BIS adds Hong Kong documentation requirements for exports/re-exports

On January, 19, 2017 the Department of Commerce, Bureau of Industry and Security (BIS) published a final rule (82 FR 6216-6218) which will require, in certain cases, that documents be obtained prior to exporting to Hong Kong or re-exporting from Hong Kong (HK).  BIS issued this rule to provide more assurance that items subject to multilateral control regimes, that pass through HK, are appropriately authorized to their final destination. 

Export Administration Regulation (EAR) regulated items, controlled on the Commerce Control List (CCL) for national security (NS), missile technology (MT), nuclear non-proliferation (NP column 1), or chemical and biological weapons (CB) will now be required to obtain, prior to export or re-export, a copy of a Hong Kong import license.  If a license is not required the exporter or re-exporter will be required to obtain a statement from the Hong Kong government that a license is not required.

This rule will be effective on April 19, 2017.

 

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BIS Harmonization of Destination Control Statements

On August 17, 2016 the Department of Commerce, Bureau of Industry and Security (BIS) published a final rule (81 FR 54721-54732) that implements changes recommended in a May 22, 2015 proposed rule (80 FR 29551-29554).  The rule revises the destination control statement in Sect 758.6 of the Export Administration Regulations (EAR).  The rule harmonizes the EAR statement with the destination control statement required for the export of items subject to the International Traffic in Arms Regulations (ITAR). 

The revised destination control statement reads as follows:

"These items are controlled by the U.S. Government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end user(s) herein identified.  They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(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"

The rule is effective November 15, 2016.

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BIS Revises Guidance Regarding EAR Enforcement Cases

On Wednesday, June 22 the Department of Commerce, Bureau of Industry and Security (BIS) published (81 FR 40499-40511) updated guidance (found in Supplement No. 1 to part 766) regarding violations of the Export Administration Regulations (EAR). 

The guidance amends the EAR to make civil penalty decisions more transparent and aligns them with the Treasury Department's Office of Foreign Assets Control (OFAC). 

OFAC criminal penalties can reach 20 years imprisonment and $1 million per violation.  OFAC civil penalties use the transaction value as the starting point and can reach $250,000 or twice the value of the transaction, whichever is greater (Economic Sanctions Enforcement Guidelines). 

The updated guidance does not apply to alleged violations under part 760 of the EAR - Restrictive Trade Practices and Boycotts or to cases that are pending prior to July 22, 2016. 

The effective date of the final rule change is July 22, 2016. 

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