BIS Removes Special Comprehensive License from EAR Despite Exporter Protests
The Commerce Department’s Bureau of Industry and Security finalized a rule to cut the Special Comprehensive License from its list of license authorizations. BIS floated a proposal to remove the SCL in September 2014 (see 14092918). The SCL authorizes U.S. companies to consolidate exports and other activities, such as project, distribution, service supply, service facilities, aircraft and vessel repair station procedures, and special chemical handling, under one license.
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The SCL has “outlived its usefulness to the exporting public since recent changes to the [Export Administration Regulations] permit exporters to accomplish similar results using individual licenses and without undertaking the more onerous SCL application,” said BIS in its final rule (here). That insight echoes BIS’ initial reasoning for proposing the SCL cut.
The removal will take effect Sept. 24, but all SCLs will stay active for one year following that effective date. Exporters will no longer have the SCL as a license option on Sept. 26, 2016. “During this transition period, BIS will not accept new SCL applications or amendments, including renewals, to outstanding SCLs,” said BIS. “With the publication of this final rule, SCL holders may choose to apply for four-year individual licenses for exporting and reexporting items under the EAR or use available license exceptions.”
The final rule removed proposed language that would have removed SCL authorizations for exporters once their SCLs expire according to the terms of the exisiting license, rather than the all-inclusive one-year transition period. BIS decided to give all SCL users the one-year buffer in order to help those who haven’t yet started the process of transitioning to other licenses, it said in the final rule. BIS also made several technical changes in the final rule.
The agency published 11 summaries of comments to the final rule, and virtually all stakeholders praised the merits and simplicity of the SCL. A number of commenters said other license exceptions aren't a "viable alternative" to the SCL. BIS, however, insisted that exporters will be able to work within the bounds of the regulatory regime to accomplish the same activities under the SCL.
(Federal Register 08/26/15)