Category Archives: Export Controls

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The Undoing Project – Why NAFTA Can’t Be Undone, But Can Be Re-Done

[Note, this article was originally posted on January 12 to the Global Trade Law Blog and has been updated to reflect recent events.] President Trump is making moves to renegotiate NAFTA, but has indicated that if negotiations fail, the United States may give notice of its intent to withdraw from the Agreement. Once in office … Continue Reading

“The Song Remains the Same” – DFARS Removes and Replaces Restrictions on Export Controls

By David Gallacher  Earlier this month, we wrote about a new proposed rule from the Department of Energy imposing new and onerous requirements relating to compliance with the U.S. export control laws. DOE claimed that this proposed rule was modeled on a prior rule included in the Department of Defense Federal Acquisition Regulation Supplement (DFARS) … Continue Reading

DOE Proposes Highly Burdensome Reporting Obligations With Respect To Export Compliance

By John W. Chierichella On September 8, 2008, we posted a commentary on a newly promulgated interim rule relating to “Export-Controlled Items,” that was finalized in 2010 and is now set forth at DFARS Subpart 204.73 and implemented in principal part by the clause set forth at 52.204-7008. Click here. That rule was relatively straightforward, … Continue Reading

2011 Year In Review: Export Controls and Promised Reforms

By: David S. Gallacher 2011 was a banner year for U.S. export control laws. The Obama administration has vowed to streamline and reform the bloated U.S. export control system – promising to build "higher walls" around a narrower universe of goods and technologies requiring export licenses. Following is a summary of ten of the key … Continue Reading

OFAC, BIS Double Up Flow Serve: What the Flowserve Settlement Says About Corporate Compliance Programs

By Thaddeus McBride, Mark Jensen, & Corey Phelps In late September, Flowserve Corporation (“Flowserve”) and a number of its subsidiaries agreed to settle alleged export violations with the Department of Commerce, Bureau of Industry of Security (“BIS”) for $2.5 million, and to remit $502,408 to the U.S. Department of the Treasury, Office of Foreign Assets Control … Continue Reading

Prison Time and Export Controls: University Professor’s Case Illustrates Dangers of Ignoring Export Compliance

By Thaddeus McBride & Reid Whitten On Monday, October 3, the U.S. Supreme Court declined to hear the appeal of retired University of Tennessee professor John Reece Roth. In July 2009, Roth received a four year prison sentence for illegally exporting military technology, in large part due to his work with graduate students from Iran and … Continue Reading

Technology Exports: Uncertainty Around Form I-129 Persists

By Thaddeus McBride, Mark L. Jensen and Corey Phelps Beginning on February 20, 2011, the U.S. Bureau of Citizenship and Immigration Services (“CIS”) assumed a role in the U.S. Government’s increasing regulation of technology exports. The new role for CIS relates to the transfer of controlled technology or source code, sometimes referred to as “deemed exports," … Continue Reading

New ITAR Rule on Transfer of Defense Articles to Dual and Third-Country Nationals Creates Substantial New Compliance Obligations

By John M. Hynes On May 16, 2011, the Department of State (“Department”) published its final rule in the Federal Register amending provisions of the International Traffic in Arms Regulations (“ITAR”) regarding the transfer of ITAR controlled defense articles (including technical data) to dual and third-country nationals employed by approved foreign end-users.  See 76 Fed. … Continue Reading

The Department Of State Seeks To Narrow The ITAR Definition Of “Defense Service”

By John M. Hynes On April 13, 2011, the Department of State (the “Department”) issued proposed amendments to various sections of the International Traffic in Arms Regulations (“ITAR”) regarding the definition of “defense service.” See International Traffic in Arms Regulations: Defense Services, 76 Fed. Reg. 20590-93 (amending 22 C.F.R. Parts 120 and 124).  … Continue Reading

Proposed ITAR Rule To Relax ITAR Licensing For Components Incorporated Into Commercial Products

By Curtis M. Dombek On March 15, 2011, the State Department Directorate of Defense Trade Controls published a proposed new rule that marks a significant change in the approach to ITAR regulation. Historically, ITAR controls have always applied to commercial end products incorporating any ITAR controlled components. This was the basis of the highly publicized QRS chip case, … Continue Reading

New Sanctions Block Continuing Performance Of Libyan Government Contracts In Addition To Targeting Col. Qadhafi’s Assets

By Curtis M. Dombek On February 25, 2011, the President issued an Executive Order blocking not only the assets of Muammar Qadhafi, Ayesha Qadhafi, Khamis Qadhafi, Mutassim Qadhafi, and Saif Al Islam Al Qadhafi, but also blocking all assets of the Government of Libya, as follows:   “All property and interests in property that are in the … Continue Reading

Sheppard Mullin Partner Curt Dombek Appointed To The President’s Export Council Subcommittee On Export Administration

On February 23, 2011, Commerce Secretary Gary Locke announced the appointment of Sheppard Mullin partner Curt Dombek to the President’s Export Council Subcommittee on Export Administration (“PECSEA”), which will advise the Commerce Department on the administration’s export control reform initiative.  … Continue Reading

Implementation Of CISADA: New FAR Requirements

By Jessica M. Madon Effective September 29, 2010, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (“FAR Councils”) issued an interim rule amending the FAR to implement sections of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”), signed into law on July 1, 2010. 75 Fed. Reg. 60254 (Sept. 29, 2010). … Continue Reading

Comprehensive Iran Sanctions, Accountability, And Divestment Act Of 2010 – The Expanded Categories Of Sanctionable Activities

By John W. Chierichella and Jessica M. Madon As a follow-up to our previous blog article, available here, we provide this month a more in depth analysis of some of the key features of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”) passed July 1, 2010. Our focus this month is on the expansion … Continue Reading

New Iranian Sanctions Legislation: Summary of Key Provisions

By John W. Chierichella and Jessica M. Madon On July 1, 2010, President Obama signed the Comprehensive Iran Sanction, Accountability, and Divestment Act of 2010 (“CISADA”). CISADA expands many existing restrictions and includes many new provisions designed to reach foreign firms currently doing business with Iran. More details into the impact of this legislation will emerge as the … Continue Reading

New Encryption Export Rules Relax Regulatory Burden For Many End-Products But Also Raise Many New Questions

By Curtis M. Dombek On June 25, 2010, the Administration issued the long-awaited regulations implementing the changes from the last Wassenaar Plenary Session and seeking to reduce the regulatory burden on exporters of encryption products under the ENC license exception.  See Encryption Export Controls:  Revision of License Exception ENC and Mass Market Eligibility, Submission Procedures, … Continue Reading

BIS Issues New Export Controls on Millimeter Wave Security Equipment, Software and Technology

By Curtis M. Dombek On March 25, 2010, the Bureau of Industry and Security ("BIS") created three new Export Control Classification Numbers ("ECCNs") to control security equipment using specified types of millimeter wave technology, including related software and technology, for regional stability and anti-terrorist reasons. New ECCN 2A984 has been added to the Commerce Control … Continue Reading

Administration to Expedite Encryption Reviews and Amend ITAR Citizenship Definition

In comments released on March 12, 2010, the Administration announced that it will be shifting the current encryption review request process under 15 C.F.R. section 740.17 to an on-line system, with the objective of reducing review times from 30-60 days to 30 minutes. While industry will welcome the shortening of the review waiting period, the … Continue Reading

Treasury Issues Final Rules Describing Procedures For Reviewing Foreign Investment In U.S. Companies

Effective December 22, 2008, the U.S. Department of the Treasury (“Treasury”) issued new rules relating to the procedures that the Committee on Foreign Investment in the United States (“CFIUS” or “the Committee”) will use in reviewing foreign investments in U.S. companies.  See 73 Fed. Reg. 70702.  The revised, final rules continue to focus on the … Continue Reading

Department Of Commerce Proposes New Rule For Intra-Company Transfers

On October 3, 2008, the U.S. Department of Commerce, Bureau of Industry and Security ("BIS") published a proposed rule on a new export license exception authorizing intra-company transfers ("ICT") of products, software and technology restricted under the Export Administration Regulations ("EAR") (15 CFR Parts 730-772).  73 Federal Register 57554.  The proposed rule is similar, in … Continue Reading

Encryption Export Restrictions Loosened Under New Rules That Reduce Pre-Review And Reporting Requirements

On October 3, 2008, the U.S. Department of Commerce, Bureau of Industry and Security ("BIS") published new interim rules, effective immediately, rewriting and altering the export regulations on encryption items (specifically, the encryption restrictions at EAR 742.15 and the ENC license exception at EAR 740.17).  73 Federal Register 54795.  BIS hopes that the new rules … Continue Reading
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