Assistant Secretary of Commerce for Export Enforcement David Mills recently gave an update on the Bureau of Industry and Security’s export enforcement efforts amid the ongoing Export Control Reform initiative. Mills asserted that “strong enforcement is good for legitimate U.S. business by ensuring that all companies that invest in an export compliance program are placed on a level playing field against their competitors.”
Mills said the Information Triage Unit provides information to licensing officers on the bona fides of foreign parties to the most sensitive license applications. This “actually facilitates interagency review of your license applications,” he told the audience, because it allows the interagency review process to focus on the policy aspects of approving the export instead of “debating the facts about the parties.” The ITU supported approximately 1,000 licenses in 2014.
Mills also highlighted the role of the Export Enforcement Coordination Center in ensuring that export enforcement-related activities are deconflicted among federal agencies and that the lead investigative agency has access to all relevant information from other agencies. The E2C2 has deconflicted almost 3,500 activities over the past 18 months, finding that more than 50 percent of the time another agency had information to support the investigation. Mills said this has encouraged information sharing and broadened the array of criminal and administrative tools that can be employed to enforce export control regulations.
BIS is also “expanding our footprint across the United States with the assistance of our law enforcement partners,” Mills added, and now has export enforcement agents in 15 cities responsible for a majority of U.S. high technology exports. BIS has placed agents in Atlanta, Cincinnati, Minneapolis, Phoenix, Portland and San Antonio, where they are co-located with other federal enforcement agencies, in addition to its existing offices in Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, San Jose and Washington. More than a third of all BIS investigations are now jointly conducted.
Overseas, BIS worked with the Foreign Commercial Service to conduct a record 1,044 end-use checks in 51 countries in 2014. Mills noted that the majority of these checks were conducted in countries proximate to where the BIS’ seven export control officers reside: China, Russia, India, Hong Kong, Singapore and the United Arab Emirates. In addition, almost one-third of these checks were conducted in countries that are eligible for license exception Strategic Trade Authorization. “With the transfer of military and satellite items to BIS’s jurisdiction and our increasing focus on unauthorized military modernization,” Mills said, “our end-use check program is critical in safeguarding exports from onward diversion, including where authorizations such as STA are eligible.”
Finally, Mills said, BIS has been working closely with three of the most important transshipment countries – Hong Kong, Singapore and the UAE – to increase the effectiveness of their export control systems. In 2014, BIS developed best practices for exporters that included guidance for complying with these countries’ export control rules. For example, Hong Kong requires an import and export license for all multilaterally controlled items, Singapore requires an export permit for the transshipment and transit of certain items through its free trade zone, and the UAE recently adopted controls on dual-use nuclear items requiring an import and export permit. More recently, BIS changed its regulations to complement Hong Kong’s import license requirement by imposing an export license on certain national security-controlled items.