Where Industry and Security Intersect
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OPEN SESSION
Keith Melchers, Chair – Welcome and Introductions
Chris Wall – BIS Update
Welcomed the RPTAC, having been sworn in as Assistant Secretary for Export Administration two months ago; many initiatives with four months to go in the Administration
Regarding National Security Presidential Directive (NSPD) 55 on export control reform: rare for the President to get involved, significant that he did
End-user focus, control list updates, and deemed export reform; implementation will be difficult, with lots of interagency back and forth
Focus on legislative and regulatory priorities
Legislative initiatives (new Export Administration Act or new statute) – not likely this fall but may provide a foundation for new Administration
Regulatory initiatives – finishing what the NSPD started
Proposed Additional Protocol Regulations and expanded criteria for the Entity List are published
Coming soon: Intra-Company Transfer License Exception (ICT), a proposed rule soliciting public comments; encryption simplification, first stage in a difficult process; de minimis, in which the bifurcation of software and hardware incorporated into foreign products will be addressed
Other areas: State Department’s rule application of sec. 17(c) of the Export Administration Act (jurisdiction over certain aircraft parts) is not perfect, but it is progress; the Export Administration Regulations’ complementary Interpretation 9 rule is being drafted
Foreign Availability Assessment on thermal imaging and an interagency process to clarify jurisdiction
Currency of technology controls and regime rules
Deemed exports – a zero-based review of the technologies, examination of nationality criteria, fundamental research, technology leadership – the Emerging Technologies and Research Advisory Committee (ETRAC) to meet on September 23
Crime control – two stages: first, technical changes and clarifications, then countries and technologies
Mandatory electronic filing (SNAP-R) rule published
Committee on Foreign Investment in the United States (CFIUS) – regulations and lots of cases
Country policy: transshipment countries – outreach and bilateral negotiations; Israeli High Technology Forum; China – VEU implementation issues and Joint Committee on Commerce and Trade (JCCT); India – High Technology Coordinating Group
November, December, January: industry issues will need to be addressed regardless of election outcome
Look forward to smooth transition and good stewardship, discussion of future shape of export controls
Tom Madigan – Export Enforcement
New Director of Office of Export Enforcement, sitting in for Deputy Assistant Secretary Kevin Delli-Colli
Update Conference preview: Assistant Secretary keynote; Deputy Assistant Secretary overview; questions from industry submitted ahead of time; “anatomy of an investigation” breakout session
Statistics: For third quarter, included 145 Voluntary Self-Disclosures received, 42 closed with one charging letter
Foreign Trade Regulations (FTR) referrals from Census: EE looking for EAR violations; EE priorities of weapons of mass destruction, terrorism, and unauthorized military end-use; pattern of disregard for the Foreign Trade Regulations that seems intentional
Census strongly pursuing informed compliance; EE focus on outreach, reasonableness standard
Dale Kelly – Census/Automated Export System (AES)
Outreach in advance of new Foreign Trade Regulations’ implementation October 1
Unfortunately, still getting paper declarations, although numbers are down
FTR letter #1: Shipments from U.S. to Puerto Rico exempt from 24 hr/2 hr rule
FTR letter #2: being drafted – shipment reference number must be unique
More training all over the country through the end of September
Translating AES seminar into Spanish
Hillary Hess – Published Regulations
9/5/08 Additions to Entity List and removal of General Order
9/5/08 Classification of Crew Protection Kits on the Commerce Control List (CCL)
9/2/08 Addition of Kosovo
8/21/08 Expansion of the Entity List
8/21/08 Mandatory Electronic Filing
7/8/08 Australia Group revisions to the CCL
6/16/08 Missile Technology Control Regime revisions to the CCL
6/13/08 Expansion of gift parcel license exception for Cuba to authorize mobile phones
WORK GROUPS
Ben Flowe & Ed Bond – Encryption
Partnered with Information Systems Technical Advisory Committee (ISTAC), focused on regulatory side
Ben Flowe & Kathleen Palma – Compliance and Enforcement
FTR penalty mitigation (Kevin Delli-Colli, EE)
Best practices (Tom Andrukonis, Export Management Compliance Div.)
Waiver requests for items subject to VSDs
Julie LaCross – Policies and Procedures
Pleased with SNAP-R
Looking forward to ICT, AES
Keith Melchers – Multilateral Controls
ICT and other rules
Keith Melchers
Solicited public comments or papers (none); December meeting Wednesday instead of Tuesday to avoid Practicing Law Institute meeting