“Our goal is to obtain advanced computing semiconductor chips. We would very much like to use this technology for military applications,” relayed the foreign visitor.
“One second please Mr. Visitor,” answered the U.S. business owner.
Stepping off to the side, the now confused entrepreneur whispered to his business partner. “Something seems off.”
Okay, it’s usually not this obvious that national security is at risk. But it does show how effective export control starts with the individual business owner.
What Is the Bureau of Industry and Security (BIS)?
Under the umbrella of the Commerce Department, BIS exists to place export controls on certain transactions involving other countries.
Headquartered in our nation’s capital, it was founded in 2001 primarily to strengthen national security.
More Than National Security Enforcement
According to its mission statement, a secondary aim is helping the U.S. reach its overall economic objectives. With an intended result of competing effectively against foreign produced items.
Artificial intelligence technology is of interest to the United States government, and is one example of a product their export control regulates.
Now, we’ll dive into where they apply their responsibilities.
What Does BIS Do?
Besides dealing with national security and items subject to export administration regulations, BIS has other roles:
- Secure a treaty compliance system
- Review foreign policy to discover areas of mutual interest
- Further strategic technology leadership
For instance, despite ongoing trade with the People’s Republic of China (PRC), effective export control is a necessity. That’s because military decision making and human rights abuses come into play.
Advanced military systems arriving on their shores would place our country at a major disadvantage. Beyond our national security interest, it also relates to being the world leader in such items.
International trade is important, but a nation that places it above their domestic needs will experience negative effects. This lesser known obligation of the BIS benefits the United States as a whole and drives innovation within our borders.
Next, it’s worth seeing if your current inventory involves items they oversee.
What Are Some of the Products That Are Regulated by BIS?
At the beginning of the year, BIS updated their export controls to include aviation-related items from two countries. It added Belarus and Russia to its entity list because of the situation in Ukraine.
New export controls aimed at limiting the PRC’s ability for military modernization also came into effect in October.
Mentioned products:
- Semiconductor manufacturing items
- Advanced computing chips
The Department of Commerce control list was revised due to real foreign policy concerns. By applying broader restrictions to computer commodities and semiconductor fabrication, they intend to shore up any gaps.
Semiconductor manufacturing equipment such as an integrated circuit face licensing requirements, but they aren’t alone.
Other Products That Are Subject to the EAR
Export Administration Regulations (EAR) are detailed on the BIS website, but we want to share a few additional categories that affect strategic trade issues:
- Autonomous military systems
- Telecommunications
- Information security
- Marine
Even less sensitive military items may necessitate exporter license applications.
If you’re unsure whether or not certain exports fall under these restrictions, take advantage of our international trade law expertise.
Keep reading and we’ll give you some tips on the best way to meet their standards.
How Can Businesses Comply With BIS Regulations?
In the area of deemed exports, employee training and periodic internal audits are a good first line of defense. Your staff that interact with an end user who has external links outside the country should be the priority.
Additionally, your leadership team should review the BIS entity list before welcoming foreign businesses. The names on it are subject to export license requirements. Why?
National security interests are considered as certain technology could be abused to build weapons of mass destruction. Or terrorists could eventually be the end user once the corporate face of their movement visits our shores.
It’s wise to do everything within your power to avoid becoming subject to the EAR.
Accomplishing this will protect your business assets and add to the longevity of your career in entrepreneurship.
Regardless of your company size, allocate resources to this matter. Add a recurring task into any dedicated project management software to prevent it from slipping through the cracks.
As we start to wrap up, it’s time to address perks should you avoid becoming subject to the EAR.
What Are the Benefits of Compliance With BIS Regulations?
Surely we all can agree it’s best to avoid scrutiny from the federal government. That is the biggest benefit of keeping a close eye on the BIS entity list.
Are there other reasons?
Plenty! Let’s use a semiconductor company for an illustration.
Creating a program to train and equip your employees will safeguard them from coming under the eye of Export Administration Regulations (EAR). Acting almost as an “end user review committee,” it encourages a proactive approach.
Export Controls Can Be Your Friend
Other export control program benefits:
- Increase the reliability of your semiconductor supply chain
- Empower staff to red flag possible items subject to BIS rules
By promoting continued diligence, your entire business will be fortified. This extra confidence will enable you to better compete in your market.
And the natural result will be a higher chance of profitability and the ability to garner a larger market share.
We’re sure you’d agree those are both positive outcomes.
It’s always smart to go directly to the source when any confusion sets in. That’s the final item to cover in this article.
How Can Businesses Get Help From BIS if They Have Questions or Need Assistance Complying With Regulations?
Should you want some outside help complying with the Export Control Reform Act, BIS can offer guidance.
Their Outreach program provides education on foreign produced items subject to further review. Although this service is especially valuable for semiconductor manufacturing and advanced computing, it’s available to every industry.
If requested, an Outreach contact will conduct an in-person visit with representatives of your company. The consolidated screening list they give you will be a nice guide moving forward.
By the end, you’ll be more confident to identify any foreign policy interests of certain entities. Export controls don’t need to cause anxiety after all.
And it’ll become easier to review the BIS Commerce Control List on a case by case basis.
If you’ve made it this far and would rather hand off all that compliance entails, we’d like to share one final piece of information.
Reidel Law Firm Aiding Exporter Services
As experts in international trade law, we can help you handle the legal aspects of any BIS export controls.
Our international trade law division also supports:
- Import Compliance
- Litigation before the Court of International Trade (Section 337, anti-dumping/countervailing, and other trade related cases)
- Trade Compliance Audits and Training
Call Reidel Law Firm today at (832) 510-3292 or fill out our form to see how we can help you with license requirements.
