A second post related to our Export Control Reform (ECR) and the National Export Initiative (NEI) presentation. We’ll take a break from this next week to discuss a recent OFAC guidance, but then you can look forward to several more related to these two programs.
Woo hoo! A new license exception has been announced! For a few of you, today was an exciting day as the BIS unveiled the new Strategic Trade Authorization license exception. For those of you wondering what the heck we are talking about, STA is a new license exception that was proposed as part of the Export Control Reform Initiative, which has an end goal of making the US more competitive in the global market and making it easier to do business with US companies.
STA permits unlicensed exports of many items on the CCL to countries that pose little risk of unauthorized diversion, assuming those US exporters and non-US recipients comply with certain requirements. Unfortunately, between the time the proposal was published in December and the final ruling unveiled today, the scope was limited significantly and the number of individual license reductions may not be as significant as originally anticipated. However, it is still a step in the right direction.
For those of you that find this new exception helpful and have decided it is something you want to adopt in your organization, eventually you will need to think about how you want STA to be represented in your GTS system. From a technical perspective, here are a few things to consider:
- License type – When you define the new license type, you will need to consider what rules you want included (e.g., partner, ECCN, and country)
- License master data – Setting up your license masters may take some time and quite a bit of thought by your compliance team. What can be expired from your old licenses that can now be incorporated into STA? Which of your customers (business partners) are relevant for this new license exception? Which ECCNs in your product catalog are applicable for you?
- Determination strategy – This is the baby step that is often forgotten until you get that first blocked document. Remember to add your STA entry to your license determination strategy.
- Destination Control Statement – STA requires a special destination control statement. Depending on how your DCS gets printed on your Commercial Invoice, the programming of your invoice will most likely need to be adjusted.
- EEI Filings – The STA code is not yet in the AES system, but it will be modified soon to accept a new value. Once that value is announced, you will need to update your license type configuration with the new export license code that represents STA.
The technical set up we’ve talked about above is probably the easiest consideration when doing your analysis of adopting STA in your organization. The tricky part is fully understanding the old to the new mapping that needs to take place and identifying what needs to be retired in your existing set up.