Export agency shifts focus to regulatory changes

In the absence of any progress on Capitol Hill, the Commerce Department agency responsible for controls of sensitive exports has turned its focus to administrative measures to accomplish its goals, the agency's top official said on Monday.

The Bureau of Industry and Security (BIS) has been a leader in the Bush administration and technology industry effort to get Congress to renew and update the nation's export-control system, which is governed under the Export Administration Act (EAA). But changes in key committee chairmanships and a national mood shift toward stronger security hindered the effort.

"The administration is committed to working with the relevant committees of the Senate and House on a new [EAA] bill," said Kenneth Juster, undersecretary of Commerce for industry and security. "In the meantime, however, we have been moving forward on a number of fronts administratively to make our export-control system more efficient and more effective."

Examples of administrative measures undertaken include the issuance last month of new administrative case-penalty guidelines that list the considerations that form the basis of decisions for settlements, Juster said at a department conference. The bureau also revised its guidance for re-exports aimed at making U.S. export controls clearer for potential foreign importers.

In addition, the bureau is reviewing so-called deemed exports, which involve the sharing of sensitive information with foreign nationals, and of technology controls, which cover the know-how for making computers and microprocessors.

The bureau hopes to find a way to improve the process for renewing deemed export licenses, Juster said. And a Federal Register notice soon will be published seeking comments on a proposal to liberalize controls on computer and microprocessor technology and related software.

Other initiatives include near-completion of a proposed rule that will clarify the "knowledge" standard in Export Administration regulations. Juster said the United States is pressing for greater international adoption of its standard that judges companies on whether they knew or should have known about the misuse of their product for military purposes.

Also in the works is a review of the structure the government employs for classifying countries' levels of risk. It is broader than the tier system employed for high-performance computer exports.

And the computer industry is seeking another increase in the level of control over computing power, Juster said.

He said that the past year has been an active one for enforcement and that his agency works with various others on investigations. BIS concluded cases with criminal penalties of approximately $2.2 million and administrative fines of $4.4 million, he said.

Juster highlighted several international initiatives, including one to stop transshipment of controlled items to unauthorized users, a cooperative agreement with India, and attempts to get agreement from China to allow inspections there confirming that goods arriving are properly used. He said the department had made some progress with China but warned that without further progress on post-shipment verifications, the U.S. ability to license exports to certain Chinese companies will decrease.