DDTC Revises FAQs regarding US Persons abroad

On April 6, 2020 the U.S. Department of State, Directorate of Defense Trade Controls (DDTC) issued updated FAQs regarding US persons abroad and requests for authorization to provide defense services. The FAQs and published responses state:

1. Q: “If I request authorization for defense services that describe my current employment, do I need to cease the activities that constitute defense services until I receive authorization from DDTC?”

   A: “An applicant may proceed with the described activities on a provisional basis unless otherwise notified by DDTC.  U.S. persons who believe they may have been furnishing defense services without authorization and request authorization for current or future defense services may disclose their activities as part of their request for authorization in lieu of submitting a separate voluntary disclosure to DTCC. Such disclosures will be treated as voluntary disclosures pursuant to ITAR § 127.12 and should contain the information requested in § 127.12(c)(2).”

2. Q: “Will DDTC provide a “safe harbor” period for US persons who request authorization for defense services they are currently performing without a license?”

   A: “DDTC encourages regulated persons to obtain all required authorizations for their activities, given the U.S. national security and foreign policy reasons for which defense services are regulated. U.S. persons who believe they may have been furnishing defense services without authorization, and request authorization for current or future defense services, may disclose their activities in conjunction with their request for authorization. Such disclosures will be treated as voluntary disclosures pursuant to ITAR § 127.12 and should contain the information requested in § 127.12(c)(2). To the extent that DDTC learns of the prior unauthorized furnishing of defense services in a disclosure, the facts will be reviewed subject to the totality of the facts and circumstances. DTCC will consider the non-adoption of the 2015 proposed rule, as well as the recent promulgation of this FAQ guidance and good faith efforts by an applicant to comply with the ITAR.”

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References

1. DDTC - Licensing FAQs 1 - 04/06/2020.

2. DDTC - Licensing FAQs 2 - 04/06/2020.

US DOJ Revises Export Control and Sanctions Enforcement Policy

On December 13, 2019 the US Department of Justice (“DOJ”) re-issued a revised Voluntary Self-Disclosure Policy(1) (“VSD Policy”) for export control and sanctions violations. The revised VSD Policy is effective December 13, 2019 and it supersedes prior guidance issued by the US DOJ’s National Security Division in October 2016. The updated VSD Policy will be incorporated into the Justice Manual(2). Three changes from the prior guidance include(3):

• Provides more clarity on the benefits available to companies that voluntarily self-disclose violations, fully cooperate with the DOJ, and timely and properly re-mediate the issues;

• Clarifies that disclosures of willful conduct to regulatory agencies and not to DOJ will not qualify for the benefits provided under the VSD Policy; and

• The definitions(1) of “Voluntary Self-Disclosure”, “Full Cooperation”, and “Timely and Appropriate Remediation” were modified to more closely align with the Departments FCPA Corporate Enforcement Policy.

References

1. US DOJ - “Export Control and Sanctions Enforcement Policy for Business Organizations” - December 13, 2019

2. US DOJ - “Justice Manual”

3. US DOJ Press Release - “Department of Justice Revises and Re-Issues Export Control and Sanctions Enforcement Policy for Business Organizations” - December 13, 2019

BAFA publishes updated Export Controls Guidance Document

The German Federal Office for Economic Affairs and Export Control (BAFA) has published an updated English version of their Export Controls guidance document.  The "Brief Outline on Export Controls" provides information related to Licensing requirements, application procedures, and information sources.  

The new edition provides updates for the following:

• The amendment of the Foreign Trade and Payments Act (AWG) and of the Foreign Trade and Payments Regulation
• Introduction to the new General Licenses 26 and 27
• Update on the embargo provisions
• Firearms regulation

Click here for the pdf of the updated document. 

For more information contact your GCSG experts.

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Key Link(s):

• BAFA Home page

US Approves New Policy on Exports of Unmanned Aerial Systems

On April 19, 2018 the U.S. Department of State announced that the President has approved a new policy in regards to the export of unmanned aerial systems (UAS).  The policy applies to all U.S. origin UAS, including those under the control of the United States Munitions List (USML) and those under the Commerce Control List (CCL).

The policy addresses five major objectives:

• Increases trade opportunities for U.S. companies
• Facilitates international partners access to U.S. UAS
• Strengthen bilateral relationships through UAS transfers
• Prevent state or non-state actors from gaining capabilities that would undermine the US
• Prevent the proliferation of weapons of mass destruction (WMD) delivery systems   

Transfer conditions:

• Armed UAS - transfers may be made via Direct Commercial Sales (DCS) or Foreign Military Sales (FMS)
• Unarmed UAS - transfers may be made via DCS or FMS
• Civil UAS - continue to be subject to the licensing requirements and policies of the Export Administration Regulations 

For additional details see the State Department press release: https://www.state.gov/r/pa/prs/ps/2018/04/280619.htm

Contact the experts at GCSG for more information.

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Key Link(s):

• Commerce Control List - "CCL"
• Export Administration Regulations - "EAR"
• International Traffic in Arms Regulations - "ITAR"
• State Department - "U.S. Policy on the Export of Unmanned Aerial Systems"
• The United States Munitions List - "USML"

BIS Export Controls Update: May 14-15, 2018 in D.C.

The U.S. Department of Commerce, Bureau of Industry and Security (BIS) announced it will hold its annual export controls update conference on May 14-15, 2018 in Washington, D.C.  The conference will be hosted at the Marriott Marquis Hotel.  For additional information contact BIS at: UpdateConference@bis.doc.gov or +1 (202) 482-6031.

Key Link(s):

• BIS - Home
• BIS - "Update Conference 2018" News Release

India joins the Australia Group

On January 19, 2018 the Indian Ministry of External Affairs announced that India has joined the Australia Group (AG).  The AG, in a consensus decision, admitted India as the 43rd participant.  

The Australia Group, established in 1985, is a voluntary and informal export control arrangement in which 42 countries, as well as the European Union, coordinate their national export controls.  The purpose is to limit the supply of chemicals and biological agents-as well as related equipment, technologies, and knowledge-to countries and entities that are suspected of pursuing chemical or biological weapons capabilities. 

GCSG's compliance experts closely follow dual-use developments.  Contact us at info@globalcompliancesg.com with any additional question's or for more information.

Key Links:

• Government of India, Ministry of External Affairs Press Release - "India joins the Australia Group" - 1/19/18
• The Australia Group 
• The Australia Group - "Control List of Dual-Use Chemical Manufacturing Facilities and Equipment and Related Technology and Software"
• The Australia Group - List of participants

EU export controls to be extended to cover human rights violations

On Thursday, November 23, 2017, EU Trade Committee MEPs voted to extend export controls to civilian goods and technologies that might be used for human rights violations.  New rules will be developed that will add certain cyber-surveillance tools to the list of goods and technologies that need to be approved prior to export.

Trade Committee suggestions include:

• "Strengthening the protection of the right to privacy, data and, freedom of assembly, by adding clear-cut criteria and definition to the regulation.
• Exporters of products not listed in the regulation but which could be used for human-rights violations, have to make sure that their goods won't fall into the wrong hands, by following OECD-based 'due diligence' guidelines.
• The Commission must publish a handbook before the entry into force of the new rules, so that EU businesses know what they can and cannot do.
• New risks and technologies have to be swiftly included in the regulation.
• Creating a level playing field among member states, by, for example, introducing similar penalties for non-compliance, along with greater transparency of national authorities export control decisions." (1)

Klaus Buchner (Greens/EFA, DE) said: "With today's vote we extend effective control to cyber-surveillance technology.  We close loopholes that otherwise result in innocent people across the world being imprsioned, tortured and killed.  We make the protection of human rights a central aspect of dual-use export control.  We add strong, new transparency measures and include civil society participation, whilst continuing to create value-based European trade policy." (1) 

Key Term(s):

• MEP - Member of the European Parliament  

Key Link(s):

• (1) European Parliament News: "Preventing authoritarian regimes from spying on their own citizens"
• About MEPs
• European Commission: "The EU Dual Use Export Control Regime" - 7/2/2014
• European Commission: "Setting up a Union regime for the control of exports, transfer, brokering, technical assistance and transit of dual-use items" - Proposal 9/28/2016
• European Parliament: "Review of dual-use export controls" - 7/24/2017
• OECD: Due Diligence "Guidelines for multinational enterprises"

The Australia Group Posts Dual-Use Equipment & Tech Control List

In May 2017, the Australia Group posted a control list of dual-use chemical manufacturing facilities and equipment and related technology and software on their website.

The Australia Group, established in 1985, is a voluntary and informal export control arrangement in which 41 countries, as well as the European Union, coordinate their national export controls.  The purpose is to limit the supply of chemicals and biological agents-as well as related equipment, technologies, and knowledge-to countries and entities that are suspected of pursuing chemical or biological weapons capabilities.

The May 2017 web page includes information related to the four main sections listed below.

1. Manufacturing facilities and equipment
   • Reaction vessels, reactors or agitators
   • Storage tanks, containers or receivers
   • Heat exchangers or condensers
   • Distillation or absorption columns
   • Filling equipment
   • Valves
   • Multi-walled piping
   • Pumps
   • Incinerators
2. Toxic Gas Monitors and Monitoring Systems, and their dedicated detecting components
3. Related Technology
4. Software

GCSG's compliance experts closely follow dual-use developments.  Contact us at info@globalcompliancesg.com with any additional question's or for more information.

Key Links:

• The Australia Group 
• The Australia Group - "Control List of Dual-Use Chemical Manufacturing Facilities and Equipment and Related Technology and Software"
• The Australia Group - List of participants