Monthly Archives: November 2018

Be on the Lookout, Stricter License Requirements Expected for Chinese Military; Review the New Emerging Technologies and Send Your Comments to BIS!

Chinese Military End Users Targeted in Commerce Regulatory Agenda

On November 16, 2018, the Department of Commerce published its Fall 2018 Semiannual Agenda of Regulations (83 FR 57998).  In addition to various entries for other parts of the department, it includes an announcement that the Bureau of Industry and Security (BIS) plans to expand license requirements for export, reexports, and transfers (in country) to military end users in the People’s Republic of China.  Currently, Section 744.21 of the Export Administration Regulations (EAR) imposes license requirements on such transactions when the item is intended for a “military end use” in China or a “military end user” in Russia or Venezuela.  The change would likely expand licensing requirements for China to match current requirements for Russia and Venezuela and make other changes, including to EAR “Reasons for Control” and Automated Export System (AES) filing requirements.  A Notice of Proposed Rulemaking is anticipated in February 2019.

Comments Requested on Emerging Technologies

This summer’s Export Control Reform Act (ECRA) directed the Department of Commerce, along with Defense, Energy, and State, to identify “emerging and foundational technologies” that may warrant export controls to include CFIUS review and export licensing.

Proceeding with this review, the Department of Commerce published a notice (83 FR 58201) on November 19, 2018 requesting comments on emerging technologies that are essential to national security due to “potential conventional weapons, intelligence collection, weapons of mass destruction, or terrorist applications” or that may provide the U.S. “qualitative military or intelligence advantage.”

The notice includes the following representative list of technologies currently controlled by the EAR, but with limited licensing requirements:

(1) Biotechnology, such as:

(i) Nanobiology;
(ii) Synthetic biology;
*
(iv) Genomic and genetic engineering; or
(v) Neurotech.

(2) Artificial intelligence (AI) and machine learning technology, such as:

(i) Neural networks and deep learning (e.g., brain modelling, time series prediction, classification);
(ii) Evolution and genetic computation (e.g., genetic algorithms, genetic programming);
(iii) Reinforcement learning;
(iv) Computer vision (e.g., object recognition, image understanding);
(v) Expert systems (e.g., decision support systems, teaching systems);
(vi) Speech and audio processing (e.g., speech recognition and production);
(vii) Natural language processing (e.g., machine translation);
(viii) Planning (e.g., scheduling, game playing);
(ix) Audio and video manipulation technologies (e.g., voice cloning, deepfakes);
(x) AI cloud technologies; or
(xi) AI chipsets.

(3) Position, Navigation, and Timing (PNT) technology.

(4) Microprocessor technology, such as:

(i) Systems-on-Chip (SoC); or
(ii) Stacked Memory on Chip.

(5) Advanced computing technology, such as:

(i) Memory-centric logic.

(6) Data analytics technology, such as:

(i) Visualization;
(ii) Automated analysis algorithms; or
(iii) Context-aware computing.

(7) Quantum information and sensing technology, such as

(i) Quantum computing;
(ii) Quantum encryption; or
(iii) Quantum sensing.

(8) Logistics technology, such as:

(i) Mobile electric power;
(ii) Modeling and simulation;
(iii) Total asset visibility; or
(iv) Distribution-based Logistics Systems (DBLS).

(9) Additive manufacturing (e.g., 3D printing);

(10) Robotics such as:

(i) Micro-drone and micro-robotic systems;
(ii) Swarming technology;
(iii) Self-assembling robots;
(iv) Molecular robotics;
(v) Robot compliers; or
(vi) Smart Dust.

(11) Brain-computer interfaces, such as

(i) Neural-controlled interfaces;
(ii) Mind-machine interfaces;
(iii) Direct neural interfaces; or
(iv) Brain-machine interfaces.

(12) Hypersonics, such as:

(i) Flight control algorithms;
(ii) Propulsion technologies;
(iii) Thermal protection systems; or
(iv) Specialized materials (for structures, sensors, etc.).

(13) Advanced Materials, such as:

(i) Adaptive camouflage;
(ii) Functional textiles (e.g., advanced fiber and fabric technology); or
(iii) Biomaterials.

(14) Advanced surveillance technologies, such as:

Faceprint and voiceprint technologies.

*(1)(iii) was omitted in the published notice.

Comments are requested on how to define emerging technology, control criteria, and other relevant information.  Comments may be submitted until December 19, 2018.  Please see the Federal Register Notice for more information.  A separate notice is planned for “foundational technologies.”

(None of the information is intended to be authoritative official or professional legal advice. Consult your own legal counsel or compliance specialists before taking actions based upon this blog or other unofficial sources.)

Export Compliance Updates: DECCS, Electronic Waste, and Wassenaar

Be the First to Test On-Line Advisory Opinion & Registration Applications!

DDTC is requesting industry testing of future Advisory Opinion and Registration applications in the Defense Export Control and Compliance System (DECCS).  See the DDTC News & Events page (10/15/2018 & 10/30/2018) for more information.  Testing is expected to continue through mid-November.

Comment on Prior Approval Requests for Brokering

On October 16, the Department of State, Directorate of Defense Trade Controls (DDTC) published a notice (83 FR 52298) requesting comments on Brokering Prior Approval requests.

As described in the notice:

Currently submissions are made via hardcopy documentation. Applicants are referred to ITAR part 129 for guidance on information to submit regarding proposed brokering activity. Upon implementation of DDTC’s new case management system, the Defense Export Control and Compliance System (DECCS), a DS-4294 may be submitted electronically.

Comments may be submitted until December 17, 2018.  Please see the Federal Register Notice for additional details.

And the New Year Will Bring:

  • Movement on USML Categories I-III – see our previous blog posts on the proposed changes to firearms, guns, and ammunition;
  • Revisions to ITAR Exemption 126.4(a) – Shipments by or for U.S. Government agencies;
  • DECCS testing of the DSP-85 – classified hardware & technical data; and
  • Reorganization of the sections of the ITAR.

Commerce Requests Comments on Electronic Waste

On October 23, 2018, the Department of Commerce published a notice (83 FR 53411) requesting public comments on potential export controls on electronic waste.  This request is based on concerns that “counterfeit goods that may enter the United States’ military and civilian electronics supply chain” resulting from unregulated overseas recycling of discarded electronic equipment.  See the Federal Register Notice for additional background, potential definitions, and potential regulatory requirements and exemptions.  Comments may be submitted through December 24, 2018.

Commerce Revises CCL to Reflect Wassenaar Plenary

On October 24, 2018, the Department of Commerce published rule (83 FR 53742) which amends the Commerce Control List (CCL) to reflect changes made to the Wassenaar Arrangement List of Dual-Use Goods and Technologies at the December 2017 Plenary meeting.

The rule revises 50 Export Control Classification Numbers (ECCNs): 0A617, 0A919, 1A002, 1C001, 1C002, 1C007, 1C010, 1C608, 2A001, 2B001, 2B006, 2B007, 2B008, 2E003, 3A001, 3A002, 3B001, 3B002, 3C002, 3C005, 3C006, 3C992, 3E001, 4A003, 4A004, 4D001, 4E001, 5A001, 5A002, 5D002, 5E002, 6A002, 6A003, 6A004, 6A005, 6A008, 6A203, 6D003, 6D991, 6E001, 6E002, 6E201, 7A006, 7E004, 9A002, 9A004, 9D001, 9D002, 9D004, and 9E003.  It also removes ECCNs 6A990 and 6E990, corrects 3A991, and makes other changes to ECCNs 2B206 and 3A001.i.  Furthermore, the rule moves 37 definitions from Part 772 to the relevant ECCNs and makes changes throughout the Export Administration Regulations (EAR) to reference the revised ECCNs.

A follow-up notice was published on November 2, 2018 (83 FR 55099) to correct an omitted reference to the Civil end-users (CIV) exception for some 3A001 items.

Export compliance is always changing.  Subscribe to Our “EAR”… to the ITAR to keep up!

(None of the information is intended to be authoritative official or professional legal advice. Consult your own legal counsel or compliance specialists before taking actions based upon this blog or other unofficial sources.)