BIS Official Calls for More Use of License Exception STA, Detailed Export Applications

More exporters should make use of License Exception STA (Strategic Trade Authorization), which could reduce workload for the government and allow certain exports to move faster, officials from the Commerce and Defense departments said. “Frankly, it's not utilized as much as we would like it to be utilized,” Matt Borman, an official with Commerce’s Bureau of Industry and Security, said during a Sept. 27 defense industry conference hosted by IDEEA. “To anyone who's considering STA-eligible exports, please, please use them as opposed to having your U.S. supplier come in and go through the traditional licensing process.”

License Exception STA authorizes certain exports to trusted U.S. allies if the foreign importer certifies that they won’t reexport the item outside a list of STA countries, which are “essentially our allies,” Borman said. The exception frees up the interagency from reviewing and approving some license applications, a process which can sometimes lead to delays, said Michael Laychak, director of DOD’s Defense Technology Security Administration, DTSA.

“This is a tool, an ability for industry to use this tool to help expedite and speed up processes,” Laychak said. But, he said, “there’s a hesitancy within the industry” to use the exception and other open general export licenses. “I don't know if it's [a lack of understanding] of the benefits or appreciation of what they can use those various OGELs or the exceptions for,” Laychak said. “But I think it's critical for organizations like yourselves and governments to make sure that industry understands the ability to take advantage of these various types of procedures.”

BIS has noticed that exporters would rather proceed cautiously by seeking a specific approval from the agency as opposed to relying on the exception, Borman said. “I think more use of STA" and other open general licenses "is really where we want to be going, both as a government but also as industry,” Borman said.

Asked about what else exporters can do better when shipping goods, Borman said companies should include as much detail as possible about their export in their license applications. Companies should “assume no knowledge” among government agencies and “explain the technology, explain the business context so we have the full picture,” he said, which reduces the likelihood of license delays.

The agencies reviewing the application “need to make sure that we're operating off the same set of facts,” Borman said. “The thing that will hold your license application up the most is when one of the agencies says, ‘wait, I don’t really understand this.’ We then have to put the pause button on and go back to you and ask more questions. That, by definition, will slow you up by weeks to months.”

He also urged companies to talk to BIS “about the technology road maps you have and the markets you foresee,” which will help the agency better craft technology controls. Although the government has “a lot of really smart engineers and policy analysts and scientists,” Borman said, “we can't possibly know what you know in terms of the technology development and the markets and the foreign competitors.”

“We're much better off being informed and making sure we're hitting the target than being too broad or too narrow,” Borman said. “And the way we will almost for sure be too broad is if we don't get the input.”

Laychak also called for better communication between DTSA and industry, which will help the agency better evaluate licenses and technology transfers. Although there are “some areas where we actually have great ongoing discussions and relationships” with industry, he said, "honest and open communication is an area where, from my perspective, [it] has been hit or miss.”