The United States imposes export controls to protect national security interests and promote foreign policy objectives related to dual-use items and less-sensitive military items through the Export Administration Regulations (EAR) (15 CFR Parts 730 – 774). The Bureau of Industry and Security (BIS) is responsible for regulating, implementing, and enforcing export controls for such dual-use items and less sensitive military items. Within BIS, Export Administration (EA) is responsible for processing license applications, counseling exporters, and drafting and publishing changes to the EAR; and Export Enforcement (EE) is responsible for compliance monitoring and enforcement of the EAR. BIS works closely with U.S. embassies, foreign governments, industry, and trade associations to ensure that the export, reexport and transfer (in-country) of items subject to the EAR is accomplished in compliance with the regulations.
Enforcement
BIS officials conduct site visits, known as End-Use Checks (EUCs), globally with end-users, consignees, and/or other parties related to transactions involving items subject to the EAR and shipped under a license or another form of BIS authorization to verify compliance with the EAR and the conditions of the license or authorization. An EUC is an on-site verification of a non-U.S. party to a transaction to determine whether the party is a reliable recipient of items subject to the EAR. EUCs are conducted as part of BIS’s licensing process, as well as its compliance program, to determine if items were exported in accordance with a valid BIS authorization or otherwise consistent with the EAR. Specifically, an EUC verifies the bona fides of transactions subject to the EAR, including confirming the legitimacy and reliability of the end use and end user; monitoring compliance with license conditions; and ensuring items are exported, reexported or transferred (in-country) in accordance with the EAR. These checks might be completed prior to the export of items pursuant to a BIS export license in the form of a Pre-License Check (PLC) or following an export during a Post-Shipment Verification (PSV), regardless of whether a BIS license is required.
BIS officials rely on EUCs to safeguard items subject to the EAR from diversion to unauthorized end uses/users and destinations. The verification of a foreign party’s reliability facilitates future trade, including during BIS license reviews. If BIS is unable to verify the reliability of the company or is prevented from accomplishing an EUC, the company may receive, for example, more regulatory scrutiny during license application reviews or be designated on BIS’s Unverified List or Entity List, as applicable.
Guidance and Training
BIS has developed a list of “red flags”, or warning signs, and compiled “Know Your Customer” guidance intended to aid exporters in identifying possible violations of the EAR. Both resources are publicly available, and their dissemination to industry members is highly encouraged to help promote EAR compliance.
BIS also provides a variety of training sessions for exporters throughout the year. These sessions range from one to two-day seminars that focus on the basics of exporting to coverage of more advanced, industry specific topics. Interested parties can check a list of upcoming seminars and webinars or reference BIS’s online training site. BIS’s Export Control Officers (ECOs) located at U.S. embassies and consulates in seven overseas locations also conduct outreach to raise awareness of reexport and transfer (in-country) requirements with foreign business communities.
Commerce Control List
The EAR regulates transactions involving the export, reexport, or transfer (in-country) of “dual-use” and less sensitive military items (commodities, software, and technology) as well as certain U.S. person activities. Items subject to BIS’s jurisdiction include items found on the Commerce Control List (supplement no. 1 to part 774 of the EAR) (CCL); items on the CCL are listed under individual entry by Export Control Classification Number (ECCN). The EAR also regulates items designated as ‘EAR99’ (a broad basket category of items generally consisting of low-technology consumer goods not listed under an ECCN on the CCL but subject to BIS’s jurisdiction). For advice and regulatory requirements on items under the export control jurisdiction of other U.S. Government agencies, exporters should consult other U.S. Government agencies. For example, the U.S. Department of State’s Directorate of Defense Trade Controls has authority over the defense articles and defense services that are not subject to the EAR. A list of other agencies involved in export controls can be found on the BIS website and in Supplement No. 3 to Part 730 of the EAR.
The EAR is available on the BIS website and on the e-CFR (Electronic Code of Federal Regulations) and is updated as needed.
Consolidated Screening List
The Consolidated Screening List (CSL), available on the International Trade Administration’s Trade.gov website, is a list of parties for which the United States Government maintains restrictions or prohibitions on certain exports, reexports or transfers of items. The CSL consolidates eleven export screening lists implemented by the Departments of Commerce, State, and the Treasury into a single data feed as an aid to industry in conducting electronic screening of parties to regulated transactions. Exporters should determine the export requirements specific to their proposed transaction by classifying their items prior to export and reviewing the EAR’s requirements specific to the item(s) and the proposed end use and end user, as well as consulting the CSL to determine if any parties to the transaction may be subject to specific license requirements.
Assistance is available from BIS by calling one of the following numbers:
- 202) 482-4811 – Outreach and Educational Services Division (located in Washington, DC – open Monday-Friday, 8:30 am-5:00 pm ET);
- (949) 660-0144 – Western Regional Office (located in Irvine, CA – open Monday-Friday, 8:00 am-5:00 pm PT); or
- (408) 998-8806 – Northern California branch (located in San Jose, CA – open Monday-Friday, 8:00am-5:00 pm PT).
You may also e-mail your inquiry to the Export Counseling Division of the Office of Exporter Services at ECDOEXS@bis.doc.gov.
Contact information for BIS’s overseas ECOs can be found at: https://www.bis.doc.gov/index.php/enforcement/oea/eco
BIS Export Control Officers (Beijing, China):
Tel: (86) (10) 8531-3301
Tel: (86) (10) 8531-4484
Select Legislation, Executive Orders, or Regulatory Actions Impacting Exports or Reexports to China
In 1990, the U.S. Congress passed P.L. 101-246, Title IX, which is commonly referred to as the “Tiananmen Square Sanctions.” Among other things, this law restricts the U.S. licensing of exports and reexports of crime control and crime detection equipment and instruments listed in the EAR to China, as well as the licensing of defense articles and defense services subject to the International Traffic in Arms Regulations (ITAR). These restrictions apply regardless of the end user in China. Pursuant to § 742.6(b)(1)(i) of the EAR, exports of certain 9x515 and “600 series” items are also reviewed in accordance with ITAR policy in 22 CFR 126.1
In addition, although foreign-made items incorporating less than 25% controlled U.S.-origin content are generally not subject to the EAR for purposes of export or reexport to China, there is no de minimis for exports to China of foreign made items incorporating U.S.-origin “600-series” and 9x515 content. Items classified under these ECCNs were previously listed on the United States Munitions List (USML) and cannot be exported to China without prior authorization. Certain direct products of U.S.-origin national security-controlled or “600-series” or 9E515 technology are also subject to the EAR (see section 736.2(b)(3) of the EAR). Additionally, pursuant to footnote 1 to Supplement No. 4 to part 744 of the EAR, foreign-produced items are subject to a licensing requirement for their reexport, export from abroad, or transfer (in country) when there is knowledge that they will be incorporated into, or will be used in the “production” or “development” of any “part” “component” or equipment produced, purchased, or ordered by any entity on the Entity List with a footnote 1 designation or when any entity with a footnote 1 designation is a party to the transaction and are:
a) The direct product of “technology” or “software” that is subject to the EAR and specified in ECCNs 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D991, 5E001, or 5E991; or
b) Produced by any plant or major component of a plant that is located outside the United States, when the plant or major component of a plant, whether made in the United States. or a foreign country, itself is a direct product of U.S.-origin “technology” or “software” subject to the EAR that is specified in certain ECCNs 3D001, 3D991, 3E001, 3E002, 3E003, 3E991, 4D001, 4D993, 4D994, 4E001, 4E992, 4E993, 5D001, 5D991, 5E001, or 5E991.
The Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) expands the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS) to address growing national security concerns over foreign exploitation of certain investment structures which traditionally have fallen outside of CFIUS jurisdiction. While China is not mentioned specifically in FIRRMA, Chinese investment in the United States may be subject to CFIUS review. Through FIRRMA, CFIUS jurisdiction now includes foreign investment into the United States as well as acquisitions, which results in increased review of potential investments, including Chinese investments, in areas related to critical technologies, critical infrastructure, businesses with sensitive personal data, and certain types of real estate transaction.
Related Controls
Other U.S. agencies also regulate exports of items. For example, the U.S. Department of State’s Directorate of Defense Trade Controls administers U.S. export controls covering defense articles and defense services that appear on the USML under the ITAR. Information on U.S. Department of State export licensing procedures, the ITAR, and the Arms Export Control Act can be found at Tel: (202) 663-1282.
The point of contact for U.S. Department of State licensing issues at the U.S. Embassy Beijing is the Economic Section, Tel: (86) (10) 8531-3000, Fax: (86) (10) 8531-4949.
The Department of Energy, Nuclear Regulatory Commission, FDA, and other agencies may also control and license the export of specified items to China. The Department of Homeland Security, Customs and Border Protection enforces a number of Withhold Release Orders (WRO) issued against specified Xinjiang-produced products.