The Bureau of Industry and Security and the State Department are proposing to harmonize the destination control statements required under the Export Administration Regulations and the International Traffic in Arms Regulations. The proposed rules would make a number of other changes as well. Comments on these proposed rules are due no later than July 6.
Destination Control Statements. The EAR require exporters to include a destination control statement on certain export control documents that accompany a shipment for most exports. The purpose of this statement is to alert other parties outside the United States that receive the item that the item is subject to the EAR, that the item was exported in accordance with the EAR and that diversion contrary to U.S. law is prohibited. The ITAR include the same type of requirement but specific to the ITAR context and with slightly different text. The purpose of the requirements is the same under both sets of regulations.
BIS states that because the transfer of formerly ITAR-controlled defense article parts and components to the EAR under the Export Control Reform Initiative has increased the incidence of exporters shipping articles subject to both the ITAR and the EAR in the same shipment, there has been confusion among exporters as to which destination control statement to include on such mixed shipments or whether to include both. Harmonizing these statements is thus intended to simplify export clearance requirements for exporters because they would not have to decide which statement to include. Harmonization is also an “important step” to prepare both regulators and the regulated public for the eventual creation of a single export control list and single licensing agency.
The harmonized destination control statement would adopt language that would be equally applicable under the ITAR and the EAR. The first sentence of the statement would specify that “these items are controlled and authorized by the U.S. government for export only to the specified country of ultimate destination for use by the end-user herein identified.” The term “authorized” would include exports designated as “no license required.”
The second sentence would focus on alerting the persons receiving the items that they may not be resold or transferred or otherwise be disposed of to any other country or any person other than the authorized end-user or consignee(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations. BIS states that the application of this second sentence would be different under the ITAR and the EAR due to the different types of authorizations and other approvals in the respective regulations as well as other differences, such as the de minimis requirements in the EAR.
Other Changes. Other changes proposed by BIS or State include the following.
- removing from the EAR a provision added in January 2015 that requires a special destination control statement for items controlled under ECCNs for crime control columns 1 and 3 or regional stability column 2 reasons when those items are destined to India
- adding clarifying language to various provisions of the ITAR pertaining to the export of items subject to the EAR pursuant to a Department of State authorization when such exports are made in conjunction with items subject to the ITAR (including guidance on the use of licensing exemptions as well as clarification that items subject to the EAR are not considered defense articles even when exported under a license or other approval (to include exemptions) issued by State)
- clarifyingwhen exports may be made to or on behalf of a U.S. government agency without a license and expanding this exemption to allow for permanent, not just temporary, exports
- clarifying how parties may obtain authorization from State to export or retransfer items subject to the EAR
- removing from the ITAR the requirement to provide seven paper copies for various export license requests, which has not been necessary for many years due to the use of electronic license submissions
- removing the pilot filing requirement in the ITAR because it does not take into account the practices of modern airport operations and is no longer necessary
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