Bush decision on North Korea to have little effect on exports

Bush decision on North Korea to have little effect on exports    Despite the decision by President George W. Bush in late June to lift the designation of “a state sponsor of terror” from North Korea, there will be little impact on trade with the isolated Asian nation, according to a Q&A circulated by the U.S. Bureau of Industry and Security.
   First of all, the decision, made June 26, has to survive a 45-day congressional review period. At the same time, the Six Nations “have to reach agreement on acceptable verification principles and protocol regarding North Korea's nuclear activities. And even if it formally takes effect, not much will change for exporters looking to send goods to North Korea.
   “North Korea is currently a member of Country Groups D:1, D:2, D:3, D:4, and E:1,” BIS said. “In response to the formal rescission of North Korea's designation as a state sponsor of terrorism, the Department of Commerce would remove North Korea from Country Group E:1, but North Korea would likely retain membership in all four 'D' Country Groups. Controls for the 'D' Country Groups are as follows: D:1, national security and/or conventional military; D:2, nuclear concerns; D:3, chemical and biological; and D:4, missile technology.”
   One potential change is to de minimis rules, which refers to how much of a product bound for the North Korea can be made with U.S. components.
   “Removing North Korea from Country Group E:1 will raise the threshold value for calculating the de minimis level of foreign goods destined to North Korea to 25 percent controlled U.S. content,” BIS said. “Currently as a member of Country Group E:1 the threshold value for North Korea is 10 percent.”
   Licenses are required to export to North Korea, except for food and medicine intended as humanitarian aid. Export of luxury items, arms or any item that could contribute to North Korea’s defense program is prohibited.
   The entire Q&A can be found at: www.bis.doc.gov/policiesandregulations/regionalconsiderations/north_korea_questions.pdf.