Bureau of Industry and Security Seeks Comments from SMEs on Export Controls

On October 6, the Department of Commerce, Bureau of Industry and Security (BIS) published a Notice of Inquiry in the Federal Register requesting comments from small and medium enterprises (SMEs) about their “understanding of and compliance with export controls maintained pursuant to the Export Administration Regulations (EAR).

SMEs will now have an opportunity to offer comments and concerns about the EAR’s administration and enforcement against the backdrop of the President’s National Export Initiative (NEI) which calls for U.S. companies to double exports over the next 5 years.

BIS expects the input will “help it administer and enforce export controls in a manner consistent with U.S. national security” while potentially increasing exports from SMEs. All exporting companies favor and support predictability. SMEs particularly need predictability as they begin to slowly emerge from the depths of the Great Recession.

Continuing outreach efforts and programs like The Export Legal Assistance Network, www.exportlegal.org, can assist exporting companies to understand and comply with their obligations under the EAR. When compliance falls short, consistent enforcement and predictability of penalties would be of great benefit, particularly since the maximum administrative civil penalty level is $250,000 per violation. Perhaps a penalty regime similar to the Administrative Monetary Penalty System (AMPS) used by the Canada Border Services Agency (CBSA) can be adopted for SMEs. Or perhaps BIS can issue warnings, without a monetary penalty, for first-time offenders when a violation of the EAR occurred during a prior time when management was not fully appreciative of the need for compliance or the company did not have the resources to implement a more robust compliance program.

The Notice of Inquiry should cause SMEs to feel empowered to "speak" to BIS on these important issues, whether through trade associations, chambers of commerce, or as single companies.

Comments to BIS are due by December 6, 2010. They should be identified in the subject line as "Notice of Inquiry—SME," and can be delivered by e-mail at publiccomments@bis.doc.gov. Comments can also be faxed to +1.202.482.3355. When faxing, please call the Regulatory Policy Division, at +1.202.482.2440. Comments can also be mailed or sent by courier to: Sheila Quarterman, U.S. Department of Commerce, Bureau of Industry and Security, Office of Exporter Services, Regulatory Policy Division, 14th Street & Pennsylvania Avenue, NW., Room 2705, Washington, DC 20230, Attn: "Notice of Inquiry—SME."