and a former U.S. Assistant Secretary of Commerce, International Trade Administration. He served as a senior U.S. trade policy-maker and negotiator and has practiced international trade law since 1980. Stewart. Her practice focuses primarily on international trade law, export controls, economic sanctions and customs matters. 2100 M Street, N.W., Suite 200 Washington, D.C. 20037 202.315.0765 Phone 202.466.1286 Fax amdunn@stewartlaw.com jsmith@stewartlaw.com www.stewartlaw.com others involved in exporting certain goods and technology are facing major changes to export licensing rules under new reforms to the U.S. export control laws. A wide range of products, materials and technology are affected by export control reforms that went into effect in October 2013 and additional reforms being implemented in 2014. All participants in the export chain from manufacturer to shipper must ensure that they understand how the changes to these laws apply to their products and activities. Export controls are restrictions on exports implemented for various national security purposes that require the issuance of export licenses by various agencies of the U.S. government before exporting a wide range of goods. The export control laws capture a broader range of products, software, technology and services than many realize. these laws can result in severe criminal and civil penalties, including imprisonment. Even a single inadvertent violation can result in hundreds of thousands of dollars in penalties. For example, in August 2013, Meggitt-USA, Inc. agreed to pay a civil penalty of $3 million (plus $22 million suspended) to settle allegations that it violated export control laws. In January 2013, a Pennsylvania man was sentenced to 42 months in jail for knowingly misclassifying electronic amplifiers. Although the amplifiers were eligible for export to the end-user countries under the proper license, his explanation was that he was "too busy" to obtain the licenses and was "overwhelmed at work." agreed to pay civil penalties of $4 million (plus $4 million suspended) for alleged export control violations. Many violations arise from inattention, improper self-classification of exported programs. In some instances, companies have tried to determine the correct controls, but missed certain subtleties in the laws and committed unintentional violations. Such mistakes are not uncommon. Initiative (sometimes referred to as the ECRI) was launched by the Obama Administration in 2009 based on the recognition that complicated export controls make exporting more difficult for U.S. businesses, discourage foreign companies from buying U.S. products and services, and do not reflect key U.S. national security concerns. The Reform Initiative seeks to identify the most sensitive items requiring strict controls, while streamlining and easing restrictions on items not as essential to U.S. national security concerns ("putting higher fences around fewer items"). This reform effort is focused on two of the major export control regimes the International Traffic in Arms Regulations (ITAR), which regulate items on the U.S. Munitions List (USML), and the Export Administration Regulations (EAR), which regulate items on the Commerce Control List (CCL). Force Businesses and Individuals to Comply With Changing Export Licensing Rules |