Big Changes in License Exceptions for High Tech Exporters
In recent years we have seen a concentrated effort to lighten export controls that affect our close global allies, particularly in regard to advanced technologies related to semiconductors and quantum computing. For example, we’ve seen restrictions loosed as a part of the AUKUS agreement, which began as a nuclear submarine manufacturing partnership and expanded to include changes to regulations for other critical technologies. This agreement in particular was a deliberate shift towards license-free trade between ourselves and our allies Australia and the UK. Restrictions are being minimized in order to foster cooperation with our allies in the face of rising global threats, with an emphasis on easing trade restrictions.
On September 5th, another step towards this goal was taken. During our process of editing our export controls, we have encouraged other countries to do the same. The interim rule proposed by the BIS is a direct outreach to those countries that have followed our lead in aligning their export compliance standards to our own. As the Assistant Secretary of Commerce for Export Administration Thea Rozman Kendler said, “The most effective way to protect our national security is to develop and coordinate our controls alongside like-minded partners, and today’s actions demonstrate our flexibility in how we craft such controls to achieve our national security objective.”
The actions mentioned in Kendler’s statement are the implementation of worldwide export controls on specific types of items: Quantum Computing Items, Advanced Semiconductor Manufacturing Equipment, Gate All-Around Field-Effect Transistor Technology, and Additive Manufacturing Items.
Now, you might be thinking, how is adding more export controls on items easing trade with allies? Alongside these export controls, the BIS is establishing a new License Exception Implemented Export Controls. What this entails is that countries that meet the terms of IEC (the like-minded countries that share our values and security interests that implement similar export controls on the stated technologies) will be able to qualify for new license exceptions, eliminating the need to submit license applications for these technologies. This is in addition to newly implemented exclusion clauses for Deemed Exports (sharing or releasing of controlled technology/information to foreign persons within the U.S.) that will work to avoid disrupting the development of these technologies. Included in the links at the bottom of this post is a link to the chart of countries that will benefit from the license exceptions due to the status of their aligned export controls. If your business deals with any of the listed technologies, I urge you to examine the interim rule and the new benefits that come with it.
But this is not the only change announced in this BIS Press Release. In addition to these actions, BIS is also adding a general license for deemed exports of certain technologies. Prior to this, licenses would have to be filed as normal Commerce licenses and specified as being used for Deemed Exports during the process. It seems BIS is working to change this situation by creating a new general license for deemed exports. There will undoubtedly be rules applied to this license, that we should all take the time to go over. Once the rule is officially published (I believe it has been as of 9/6/24), I may dedicate one of AEC’s longer articles or a podcast episode to go over it in its entirety, so stay tuned! In the meantime, please checkout the links below from the BIS press release.
https://www.bis.gov/articles/license-exceptions#license-exception-IEC
AEC is a fresh face in the Export Compliance world, but it has been born from an industry veteran with employees honed in a knowledge-rich environments. We’ll make Export Compliance simple for you with research done right.
