Export Compliance Plan

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: 

ICYMI: State Department Reaches $200M Settlement with RTX Corporation for Export Violations

The U.S. Department of State has reached a settlement with RTX Corporation to resolve 750 violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR).

The settlement resolved multiple violations including:

  • Unauthorized exports of defense articles resulting from the failure to establish proper jurisdiction and classification
  • Unauthorized exports of defense articles, including classified defense articles
  • Unauthorized exports of defense articles by employees via hand-carry to proscribed destinations listed in 22 C.F.R. 126.1; and
  • Violations of terms, conditions, and provisos of Directorate of Defense Trade Controls (DDTC) authorizations

RTX disclosed the violations voluntarily and cooperated with the State Department’s review.

Under the terms of the agreement, RTX will pay a penalty of $200M. $100 million will be suspended and used for remedial compliance measures to improve RTX’s compliance program. RTX must also engage an external Special Compliance Officer to ensure compliance with the agreement for at least 24 months.

This settlement demonstrates the State Department’s priorities in enforcing export controls and the importance of prioritizing compliance programs.

Diaz Trade Law can help create a new export compliance plan for your business or review and update an existing one. To learn more about how we can help, contact us at info@diaztradelaw.com or call us at 305-456-3830.

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Keysight Technologies Pays $6.6M to State Department for Export Violations

The U.S. Department of State and the California-based company Keysight Technologies Inc. have reached a settlement of $6.6 million for violations of the Arms Export Control Act (AECA), 22 U.S.C. § 2751 et seq., and the International Traffic in Arms Regulations (ITAR), 22 C.F.R. Parts 120-130.  This settlement comes after a compliance review by the Office of Defense Trade Controls Compliance (DDTC) in the Department’s Bureau of Political-Military Affairs for exporting unauthorized software used for testing radar equipment (on fixed or mobile platforms) to countries including Russia and China.

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By |2021-09-17T10:43:52-04:00September 17, 2021|Enforcement, Export, International Trade, ITAR|0 Comments

Exporting 101 – Introduction to Export Controls

On April 30, 2021, the Bureau of Industry and Security (“BIS”) announced that it had fined FLIR Systems, Inc. $307,922 for an egregious violation of the Export Administration Regulations (“EAR”) for misrepresentations made in commodity jurisdiction (“CJ”) requests. A BIS spokesperson said: “BIS will not tolerate exporters that provide inaccurate or incomplete representations related to export regulations and laws.”

This recent announcement is a textbook example of why it is important to obtain counsel and be  both proactive and truthful in regards to your export compliance. Whether you are new to exporting or looking to understand the foundations of export controls, including a discussion of recent penalty cases like FLIR’s (so they do not happen to you), or a seasoned professional looking to understand the latest developments, this one-hour webinar is a must attend. Register today to hear directly from the following expert duo:

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