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BIS Implementation of Export Control Reform Needs Some Improvements, Report Says

Friday, September 19, 2014
Sandler, Travis & Rosenberg Trade Report

A recent report from the Department of Commerce’s Office of Inspector General identifies several improvements that the Bureau of Industry and Security could make in its implementation of the Export Control Reform Initiative. ECR was launched in April 2010 to streamline the U.S. export control system by creating a single licensing agency, a single list of controlled items, a single information technology platform and a single export en­forcement coordination agency. Highlights of the report’s findings include the following.

Licensing Workload. BIS has adequate resources at this time to handle the gradually increasing export licensing workload for new munitions and satellite items that is coming as a result of ECR (increases of 29,000 and 1,500 applications, respectively). However, OIG found weaknesses in the way BIS tracks the receipt and delivery of license determination requests from other U.S. government export enforcement agencies. BIS therefore needs to do more work to determine whether it will require more or less staff once the transition of items from the U.S. Munitions List to the Commerce Control List is complete.

Processing Times. Average license determination processing times could not be fully calculated due to data errors; an OIG examination found that in fiscal year 2013, 218 cases (more than 10 percent of the total) were missing data and 28 listed completion dates that occurred before the date of receipt. According to the Department of Homeland Security, license determinations referred to BIS in 2013 had longer average processing times than those sent to the departments of State or Treasury. BIS officials say they plan to automate the process of tracking license determinations to better evaluate compliance with its requirement to complete them within 35 days.

New IT System. Delays in migrating to the IT system used by the departments of Defense and State to process export license applications (USXPORTS), which is now in its third year, may cost BIS $1.3 million per quarter in FY 2015 to continue operating its current system (ECASS), which was developed in 1984. End-to-end testing of USXPORTS completed in August uncovered several development and programming issues that DOD must resolve. The report states that because USXPORTS will only incorporate license processing and referrals, BIS has developed a separate system (the Commerce USXPORTS Export Support System) to support other important export enforcement and technical licensing determination functions that historically resided on ECASS and to serve and a backup system should USXPORTS fail.

Enforcement. BIS’ plans for increasing the number of export enforcement actions by nearly 30 percent (to 1,100) and the number of end-use checks by more than 20 percent (to 1,030) by adding 22 full-time equivalent positions are reasonable and in line with increased performance goals. However, U.S. and Foreign Commercial Service commercial officers would benefit from more robust, up-to-date online training materials on how to conduct end-use checks. While BIS provides such training as part of the initial training for such officers, it may be years before they actually conduct an end-use check, risking the possibility that the initial training may be outdated or not retained. In addition, the content of the initial training is not available on the Commerce Learning Center nor on ITA’s intranet, requiring officers to instead consult a manual.

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