS) enthält neue Export Kontrollvorschriften (ITAR) für nicht Immigranten.

“Die Zertifizierung über die Freigabe Kontrollierter Technologie oder technische Daten an ausländische Personen in den Vereinigten Staaten”. Diese Sektion erfordert den Bewerber um ein Zertifikat, ob die ausländischen Arbeitnehmer Zugang am Arbeitsplatz haben zur Technologie und technischen Daten, für die eine Ausfuhrgenehmigung erforderlich ist und, falls zutreffend, zu bestätigen, dass der Fragesteller Zugang hat, bis eine Ausfuhrgenehmigung oder andere Genehmigung erhältlich ist.

Petition for I-129 Immigration form has been revised to ask technology license questions:

2011-03-02T09:59:00.001-08:00

On December 22, 2010, U.S. Citizenship and Immigration Services (USCIS) announced on its website that employers will not be required to complete Part 6 of Form I-129 containing the new export control / ITAR questions until February 20, 2011. Part 6 is titled "Certification Regarding the Release of Controlled Technology or Technical Data to Foreign Persons in the

United States

." This section requires petitioners to make a certification on whether the foreign worker will have access in the workplace to technology and technical data for which an export license is required and, if applicable, to confirm that the petitioner will prevent such access until an export license or other authorization is obtained. See Part 6 to attached form.

New General License for Diplomatic Missions in Libya

2011-03-02T09:19:00.000-08:00

Kevin Wolf, Undersecretary of BIS, spoke Friday Dec 17th 2010 in Boston about export control reform

2011-01-12T11:57:00.000-08:00

Kevin Wolf, Undersecretary of BIS, stressed the following:

Export Control Reform – we are at the end of the beginning. It will be completed in 3 phases. Last, Phase III, when it is completed (Export Control Nirvana) will look like:

· Single licensing agency

· Single IT system

· Single enforcement agency

· Single set of regulations.

Phase II – List review

All agencies are screening against a set of criteria to have a 3-tiered system:

· Tier 1: items only available from US and have a military advantage. These would have world-wide licensing requirements.

· Tier 2: items that have substantial military or intelligence advantage will require a license outside of NATO and close allies.

· Tier 3: items that are more widely available. They will eventually drop off when availability is high enough.

Phase I - US Munitions List will become a positive list. Now “specially designed” catches too many components. Components should not be controlled at the same level as the end item. The Munitions List will be pared down.

Please review Federal Register Dec 10th notice (below) and provide comments by Feb 8th.

There will be a new license-free zone under license exception Strategic Trade Authorization (STA) that will permit export to NATO and members of at least 3 of the license regimes. This exception is also permitted for deemed exports. This will eliminate approximately 24,000 licenses where there have been only 11 denials, 5 for being on the Denied Parties List, so they should have been caught anyway under other prohibitions.

The agencies are also working on a single license form. The electronic submission will be outsourced. Definitions will be harmonized from all the regulations: fundamental research, publicly available, technology and specially designed.

Read the following for more detail/background on the President’s Export Control Reform Initiative:

In August 2009, the President directed a broad-based interagency review of the U.S. export control system, with the goal of strengthening national security and the competitiveness of key U.S. manufacturing and technology sectors by focusing on current threats, as well as adapting to the changing economic and technological landscape. This review determined that the current export control system is overly complicated, contains too many redundancies, and, in trying to protect too much, diminishes our ability to focus our efforts on the most critical national security priorities. (Read the White House Press Release)

As a result, the Administration has initiated an Export Control Reform Initiative (ECR Initiative), which will fundamentally reform the U.S. export control system. The ECR Initiative, which is not related to the President’s National Export Initiative, is designed to enhance U.S. national security and strengthen the United States’ ability to counter threats such as the proliferation of weapons of mass destruction.

The Administration is implementing the reform in three phases. The first two phases build toward the third phase of a single control list, licensing agency, information technology system, and enforcement coordination agency. Under this approach, new “criteria” for determining what items need to be controlled based on a three-tier construct and a coordinated set of policies for determining when an export license is required will be implemented. The control list criteria will be based on transparent rules, which will reduce the uncertainty faced by our allies, U.S. industry, and its foreign partners, and will allow the government to erect higher walls around the most sensitive items in order to enhance national security.

Progress Report

Control Lists. On December 9, 2010, the U.S. Departments of State and Commerce issued proposed regulations to reform their control lists, the U.S. Munitions List (USML) and Commerce Control List (CCL), respectively, in accordance with the ECR Initiative. Both Departments also solicited public comments on how to make their control lists more “positive” (see footnote below) and how to tier the lists taking into consideration the military or intelligence significance of an item and foreign availability information. The Federal Register notices issued are as follows:

Department of State Proposed Rewrite USML Category VII – Tanks and Military Vehicles.

Department of State Advanced Notice of Proposed Rulemaking to rewrite all other USML categories.

Department of Commerce Advanced Notice of Proposed Rulemaking soliciting comments on how the CCL can be more positive and tiered.

Department of Commerce Proposed Rule establishing License Exception Strategic Trade Authorization that implements revised dual-use licensing policies to certain destinations.

In addition, Departments have consolidated the export screening lists administered by the Departments of State, Commerce and the Treasury into a common electronic format to facilitate the screening of parties to export transactions to ensure compliance with U.S. export control and sanctions regulations.

Review the White House Fact Sheet on these ECR Initiatives.

Next Steps

The Administration will continue to issue additional ECR-related actions beginning in early 2011 with proposed rewrites of other USML categories, publication of proposed harmonized definitions and a proposed common form that exporters can use to apply for export licenses from the Departments of State, Commerce and the Treasury.

Footnote: Describing items using objective criteria, such as qualities to be measured (e.g., accuracy, speed, and wavelength), units of measure (e.g., hertz, horsepower, and microns), or other precise descriptions, rather than broad, open-ended, subjective, catch-all, or design intent-based criteria.