BIS Proposes Changes To Required Support Documents Under EAR

by Shannon Allen

The Commerce Department’s (“DOC’s”) Bureau of Industry and Security (“BIS”) issued a proposed rule to amend regulations regarding support documents required for license application submissions under the Export Administration Regulations (“EAR”) and changes to BIS’s role in issuing documents for the Import Certificate and Delivery Verification system.  The Export Administration Act of 1979 (“EAA”) has been in lapse since August 21, 2001.  Effectively, however, the President has continued it under the International Emergency Economic Powers Act (“IEEPA”).  Pursuant to Executive Order 13222 as amended by Executive Order 13637, the BIS continues to carry out the provisions of the EAA.

Under Executive Order 13563, agencies are mandated to “periodically review its existing significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency's regulatory program more effective or less burdensome in achieving the regulatory objectives.”  The purpose of this review is, among other things, to allow for public participation and an open exchange of ideas, as well as to promote predictability and reduce uncertainty.

On August 5, 2011, the BIS published a notice of inquiry on retrospective regulatory review seeking public input on parts or sections of the EAR that are not immediately affected by the Export Control Reform initiative and that improve clarity. . .  streamline requirements . . . improve efficiency and reduce burden.  This proposed rule is in direct response to public comments received.  BIS’s rule proposes to:

• remove the requirement to obtain an International Import Certificate or Delivery Verification (“IC/DV”) in connection with license applications;
• require a Statement by Ultimate Consignee and Purchaser for most license applications previously requiring an International Import Certificate;
• increase the license application value requirement for obtaining a Statement by Ultimate Consignee and Purchase from $5,000 to $50,000;
• cease issuing U.S. Import Certificates or Delivery Verifications for imports into the United States; and
• revise the rules’ structure and description of support document requirements to improve clarity.

The BIS believes that these proposals are beneficial for many reasons, including, but not limited to:

• increasing U.S. exporters competitiveness;
• furthering national security and foreign policy objectives of the United States;
• reducing unnecessary burdens imposed on license applicants;
• improving timeliness for shipping under an approved license;
• eliminating the need for BIS to request that a DV be obtained from a foreign government for a transaction;
• not requiring U.S. exporters to wait for an original Statement by Ultimate Consignee and Purchaser before shipping under an approved license so long as the exporter receives the original within 60 days from the date the document is signed by the ultimate consignee;
• only requiring the engagement of parties directly involved in the transaction;
• increasing the prevention of diversion by providing an affirmative statement on the actual end use of the item by the ultimate consignee or end user;
• increasing awareness among participating countries of potential enforcement concerns; and
• furthering the aims of Executive Order 13563.

Interested parties are invited to submit comments by June 9, 2014, through any of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. The identification number for this rulemaking is BIS-2014-0009;
• By email: to publiccomments@bis.doc.gov. Include RIN 0694-AG00 in the subject line; OR
• By mail or delivery: to Regulatory Policy Division, Bureau of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th Street and Pennsylvania Avenue NW., Washington, DC 20230. Refer to RIN 0694-AG00.