If it seems like export compliance regulations change a lot, you’re right—they do. Sometimes minor tweaks are made, but in other cases, comprehensive changes occur with wide-ranging ramifications. Whether your company’s exports are governed by the Export Administration Regulations (EAR), the International Traffic in Arms Regulations (ITAR) or other agencies, changes to regulations can come at any time and have a significant impact on your international business.
It would be great if updates were made on a set schedule, but unfortunately, that doesn’t happen. For federal regulations, government agencies normally must go through a formal process involving a public notice of proposed changes, a comment period when input from the public is solicited, a review of comments received, the incorporation of certain considerations into the proposed changes and finally, the publication of the revised rules. From start to finish, this notice-and-comment process often takes months or even years to complete. But many export control rules are published and go into effect immediately because they are exempt from this standard process as a foreign affairs function of the government. For example, when the Bureau of Industry and Security (BIS) recently amended the EAR to modify restrictions on the export of encryption, that decision was effective the very same day.
Breadth Leads to More Updates
The EAR tends to have the most changes because to some extent, it impacts nearly every industry. The scope of the EAR’s 600-page Commerce Control List (CCL) is broad, so there tends to be more frequent changes to the EAR. In any given year, dozens of Export Control Classification Numbers (ECCNs) may be modified, added, or deleted which adjust controls on thousands of items as well as on related software and technology. The industries most affected by changes to EAR include:
- Software (including encryption)
- Manufacturing equipment
- Life sciences
Export regulation changes can be made for a variety of reasons. One recent example is when the BIS amended the Military End Use and Military End User (MEU) Rule in 2020. Taken together, these changes greatly expanded the MEU Rule so that it now applies to many more exporters and more transactions. The rule now covers most civil aircraft parts, a top U.S. export, as well as mass market encryption devices and software, various common electronic components, and parts specially designed for all kinds of marine applications. BIS also introduced a non-exhaustive list of military end users that automatically triggers an export license requirement on exports of certain items to these listed entities.
Another common change to the EAR is in its country policies. For example, Sudan had been designated as a state sponsor of terrorism for some time and recently that designation was removed. When this occurred, an amendment was made to the EAR that now allows more goods to be exported to Sudan without a license. Regulations for Burma, China, Cyprus, Mexico, Russia, and Ukraine have all been altered in recent months.
The ITAR governs the most sensitive military equipment, software, technology, and services. Narrower in scope than the EAR, the ITAR regulates only about 2% of exports from the U.S. As a result, the ITAR primarily impacts the defense and space industries. A recent example of a regulatory change to ITAR was when Russia was added to the list of countries under an arms embargo. This change prohibits most military technology from being exported to Russia.
Export regulations under both EAR and ITAR revolve around control lists that enumerate the items or technology that are subject to control under their respective rules. The items on the CCL change many times during a year. ITAR’s United States Munitions List (USML) also changes, but less frequently.
Setting Up Alerts for Export Regulation Changes
All agency changes made to export regulations are published in the Federal Register (https://www.federalregister.gov/). The Office of the Federal Register, National Archives and Records Administration (NARA) publishes it daily and it serves as the official publication for rules, proposed rules, and notices of federal agencies and organizations, as well as executive orders and other presidential documents. Although most export control amendments are effective immediately, they also can be announced with a delayed effective date of 30, 60, 90 or more days. BIS and the Directorate of Defense Trade Controls (DDTC) also publish proposed rules in the Federal Register and ask for public comment on the agencies’ proposals.
The Federal Register website is user-friendly and enables you to set up a free account for subscriptions on topics of interest. When doing so, you also can request email alerts on all documents from an agency, or set more specific alert parameters by country or even by the ECCN that controls items relevant to your organization. If an amendment is made referencing a selected country, ECCN, or another keyword, you will be alerted immediately when it is published.
Another way to stay current on export regulation changes is to request generalized broad alerts directly from a pertinent federal agency that maintains its own email list. However, agencies vary in how they handle communications, so the Federal Register tends to be a more reliable source for changes.
ECTI Simplifies the Process of Staying Current on Export Rule Changes
Many people who attend our ECTI seminars have other responsibilities in addition to managing and monitoring their company’s export functions. They understand that staying up-to-date on export regulation amendments is an important part of their job. These professionals want to know quickly if anything is changing and how it could impact their company and its exports.
At ECTI, we offer webinars twice a year that specifically focus on recent developments or changes to EAR, ITAR and Office of Foreign Assets Control (OFAC) sanctions regulations. We also incorporate recent regulatory changes in all our live seminars and highlight these developments in a dedicated presentation. We compile the latest amendments so you don’t have to do the legwork.
Our experienced instructors highlight what is critically important about the revised regulations, saving you the time and effort that would be required to sift through numerous pages of text to find what’s applicable to your company’s situation. Our instructors provide the context for export regulation changes and they help you understand their magnitude and whether complying with specific changes should be a priority for your company.
Keeping current on export regulation changes can seem like a never-ending process. That’s why our team at ECTI strives to make it easier for you be up-to-date and knowledgeable about the critical export regulation changes that can impact your business. Check out our latest tools & resources here.
Do you have questions about how best to keep track of changes to export regulations that affect your company’s export activities? ECTI can help you easily stay current with changes to export regulations. Visit www.learnexportcompliance.com to learn about our company, our faculty, our staff and our esteemed Export Compliance Professional (ECoP®) certification program. To find upcoming e-seminars, live seminars and live webinars and browse our catalog of 80-plus on-demand webinars, visit our ECTI Academy. You can also call the Export Compliance Training Institute at 540-433-3977 for more information.
Scott Gearity is President of ECTI, Inc.