BIS Amends, Updates EAR Provisions Relating to ECRA, Enforcement

The Bureau of Industry and Security amended and clarified provisions in the Export Administration Regulations to promote compliance and better enforce the Export Control Reform Act. BIS also amended other EAR provisions related to licenses, denial orders and civil penalty payments. The changes, outlined in a final rule issued Nov. 17, take effect Nov. 18.

Many changes update or remove language related to the lapsed Export Administration Act of 1979, replacing the wording with references to ECRA and other export laws. Other changes amend the EAR to implement a range of enforcement provisions, including prelicense checks (PLCs); post-shipment verifications (PSVs); BIS’s overseas investigative authority; searches, inspections, detentions, and seizures, and related authorities concerning exports, reexports and transfers; inspection of books, records, and other information; and violations and penalties under ECRA.

The rule also contains changes unrelated to the implementation of ECRA. BIS amended EAR language to clarify that any license obtained on “a false or misleading misrepresentation or the falsification or concealment of a material fact” is “void as of the date of issuance.” The agency also changed the maximum time period to pay civil penalties -- “as a condition of receiving certain privileges under the EAR” -- from one year to two years. Another change specifies that the Office of Export Enforcement director is the “designated” BIS official responsible for issuing export denial orders and “determining the terms of such orders.”

BIS clarified that results of PLC and PSV checks outside the U.S. will be “communicated” to licensing officials “within existing timeframes governing the conduct of PLCs” and will be considered in determining the outcome of a license application. The agency also amended the EAR to specify that people located outside the U.S. “must produce for inspection” records required to be kept under the EAR, and only BIS-designated U.S. officials can require people outside the U.S. to produce those records.

In doing so, the agency removed references in the EAR “to the authority” of the U.S. Customs Service or a “Foreign Service Post,” but it said the change “does not affect the authorities of other agencies or officials under other statutes and regulations.” Similar changes were made to BIS’s overseas export enforcement investigations authorities -- BIS removed an EAR provision that described U.S. Customs Service authority “to designate the time and place of export clearance.” BIS said that authority is not reflected in ECRA.