BIS, DDTC Forge Ahead on Interagency Enforcement Collaboration, Says Mills
MINNEAPOLIS -- The transfer of items from the International Traffic in Arms Regulations (ITAR) to the Export Administration Regulations (EAR) through Export Control Reform is presenting formidable enforcement challenges, but the Departments of State and Commerce are largely on the same page with their approaches, said Commerce Assistant Secretary for Export Enforcement David Mills on June 18 at the American Association of Exporters and Importers annual conference. The Export Enforcement Coordination Center and Information Triage Unit, two multi-agency control initiatives launched in 2012 (here), are increasingly fostering interagency collaboration and communication when active investigations into sanctions violations and control evasions are underway, he added. The enhanced coordination is helping to facilitate license processing, said Mills.
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The Commerce Department’s Bureau of Industry and Security has also strengthened the Unverified List (UVL) by providing more instructions to exporters on how to address UVL parties for transactions typically subject to a license exception, Mills said, adding that BIS eliminated the red flag program to placate industry complaints. “We are also committed to work closely with our colleagues at the Directorate of Defense Trade Controls to coordinate end-use checks where EAR items, such as those under the ‘600 series,’ are co-located with ITAR items,” said Mills. “This will avoid duplication of resources and allow the U.S. government to obtain a more fulsome picture of activities involving foreign parties involved with U.S. exports.” Export Control Reform created the dual-use “600 series” on the Commerce Control List (see 14010302). The Commerce Department’s current enforcement focus is on diagnosis of prospective violations, rather than retroactive penalties, particularly when companies have sound compliance programs, said Mills.
The Commerce Department does, however, have “very little visibility” into cases processed by the State Department’s Directorate of Defense Trade Controls, said Mills. Commerce aims to amend its regulations to reflect the program currently used by the Treasury Department’s Office of Foreign Assets Control, which determines civil penalties based on transaction value and provides more transparency for exporters, Mills said. The rule would also ideally bring the State Department on board, enabling greater coordination between Commerce and State, added Mills. Regardless of the rules in place pertaining to enforcement oversight, industry remains the first line of defense in detecting sanctions violations and control evasion, however, he added. “Industry reports of suspicious transactions have led to the identification and disruption of some of the most sophisticated proliferation networks,” said Mills. -- Brian Dabbs