New BIS chief sets “deemed export,” “catch-all” rules as priorities

New BIS chief sets “deemed export,” “catch-all” rules as priorities

New BIS chief sets “deemed export,” “catch-all” rules as priorities

   The Bush administration's newly appointed chief of export controls told reporters he’s educated himself on pending policy and regulatory changes which may have an impact on how American shippers manage their overseas business for years to come.
   The two hot-button export control issues before the U.S. Commerce Department’s Bureau of Industry and Security, which many large high-tech and industrial shippers are closely monitoring, are the so-called “deemed export” and “catch-all” policy proposals.
   As BIS undersecretary, David McCormick said the proposed changes to deemed export regulations and catch-all requirements are at the “front of my plate.” He added that “each of these issues is important in its own right.”
   McCormick spoke about the agency’s upcoming agenda at the annual BIS Conference on Export Controls and Policy in Washington Monday. He also took questions from reporters at a press conference following his presentation.
   Deemed export regulations require BIS and the State Department’s Office of Defense Trade Controls to determine whether an export license is required to release technological know-how to a foreign national working in the United States.
   Since the Sept. 11, 2001 terrorist attacks, the Bush administration and some members of Congress have called for the Commerce Department to strengthen these controls. A 2004 Commerce Department Office of Inspector General’s report said current deemed export rules were weak.
   The proposed deemed export rule, which was released for public comment on March 28, would make use of an individual’s birth country, rather than the country of most recent citizenship or permanent residence, as criteria for deemed export licensing.
   “How do we manage this terrific inflow of talent from foreign countries and at the same time minimize the threat?” said McCormick, who most recently served as president and director of software firm Ariba. “In a service-based economy, this issue is becoming more important, not less.”
   BIS received about 300 comments from the industry regarding the deemed export rule changes. “We recognize it’s a very pressing issue,” McCormick said. “It’s what most people are anxious about in the industry and academia.”
   The Bush administration hopes the new catch-all requirements will help it exercise more control over shipments of military arms and components to certain countries.
   The Commerce Department, with input from the State and Defense departments, is reassessing its controls for non-listed, dual-use items under the Wassenaar Arrangement. The arrangement is an international agreement that requires member countries to closely control shipments of conventional weapons and their components, in addition to other dual-use times controlled for national security purposes.
   In 2003, the U.S. government also proposed enhanced licensing requirements for U.S.-origin, dual-use items and technology exported to 19 countries, including China. Dual-use items may be used for both commercial and military purposes.
   McCormick said BIS will work hard to “meet policy objectives” for both deemed exports and catch-all proposals without being “overly restrictive” with legitimate trade.