Export Control Reform (ECR) Update

The four (4) steps to help ensure compliance with export control regulations

The trend toward export control reform is dynamic, global and complex. Previous export control regulations did not address changes in technology, consider changing international dynamics nor anticipate the fast-paced nature of today’s marketplace. Many countries are moving toward more modernized export control initiatives and are in varying stages of rolling out similar export reform programs.

In the United States, for example, Export Control Reform is now one-year-old and is a good place to start in the export control reform discussion. Simply stated, the aim of U.S. Export Control Reform is to relax some specific export-related regulations, strengthen others and modernize trade. It is anticipated that these changes may help to increase exports and potentially boost U.S. Gross Domestic Product (GDP). In order to implement the export control system from a tactical perspective, affected products need to be reclassified and moved to other jurisdictions within the U.S. government.

Many shippers who have watched the initiative from the sidelines are now moving to: (1) identify which products are impacted, (2) determine to which government bureau the goods now ‘belong’, and (3) properly reclassify the products in question. There is also a major impact on (4) licensure which may result in significant expense to companies. With many licenses set to expire on October 15, 2015, the end of the two-year ECR transition period, the urgency is high and the rush to comply has begun.

The Four (4) Steps Toward A Successful Export Control Reform Strategy At-A-Glance
Item			Details
	1	Identification	Determine which goods may be impacted
	2	Jurisdiction	Categorize and assign these goods either to the Commerce Control List (CCL) or the U.S. Munitions List (USML)
	3	Classification	Reclassify those goods and determine any related sub-categories
	4	Licensure	Determine whether license exceptions may be used
* Categorize and assign these goods either to the U.S. State Department’s International Traffic in Arms Regulations (ITAR) U.S. Munitions List (USML) to the U.S. Department of Commerce’s Export Administration Regulations (EAR) Commerce Control List (CCL).  There are case-by-case exceptions, but these are the two general jurisdictions for these purposes.

How a company chooses to roll out its export control reform strategy is of key importance. With multiple phases, rulings, revisions and exceptions, there is certainly no shortage of information related to U.S. Export Control Reform and shippers are faced with a steep learning curve. Since many export-related procedures are still enmeshed in disparate and labor-intensive processes, the cost of export reform has the potential to greatly impact the bottom line.

As a leader in regulatory compliance, we encourage you join us for an upcoming web seminar, What You Need to Know About Export Control Reform (ECR) & Best Practices. Please register to attend the live session on Tuesday, February 17 at 2pm EST, or to view a recording of the event following this date. This engaging webinar will help you develop an effective export control reform strategy and determine what you need to change and when in order to comply.