U.S. Bureau of Industry and Security (BIS) Archives - Page 4 of 17

BIS Issues Guidance to Financial Institutions on Best Practices for Compliance with the Export Administration Regulations
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BIS Issues Guidance to Financial Institutions on Best Practices for Compliance with the Export Administration Regulations
Export, U.S. Bureau of Industry and Security (BIS), U.S. Department of Commerce (DOC)

BIS Issues Guidance to Financial Institutions on Best Practices for Compliance with the Export Administration Regulations

The Department of Commerce’s Bureau of Industry and Security (BIS) recently published guidance for financial institutions containing several recommendations for complying with the Export Administration Regulations (EAR).

The guidance provides recommendations on steps financial institutions can take to minimize the likelihood of EAR violations. The recommendations focus on three key areas: due diligence best practices, reviewing transactions for red flags, and real-time screening.

Due Diligence Best Practices

The guidance recommends that financial institutions incorporate EAR related due diligence into their compliance and risk management and compliance processes. Due diligence should be conducted both before onboarding a new customer and as part of regular due diligence thereafter.

Specifically, BIS recommends that financial institutions:

Review customers against lists of persons subject to BIS’s end-user restrictions
Review customers – and, where appropriate, customers’ customers – against lists of entities that have shipped Common High Priority List (CHPL) items to Russia since 2023
Ask a customer to certify that it has controls in place to comply with the EAR if the customer is engaged in the export, reexport or transfer of items subject to the EAR and is on a restricted-party list

Review Transactions for Red Flags

The guidance recommends that financial institutions review transactions on an ongoing basis for red flags:

Purchases under a letter of credit that are consigned to the issuing bank, not to the actual end user.
Transactions involving entities with little to no web presence, such as a website or a domain based email account.
A customer lacks or refuses to […]

By Jennifer Diaz|2024-10-11T15:11:38-04:00October 11, 2024|Export, U.S. Bureau of Industry and Security (BIS), U.S. Department of Commerce (DOC)|0 Comments

BIS Issues Final Rule on VSD Policies and Penalty Guidelines
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BIS Issues Final Rule on VSD Policies and Penalty Guidelines
EAR, Export, U.S. Bureau of Industry and Security (BIS)

BIS Issues Final Rule on VSD Policies and Penalty Guidelines

BIS recently issued a final rule to amend the Export Administration Regulations (EAR), making several changes to their Voluntary Self Disclosure (VSD) policies, as well as updates to guidance on penalty determinations.

The rule codifies previously announced policy changes through several Policy Memoranda including an April 2023 memorandum on voluntary-self disclosures, and a June 2022 memorandum on strengthening administrative enforcement.

Revisions to Voluntary Self-Disclosures

The rule makes both substantive and procedural changes to the VSD policies:

Addition of non-disclosure as an aggravating factor – the new rule makes clear that BIS will consider a deliberate decision to not disclose a violation as an aggravated factor when determining what administrative sanctions will be imposed.
New dual track for processing VSDs – one track for minor or technical violations, the other for significant violations.
Authorizes any person (not just the party submitting a VSD) to notify the Director of BIS’s Office of Export Enforcement (OEE) that a violation has occurred and to request permission to engage in corrective activities.

Revisions to Penalty Guidelines

This rule makes several changes to the BIS Penalty Guidelines, including:

Changes the base penalty caps:
1. Non-egregious VSD cases: was $125,000, now one-half of the transaction value.
2. Non-egregious cases that are not initiated by a VSD: was $250,000, now the full transaction value.
Permits BIS to use non-monetary penalties to resolve cases that are not egregious and have not resulted in national security harm, but rise above the level of cases warranting a warning letter.
Removes from the BIS […]

By Jennifer Diaz|2024-09-26T16:04:14-04:00September 26, 2024|EAR, Export, U.S. Bureau of Industry and Security (BIS)|0 Comments

BIS Issues New Guidelines for Preparing Export License Applications Involving Foreign Persons (Deemed Exports/Reexports)
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BIS Issues New Guidelines for Preparing Export License Applications Involving Foreign Persons (Deemed Exports/Reexports)
EEI, Export, U.S. Bureau of Industry and Security (BIS), U.S. Department of Commerce

BIS Issues New Guidelines for Preparing Export License Applications Involving Foreign Persons (Deemed Exports/Reexports)

The Bureau of Industry and Security (BIS) issued new guidelines to assist deemed export applicants in obtaining licenses. The guidelines primarily apply to employment situations; however, they also address other situations such as the release of controlled technology to foreign students participating in research.

The guidelines cover basic requirements for applying and renewal and include an application checklist.

Background on Licenses for Deemed Exports/Reexports

The obligation to obtain an export license from BIS before releasing controlled technology to a foreign person is informally referred to as a “deemed” export. The release is considered an export to the person’s country or countries of nationality.

The Export Administration Regulations (EAR), Section 734.13, defines a deemed export as releasing or otherwise transferring “technology” or “source code” to a foreign person in the United States.

Typical organizations using deemed export licenses include universities, research institutions, bio-chemical firms, medical organizations, and computer companies.

New Guidance

The basic guidance for filling out license applications is set forth in Supplement 1 to part 748 of the EAR. The new guidelines supplement the basic guidance and are intended to assist licensing officers in reviewing license applications more efficiently.

Basic Requirements

The guidelines reiterate that applicants must include all the necessary information and documentation required when submitting a license application. BIS will return applications with insufficient information.

Basic documentation required:

By Jennifer Diaz|2024-09-13T11:56:54-04:00September 13, 2024|EEI, Export, U.S. Bureau of Industry and Security (BIS), U.S. Department of Commerce|0 Comments

ICYMI: BIS Updates Boycott Requester List
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ICYMI: BIS Updates Boycott Requester List
EAR, Export, U.S. Bureau of Industry and Security (BIS), U.S. Department of Commerce

ICYMI: BIS Updates Boycott Requester List

The Department of Commerce’s Bureau of Industry and Security (BIS) published its first quarterly update of the Boycott Requester List. The list notifies companies, freight forwarders, financial entities, and individuals of potential sources of boycott-related requests that they may receive.

Background on Boycott Requests

BIS is charged with enforcing anti-boycott laws under the Export Administration Regulations (EAR). The laws prohibit U.S. companies from taking actions in furtherance of a boycott maintained by a foreign country against a country friendly to the United States. Common boycott requests include:

Requesting a certification that goods are not from a specific country
Requesting that goods are not shipped to a certain country
Requesting that a business does not engage with a particular country

U.S. persons must report boycott-related requests to BIS’s Office of Anti-boycott Compliance (OAC).

Boycott Requester List

OAC maintains a boycott-requester list to raise awareness and assist U.S. persons in identifying sources of boycott-related requests.

Entities on the list have been reported by a U.S. person to BIS via a request report form. The list is updated quarterly but is not an exhaustive list of entities that may make these requests.

The most recent update to the list includes 57 additions and the removal of 127 entities.

Requesting countries added in the most recent update include: