Every Monday we post the highlights out of last week’s FCC Export/Import Daily Update (“The Daily Bugle”). Send out every business day to approximately 8,500 readers of changes to defense and high-tech trade laws and regulations, The Daily Bugle is a free daily newsletter from Full Circle Compliance, edited by James E. Bartlett III, Salvatore Di Misa, and Elina Tsapouri.
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Last week’s highlights of The Daily Bugle included in this edition are:
- Commerce/BIS Amends EAR to Implement New Wassenaar Controls on Emerging Technologies; Monday, 5 Oct 2020; Item #2
- State/DDTC Posts New FAQs Regarding the Term “See-Through Rule as it Relates to the ITAR”; Monday, 5 Oct 2020; Item #6
- Canada TID: “Statement from Minister Champagne on Suspension of Export Permits to Turkey”; Wednesday, 7 Oct 2020; Item #8
- Commerce/Census: “Clarification on the BIS’s Mandatory Filing Requirements related to the 28thof Apr Final Rule”; Friday, 9 Oct 2020; Item #5
- White House: “Statement on Continuation of the National Emergency with Respect to the Situation In and In Relation to Syria”; Friday, 9 Oct 2020; Item #7
Commerce/BIS Amends EAR to Implement New Wassenaar Controls on Emerging Technologies
(Source: Federal Register) [Excerpts]
85 FR 62583: Final Rule
* AGENCY: Bureau of Industry and Security, Commerce.
* ACTION: Final rule.
* SUMMARY:The Bureau of Industry and Security (BIS) maintains, as part of its Export Administration Regulations (EAR), the Commerce Control List (CCL), which identifies certain items subject to Department of Commerce jurisdiction.
This final rule revises the CCL, as well as corresponding parts of the EAR, to implement certain changes made to the Wassenaar Arrangement List of Dual-Use Goods and Technologies (WA List) maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (Wassenaar Arrangement, or WA) at the December 2019 WA Plenary meeting. The Wassenaar Arrangement advocates implementation of effective export controls on strategic items with the objective of improving regional and international security and stability.
This final rule implements multilateral controls on six recently developed or developing technologies, which were identified by the WA December 2019 WA Plenary Meeting in a manner contemplated by the Export Control Reform Act of 2018 (ECRA) to identify emerging technologies that are essential to U.S. national security.
This rule harmonizes the CCL with the WA December 2019 Plenary Meeting agreements that pertain to these six technologies. The inclusion of the six technologies in this final rule is consistent with the requirements of ECRA and the decision of the WA to add such technologies to its control lists, thereby making exports of such technologies subject to multilateral control. As these six technologies are recently developed or developing technologies that are essential to the national security of the United States, early implementation of the applicable WA December 2019 Plenary agreements is warranted. The remaining WA 2019 Plenary agreements will be implemented in a separate rule.
* DATES: This rule is effective October 5, 2020.
* FOR FURTHER INFORMATION CONTACT:
For general questions, contact Sharron Cook, Office of Exporter Services, Bureau of Industry and Security, U.S. Department of Commerce at 202-482-2440 or by email: Sharron.Cook@bis.doc.gov. …
The Wassenaar Arrangement (Wassenaar or WA) on Export Controls for Conventional Arms and Dual-Use Goods and Technologies is a group of 42 like-minded states committed to promoting responsibility and transparency in the global arms trade and preventing destabilizing accumulations of arms. As a Participating State, the United States has committed to controlling for export all items on the WA control lists. These lists were first established in 1996 and have been revised annually thereafter. Proposals for changes to the WA control lists that achieve consensus are approved by Participating States at annual plenary meetings. Participating States are charged with implementing the agreed-upon list changes as soon as possible after approval. The United States’ implementation of WA list changes ensures that U.S. companies have a level playing field with their competitors in other WA Participating States.
This final rule implements multilateral controls on six recently developed or developing technologies, which were identified by the WA December 2019 WA Plenary Meeting in a manner contemplated by the ECRA to identify emerging technologies that are essential to U.S. national security. This rule harmonizes the CCL with the agreements reached by the WA during the WA December 2019 Plenary Meeting. The inclusion of the six technologies in this final rule is consistent with the requirements of ECRA and the decision of the WA to add the technologies to its control lists, thereby making exports of such technologies subject to multilateral control (following implementation by the United States and other WA participating countries).
To implement the WA control list changes, this rule adds to the EAR’s CCL the following six recently developed or developing technologies that are essential to the national security of the United States: Hybrid additive manufacturing (AM)/computer numerically controlled (CNC) tools; computational lithography software designed for the fabrication of extreme ultraviolet (EUV) masks; technology for finishing wafers for 5nm production; digital forensics tools that circumvent authentication or authorization controls on a computer (or communications device) and extract raw data; software for monitoring and analysis of communications and metadata acquired from a telecommunications service provider via a handover interface; and sub-orbital craft.
This rule also makes a correction to one ECCN and revises three related ECCNs and one License Exception.
Certain Revisions to the Commerce Control List Related to WA 2019 Plenary Agreements:
Revises five (5) ECCNs: 2B001, 3D003, 5E001, 5A004, 9A004
Revises three (4) related ECCNs: 5D002, 5E002, 9A012, 9A515
Corrects one (1) ECCN: 5D001
License Exception eligibility revisions: ENC
Adds (1) ECCN: 3E004
. . . .
List of Subjects 15 CFR Part 740
- Administrative practice and procedure
- Reporting and recordkeeping requirements
- Reporting and recordkeeping requirements
Accordingly, parts 740, 772, and 774 of the Export Administration Regulations (15 CFR parts 730 through 774) are amended as follows: . . . .
(See Source for remaining text.)
State/DDTC Posts New FAQs Regarding the Term “See-Through Rule as it Relates to the ITAR”
(Source: DDTC, 5 Oct 2020)
Q: Where can I find the “see-through rule” in the ITAR and how does it work?
A: The phrase “see-through rule” is a colloquial phrase popularly used to refer to the impact of certain ITAR controls. Specifically, it refers to the fact that pursuant to ITAR §120.6, any item described on the USML is a defense article. ITAR § 123.1(a) further provides that any person who intends to export or temporarily import a defense article must obtain the approval of DDTC prior to the export or temporary import, and ITAR § 123.9(a) requires the written approval of DDTC before reselling, transferring, reexporting, retransferring, transshipping, or disposing of a defense article to any end-user, end-use, or destination other than as stated on the export license, except in accordance with the provisions of an applicable exemption. These controls do not disappear simply because the defense article is integrated into another item.
If an ITAR-controlled defense article is integrated into a larger system or end-item, the defense article does not lose its identity. Except as articulated specifically in the USML (see e.g., USML Category XV, Note 2 to paragraph (e)) the ITAR “sees through” the larger system or end-item and continues to regulate that defense article.
Canada TID: “Statement from Minister Champagne on Suspension of Export Permits to Turkey”
(Source: Canada TID, 5 Oct 2020)
“Over the last several days, certain allegations have been made regarding Canadian technology being used in the military conflict in Nagorno-Karabakh.
“Upon learning of these allegations, I immediately directed Global Affairs Canada to investigate these claims.
“In line with Canada’s robust export control regime and due to the ongoing hostilities, I have suspended the relevant export permits to Turkey, so as to allow time to further assess the situation.
“Canada continues to be concerned by the ongoing conflict in Nagorno-Karabakh resulting in shelling of communities and civilian casualties.
“We call for measures to be taken immediately to stabilize the situation on the ground and reiterate that there is no alternative to a peaceful, negotiated solution to this conflict.
Commerce/Census: “Clarification on the BIS’s Mandatory Filing Requirements related to the 28th of Apr Final Rule”
(Source: Census, 8 Oct 2020)
On Sunday, September 27, 2020, the Bureau of Industry and Security (BIS) required full compliance with a final rule that expanded the Electronic Export Information (EEI) filing requirement in the Automated Export System (AES) for exports to China, Russia and Venezuela. This rule can be found in its entirety at:
The U.S. Census Bureau (Census) has received a number of questions related to BIS’s final rule, specifically the addition to § 758.1(b) of the BIS’s Export Administration Regulations (EAR). This rule added § 758.1(b)(10) of the EAR to require EEI filing for items on the Commerce Control List (CCL) (Part 774 of the EAR) destined to China, Russia, or Venezuela regardless of the value of the shipment, unless the shipment is eligible for License Exception GOV. Most of the questions that Census has received have been related to whether or not ALL exports to China, Russia, and Venezuela require filing.
Census reached out to our partner Commerce agency, BIS, and received the following guidance:
- “Items on the Commerce Control List” includes any item having an Export Control Classification Number (ECCN), but does not include items that are designated as EAR99.
- Starting Sunday, September 27, 2020, EEI filing for exports to China, Russia, or Venezuela of items controlled by ECCNs is required regardless of value, unless the shipment is eligible for License Exception GOV.
- EAR99 items are not subject to BIS’s mandatory filing requirements under § 758.1(b)(10) and an AES exemption from the Foreign Trade Regulations (FTR) may apply.
- If EEI filing for exports to China, Russia, or Venezuela is required, then the ECCN must be reported in AES.
For example, an individual is exporting an item valued at $1,000 to China and needs to determine if filing EEI is required. The individual first needs to determine if filing is required under BIS’s mandatory filing requirements in § 758.1(b)(10) of the EAR by determining if the item has an ECCN or is EAR99, as well as any other mandatory filing requirement in § 758.1(b). In this example, the individual determines the item is EAR99. Because the item is EAR99 and destined to China, this export is not subject to the new filing requirement in § 758.1(b)(10). Therefore, an exemption from filing EEI under the FTR would apply, specifically the exemption in Section 30.37(a) of the FTR that applies to goods valued $2,500 or below per Schedule B, provided there are no other mandatory filing requirement in § 758.1(b). The individual in this example is not required to file EEI and the individual would provide the appropriate exemption annotation (i.e., NOEEI 30.37(a)) to the carrier.
Resources and Contact Information:
For the entirety of BIS’s final rule, please visit https://www.govinfo.gov/content/pkg/FR-2020-04-28/pdf/2020-07241.pdf
The BIS issued a FAQ document related to its final rule available here, with information related to filing EEI available on page 8 of the document:
White House: “Statement on Continuation of the National Emergency with Respect to the Situation In and In Relation to Syria”
(Source: The White House, 8 Oct 2020)
On October 14, 2019, by Executive Order 13894, I declared a national emergency pursuant to the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) to deal with the unusual and extraordinary threat to the national security and foreign policy of the United States constituted by the situation in and in relation to Syria.
The situation in and in relation to Syria, and in particular the actions by the Government of Turkey to conduct a military offensive into northeast Syria, undermines the campaign to defeat the Islamic State of Iraq and Syria, or ISIS, endangers civilians, and further threatens to undermine the peace, security, and stability in the region, and continues to pose an unusual and extraordinary threat to the national security and foreign policy of the United States. For this reason, the national emergency declared on October 14, 2019, must continue in effect beyond October 14, 2020. Therefore, in accordance with section 202(d) of the National Emergencies Act (50 U.S.C. 1622(d)), I am continuing for 1 year the national emergency declared in Executive Order 13894 with respect to the situation in and in relation to Syria.
This notice shall be published in the Federal Register and transmitted to the Congress.
DONALD J. TRUMP