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The Office of Exporter Services (OEXS) is responsible for providing education and compliance seminar programs and implementing general export control policy within BXA's Export Administration organization. In this capacity, OEXS develops BXA's outreach seminar program to educate the exporting community on controls, regulations, and licensing issues. OEXS also provides advice on a broad range of export issues, including licensing and documentation requirements for export transactions and special country policies. OEXS implements the Enhanced Proliferation Control Initiative (EPCI) End-User Verification process through which U.S. exporters are informed of proliferation concerns. It develops Internal Control Program Guidelines and Export Management System Guidelines that companies use to ensure exports are consistent with the Export Administration Regulations (EAR). Finally, OEXS administers International Cooperative Licenses to facilitate the export of items needed to fulfill U.S. partnership obligations in international cooperative efforts.
OEXS is responsible for implementing policy revisions and changes in the EAR (15 CFR parts 300 to 799), revising the current regulations, drafting new regulations, and coordinating the clearance of all regulatory changes to the EAR.
Other regulatory actions included imposition of broad restrictions on exports to Serbia on May 4, 1999, and retransfer of jurisdiction of the export of commercial communications satellites from the Commerce Control List to the State Department's Munitions List effective March 15, 1999.
Industry counseling remains an essential component of BXA's mission. Through a variety of outreach programs, BXA promotes an understanding of U.S. export control laws that enhance compliance and facilitates U.S. international competitiveness. OEXS accomplishes its outreach and counseling activity through its headquarters in Washington, D.C., and its Western Regional Office (WRO) in Orange County and Silicon Valley, California. The regional offices are located in the fastest growing, high-technology regions in the United States, and are within commuting distance of more than 10 percent of the total U.S. population. To assist exporters in all areas, OEXS introduced the Simplified Network Application Process (SNAP), a Web-based system that enables exporters to submit export and re-export license applications, high performance computer notices and commodity classification requests directly to BXA via the Internet in a secure environment.
Export Compliance Seminar Program
BXA is committed to providing the business community with information regarding changes in export policy and licensing procedures by offering a program of seminars and workshops that educate and inform. An important aspect of this program is its alliance with a variety of industry trade associations, universities and colleges, state and local governments, and nonprofit international business related organizations. This alliance furthers BXA's goal of maintaining a cooperative relationship with industry.
In FY99, OEXS conducted 32 export compliance seminars with more than 3,957 participants. In addition to its own programs, OEXS participated in more than 84 trade-related events, reaching nearly 4,000 business representatives. Much of the feedback from the business community was reviewed and evaluated for consideration in developing future programs.
In FY 99, OEXS continued an export licensing program that includes an extended format and increased government-industry interaction on export licensing policy. The Census Bureau, Office of Foreign Assets Control, and Export Enforcement participated in this program, which continued to provide specialized workshops in commercial encryption licensing, export management systems and freight forwarder programs. In FY00, OEXS will include programs that focus on the new Chemical Weapons Convention.
BXA's twelfth annual Update Conference on Export Controls and Licensing attracted more than 825 exporters. The annual conference is BXA's premiere event and the Commerce Department's largest event in the Washington, D.C. area. The conference brings high-level government officials and industry representatives together to discuss any significant changes in export control policies. BXA's Update West conference in California attracted more than 600 industry participants. During the program, Commerce Department officials and representatives from the interagency community discussed major developments including the newly released encryption export control liberalizations, technical data and software controls, export management systems, proliferation controls, and other pertinent export issues.
A company's ability to compete in the global marketplace often depends on a timely and efficient export licensing process. To this end, our regulatory specialists provide accurate and in-depth information in one-on-one counseling sessions, 11 hours a day. In addition, we maintain a broadcast e-mail and fax system known as "netFacts" and "FastFax" that issues timely updates to more than 3,300 subscribers. In addition, there is a document fax-on-demand system is available free-of-charge, 24-hours a day, and BXA's Web site is maintained with licensing information.In FY99, we successfully assisted more than 100,000 people and experienced only one delay in service due to a malfunctioning phone system in Washington, which was quickly replaced with a more efficient one. OEXS enhances its customer service initiatives through the distribution of brochures and export control-related publications. In FY99, OEXS published the brochures "BXA" and "Forms for Exporters." In addition, two popular brochures, "Introduction to Export Controls" and "How to Obtain an Export Commodity Control Number" were published in Spanish and the "Introduction to Export Controls" is available in Chinese.
In FY99, BXA received 12,650 license applications, the greatest number received since FY93 when 26,126 applications were submitted. This 18 percent increase over FY98 (when 10,693 applications were received) is a result of rapid technological advances, additions to the entities list, the easing of restrictions on humanitarian items, and the continued demand for "deemed export" applications for foreign nationals working on research and development projects in the United States. The March 15 retransfer of satellites and related items from the Department of Commerce Control List to the Department of State's United States Munitions List had very little effect on the number of applications received. The following chart provides the percentage of applications received in each category of the Commerce Control List (CCL).
In FY99, BXA completed review of 12,598 applications (this includes cases received before FY99 but completed during the fiscal year). The greatest number-of-approvals in FY99 under one commodity classification was for information security software -- 973. The greatest number of denials under one commodity classification was for EAR 99 items -- 818. Overall, we approved 9,311 applications, returned 2,124 applications without action, and denied 1,160. The high rate of denials (9 percent) was primarily due to sanctions on India and Pakistan. The following charts provide the number of applications completed in each quarter and the average processing time for that quarter.
In FY99, there was an increase in processing times of both referred and non-referred applications. The processing time for non-referred applications (14 percent of all completed applications) rose from 15 days in FY98 to 20 days in FY99; while the processing time for referred applications (86 percent of all completed applications) jumped to 43 days in FY99, up from 36 days in FY98. The average processing time for all applications was 40 days in FY99, an increase from 33 days in FY98.
While the rise in license applications certainly contributed to the overall processing time increase, BXA's participation in numerous Congressional investigations, Freedom of Information Act inquiries, and related court-ordered document searches consumed significant staff resources that otherwise would have reduced licensing processing time.
The charts below provide a five-year comparison of the percentage of referred and non-referred cases and average processing times for all cases.
The Department of Commerce, both by executive order and existing agency practice, refers certain applications, based on their level of technology, the appropriateness of the items for the stated end-use, and the country of destination, to other agencies for review and recommendation. The principal referral agencies are the Departments of Defense, Energy, and State. The Arms Control and Disarmament Agency (ACDA) was a referral agency until April 1, 1999, when it merged with State. Since the transfer of jurisdiction of commercial encryption products to Commerce, the Department of Justice and the National Security Agency (NSA) have a role in the license review process for encryption license applications.
Under Executive Order 12981, applications that are in dispute among the agencies are referred to the Operating Committee (OC), comprised of representatives of the Departments of Defense, Energy, State, and which is chaired by the Department of Commerce's representative. Prior to such dispute, certain license applications can be discussed, on a consultative basis, at State Department-chaired working-level, interagency groups that review cases subject to nuclear nonproliferation, missile technology, and chemical/biological weapons controls.
Under Executive Order 12981, the role of the OC was expanded to include the review of all license applications for which reviewing departments and agencies are not in agreement. The Commerce Chair considers the recommendations of the reviewing agencies and informs them of the Chair's decision within 14 days after receipt of the agency recommendations. Agency recommendations are required to be submitted within 30 days of receipt of the original referral from Commerce. Any reviewing agency may appeal the decision of the Chair of the OC to the Chair of the Advisory Committee on Export Policy (ACEP), which is an Assistant Secretary-level body, which is chaired by Commerce with its principal members coming from the agencies listed above. In the absence of a timely appeal, the Chair's decision will be final.
An agency must appeal a matter to the ACEP within five days of the OC's final decision. Appeals must be in writing from an official appointed by the President with consent of the Senate, or an officer properly acting in such capacity, and must cite both the statutory and regulatory bases for the appeal. Decisions of the ACEP are based on a majority vote. Any dissenting agency may appeal the decision to the Export Administration Review Board (EARB), a Cabinet-level group composed of the Secretaries of Defense, Energy and State with the Secretary of Commerce as the Chair, by submitting a letter from the head of the agency. In the absence of a timely appeal, the majority vote decision of the ACEP is final.
The Chair of the Joint Chiefs of Staff and the Director of Central Intelligence have non-voting rights as members of the EARB. Export applications considered by the EARB are resolved by a majority vote, and any agency may appeal the decision to the President. In the absence of a timely appeal, the decision of the EARB is final.
Executive Order 12981 reduced the time permitted to process a license application to 90 calendar days from the day it is submitted. After that time, final action is taken on the applications or escalated to the President for decision.
In FY 99, BXA introduced the Simplified Network Application Process (SNAP), a Web-based system that allows exporters to submit export and re-export license applications, high performance computer notices, and commodity classification requests directly to BXA through a secure environment via the Internet. As more and more exporters gravitate to SNAP, we have seen a gradual decrease in the number of applications submitted electronically using the Export License Application and Information Network (ELAIN). We have also experienced a marked decline in the receipt of paper applications.
Currently, technical specifications, import certificates, and other supporting documentation are submitted by telefax or express mail for all forms of submission. BXA currently is developing the capability to accept supporting documentation electronically.
The development of a list of entities of concern through the "Is Informed" process arose from the Enhanced Proliferation Control Initiative (EPCI) announced in 1990 to stem the spread of missile technology and nuclear, chemical, and biological weapons. Under EPCI, BXA can impose licensing requirements on exports and re-exports of goods and technology that normally do not require an export license when there is an unacceptable risk of use in or diversion to activities related to nuclear, chemical, or biological weapons or missile proliferation, even if the end-user is not primarily weapons-related.
Before an entity is added to the "Entity List," all proliferation concern activities are extensively evaluated by a BXA-chaired interagency group. This group has 14 days to determine if exports to a particular entity present an unacceptable risk of use in or diversion to missile, chemical, and biological weapons and nuclear-related proliferation activities. If a positive determination is made, the committee then decides if a licensing requirement should be imposed for otherwise "uncontrolled" items being exported to that entity. Decisions are made by a majority vote. Agencies that disagree with the majority vote may escalate the decision to the ACEP. In FY99, several entities in Russia, Pakistan, India, and the People's Republic of China were added to the List.
OEXS offers an efficient licensing mechanism for exporters who routinely make high volume shipments of pre-approved items to pre-approved destinations, end-uses, and end-users. A special license was established for these exporters to use in lieu of submitting individual applications. The increased flexibility and reduced paperwork burden on exporters and re-exporters allows U.S. firms to improve delivery timing, which gives them an edge in the new global economy.
This licensing option, titled the Special Comprehensive License (SCL), is available to experienced exporters who are reliable and have a strong corporate commitment to the development and maintenance of an Internal Control Program (ICP). Because BXA does not review each individual transaction authorized by an SCL, parties to the SCL must have the mechanisms in place to ensure that each export and re-export made under an SCL meets all the terms and conditions of the license and are in accordance with all applicable provisions of the EAR.
The SCL may authorize a number of activities, i.e., servicing, export and re-export of capital equipment, and/or exporting items for the purpose of resale and re-export. Currently, BXA has authorized 14 companies to facilitate exports and re-exports through the SCL.
The Commerce Department has established licenses that assist in the effective and efficient implementation of the Export Administration Act (EAA), as described under section 4(a)(4) of the EAA. BXA has established U.S. agency-held licenses to fulfill U.S. government roles in international cooperative projects. These licenses are crafted after the SCL structure and paperwork requirements and require an Internal Control Program. Three such licenses currently exist.
An Internal Control Program (ICP) is a mandatory requirement of the SCL and International Cooperative License. Each license holder crafts its ICP to ensure that its export and reexport procedures comply with the requirements of the license and the EAR. Elements of the ICP include customer screening, auditing, training, and record keeping. OEXS revises and distributes ICP Guidelines as well as other tools that can be used by the SCL holders in the implementation of their programs. One such tool is the SCL Holder Review Module that can be used by the companies to audit their own programs. Although this Module was developed for the SCL ICP review, it is also used by companies that do not hold SCLs. The ICP Guidelines and the Review Module are available to exporters for download from the Export Management System Compliance portion of the BXA Web site.
OEXS counsels exporters and consignees who participate in this procedure to develop and refine their ICP on an ongoing basis. The ICP has been the standard model for use by multinational companies worldwide since its implementation in 1985 and is now being requested by other countries to use as a model for establishing similar programs.
Consistent with the provisions of Section 4 of the EAA, BXA conducts periodic reviews of all active Special Licenses. The purpose of these reviews is to evaluate the adequacy of the mandatory ICPs implemented by SCL holders and consignees, and to ensure compliance with the EAR and the terms of the license. Systems Reviews are viewed not only as a compliance activity but also as an educational opportunity, since guidance is provided to the SCL holder and consignees at the time of the reviews.
An Export Management System (EMS) is an optional compliance program that companies may implement, in order to ensure compliance with the EAR and to prevent sales to end-users of concern. Establishing an EMS can greatly reduce the risk of inadvertently exporting to a prohibited end-use/user. BXA published the first EMS Guidelines in September 1992.
The EMS Guidelines include both Administrative and Screening Elements that are beneficial in developing a foundation for a compliance program within an individual firm. Through the various screening elements and checklists within the Guidelines, companies can develop ways to know their customers. The Guidelines provide suggestions for how exporters can comply with the General Prohibitions described in Part 736 of the EAR.
OEXS counsels firms on the development of EMS programs that are customized to their specific business activities. One-on-one counseling and review of draft programs have taken place at the Department of Commerce. OEXS now offers on-site EMS reviews of companies' written and operational programs. OEXS also conducts EMS workshops and seminars to educate the export community on the various tools available that can assist them in complying with the EAR.
The following chart provides a summary of System Reviews. In the 1984-1995 period, system reviews were completed under separate Special Licensing Distribution License procedures. Other Special, Project, Service Supply and Service Facility Licenses did not require ICP or system reviews. In FY96, the various "special licenses" were consolidated under the Special Comprehensive License.
| Summary Of Systems Reviews By Fiscal Year |
||||||
|---|---|---|---|---|---|---|
| 1984-95 |
1996 |
1997 |
1998 |
1999 |
Total |
|
| Domestic: | 664 |
3 |
1 |
4 |
10 |
680 |
| Foreign: | 347 |
0 |
0 |
0 |
4 |
353 |
| Mini: | 6 |
0 |
0 |
0 |
0 |
6 |
| Desk: | 29 |
1 |
19 |
10 |
4 |
64 |
| Total: | 1,046 |
4 |
20 |
14 |
18 |
1,102 |
Definitions:
Domestic: 1 or 2 day on-site visit to Special License Holder
Foreign: 1 or 2 day on-site visit to the Special License Consignee
Desk: Special License Holder, Special License Consignee, and Export
Management System reviews conducted by written correspondence
Mini: Half day on-site visit to Special License Holder
BXA has implemented a new domestic compliance program called LEAP, the License and Enforcement Action Program. This program is designed to assist the business community in understanding both its obligations and rights under the export control system. As a first step, BXA is standardizing the conditions applied to licenses. These conditions are sometimes necessary to ensure that approved items are in the correct location and used as designated in the license application. When a license carries conditions, exporters are required to notify other parties to the transaction of those conditions and to obtain a written acknowledgment from the end user overseas that they have been so informed. Other activities planned under LEAP include expanded end use visits, reviews and spot checks of license exceptions, broader information sharing with the intelligence community, and expanded outreach efforts.
In April of 2002 the Bureau of Export Administration (BXA) changed its name to the Bureau of Industry and Security(BIS). For historical purposes we have not changed the references to BXA in the legacy documents found in the Archived Press and Public Information.