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Blog Category: Bureau of Industry and Security

Resources to Help Manufacturers Understand Export Controls

On October 3, on Manufacturing Day, American manufacturers will be celebrated for the contributions they make toward U.S. job creation, innovation and a strong, competitive U.S. economy.  With the recent creation of more than 700,000 new manufacturing jobs, the increased growth rate experienced by the U.S. manufacturing sector is almost twice the rate of growth in the overall economy.  To accelerate this growth even more, manufacturers may sell their products in international markets, which comprise two-thirds of the world’s purchasing power.

Many commodities and technologies manufactured in and exported from the United States are used only for commercial purposes, but some also have military applications.  Items with recognized civilian and military applications include, for example, numerically controlled machine tools, advanced electronics, and high-performance computers.  The Commerce Department’s Bureau of Industry and Security (BIS) licenses the export of such commodities, as well as related software and technology.  BIS administers export control laws and regulations to strengthen U.S. national security and foreign policy objectives, such as preventing the spread of weapons of mass destruction. 

Currently, BIS is at the forefront of changes to the U.S. export control system related to the Administration’s Export Control Reform initiative.  A key element of the reform is moving tens of thousands of items—mostly parts and components—from the State Department’s jurisdiction to the Commerce Department, which will provide greater flexibility for U.S. companies to engage in export trade.      

On the BIS website, there are several resources to help manufacturers and exporters understand the licensing system, changes under Export Control Reform, and how to set up effective compliance safeguards.  Here are a few resources to help manufacturers export your items:

Five Things Small Businesses Should Know About Export Control Reform

Small businesses are growing at unprecedented rates. They employ about half – 55 million – of the nation’s private workforce and account for 99.7% percent of all employers in the U.S. Through exporting, they have the opportunity to grow even more: two-thirds of the world’s purchasing power is in foreign countries. In a 2013 survey of 500 small business owners, the National Small Business Association (NSBA) found that 63% of participants who did not already export said that they would be interested in doing so, but cited lack of information on exporting as an obstacle for small businesses.

In 2009, President Obama launched the Export Control Reform (ECR) initiative, a significant effort aimed at enhancing our national and economic security through reform of the export control system—a system that had not been comprehensively updated in decades. The Commerce Department’s Bureau of Industry and Security (BIS) administers export controls for commercial and some military commodities and technologies. Now, the President’s ECR initiative is transferring tens of thousands of less sensitive military items from the State Department’s jurisdiction to the more flexible Commerce regulations. Most are parts and components; many are manufactured by small businesses. Moving these items to Commerce benefits small businesses because BIS’s regulations allow for more nuanced distinctions among technologies, destinations, and end users than the State Department’s regulations.

  Here are five things small businesses should know about ECR:

  1. Who is affected? ECR affects second and third tier small and medium suppliers in the defense industry. These sectors include aerospace, military vehicles, marine vessels, space, satellites, and electronics.
  2. ECR eases the financial burden: Currently, exporters subject to the State Department’s International Traffic in Arms Regulations (ITAR) pay $250 per license to the State Department, even to export an item that sells for $200. In addition, all manufacturers and exporters have to pay a minimum registration fee of $2,250 per year, even if they don’t export. Commerce, however, is prohibited by statute from charging licensing and registration fees. For an estimated 60% of former State Department registrants whose products are moving to the Commerce Department then, there are no annual registration requirements or associated fees. This directly affects the bottom line.
  3. More flexible regulations: License Exception Strategic Trade Authorization (STA) establishes a license-free zone covering the first export transaction for many parts and components that have been transferred to Commerce. STA provides small businesses with an opportunity to ship license-free to 36 countries, so long as certain safeguards are observed.
  4. How can ECR help you? ECR helps small businesses by increasing the security of supply from small companies that are the second and third tier suppliers, facilitating timely and reliable supplier relationships between U.S. exporters and their foreign customer base, and enhancing their long-term health and competitiveness.
  5. Resources: BIS recognizes that this transition requires considerable outreach and education to affected industries. This is why we work with non-profit educational groups representing small defense exporters, conduct weekly ECR conference calls open industries and companies, and have added interactive tools to our website to help U.S. companies comply with the new regulations under the ECR initiative. In addition, we provide free counseling via phone (Washington DC:  202-482-4811; BIS Western Regional Office:  949-660-0144 and 408-998-8806). We host 30 seminars and events annually, and the BIS website also has a variety of online tools and resources in our Exporter Portal.

Department of Commerce releases FY 2014-2018 Strategic Plan

Plan priorities are in direct alignment with the Department’s “Open for Business Agenda”

Today the Department of Commerce released its Strategic Plan for fiscal years 2014 to 2018. The five-year plan, along with the recently released FY15 budget, provides the pathway for meeting the Department’s long-term goals and objectives. The plan, summarizes the key strategies and initiatives that will drive progress in the Department’s five priority areas:

  • Trade and Investment. Expanding the U.S. economy through increased exports and foreign direct investment that leads to more and better American jobs.
  • Innovation. Fostering a more innovative U.S. economy—one that is better at inventing, improving, and commercializing products and technologies that lead to higher productivity and  competitiveness.
  • Data. Improve government, business, and community decisions and knowledge by transforming Department data capabilities and supporting a data-enabled economy.
  • Environment. Ensuring communities and businesses have the necessary information, products, and services to prepare for and prosper in a changing environment.
  • Operational Excellence. Delivering better services, solutions, and outcomes that benefit the American people.

The creation of the strategic plan was a collaborative effort involving staff from every Department of Commerce bureau and serves as a foundation for economic growth and opportunity. The plan is in direct alignment with the  “Open for Business Agenda,” which reflects the Department’s role as the voice of business, and the Administration’s focus on economic growth and job creation. Department leaders and employees will use this plan to transform strategies into actions, and actions into results.

Read a summary of the plan or the entire plan.

Files

Under Secretary Hirschhorn Highlights Benefits of Export Control Reform for Small Businesses

Under Secretary of Commerce for Industry and Security Eric L. Hirschhorn today highlighted the significant progress of President Obama’s Export Control Reform Initiative (ECR) during a conference call with members of the National Small Business Association and its international trade arm, the Small Business Exporters Association.  ECR is aimed at bolstering national security and improving the system used by businesses for exporting sensitive items.  Small and medium-sized businesses stand to benefit from ECR’s emphasis on helping to improve the strength of the U.S. defense industrial base.

Hirschhorn told the group today that over the past four years, the Obama Administration has sought, through export control reform, to achieve greater regulatory efficiency and rationality and focus controls on the most significant items and destinations.

ECR encompasses defense and high technology commercial goods and technology.  A private industry study suggested that ECR could create hundreds of thousands of jobs over the long term. As ECR moves forward, BIS will continue to engage industry leaders, small business owners, and other stakeholders on these efforts to enhance national security, increase U.S. interoperability with allies, strengthen the American defense industrial base, and importantly, reduce unnecessary burdens, expenses, and red tape on American exporters.

BIS has an active outreach program of seminars, webinars, and teleconferences like today’s event, to assist exporters in understanding and complying with changes related to the ECR. The current schedule for seminars around the country is regularly updated on the BIS website.

United States Department of Commerce Plan for Orderly Shutdown Due to Lapse of Congressional Appropriations

Annual funding for the government expired on September 30. The Administration strongly believed that a lapse in funding should not occur. The Department is prepared for a lapse in funding that would necessitate a significant reduction in operations. Prior to a potential lapse in funding, the Office of Management and Budget (OMB) required the Department to submit a draft plan for agency operations (PDF) in the absence of appropriations (a “shutdown plan”).

The plan may be modified with additional guidance from the Office of Personnel Management and OMB, and may be changed by the Department, as circumstances warrant. This plan (PDF) complies with the guidance provided by the Office of Management and Budget, the Department of Justice and the Department of Commerce. All employees who are Presidentially Appointed, Senate Confirmed will remain on duty.

In compliance with the restrictions of the Anti-Deficiency Act, the Department of Commerce will maintain the following services and activities during a lapse in FY14 appropriations:

• Weather, water, and climate observing, prediction, forecast, warning, and support
• Law enforcement activities for the protection of marine fisheries
• Fisheries management activities including quota monitoring, observer activities, and regulatory actions to prevent overfishing
• Essential natural resource damage assessment activities associated with the Deepwater Horizon incident
• Water level data for ships entering U.S. ports, critical nautical chart updates and accurate position information.
• Patent and trademark application processing
• Operation of the national timing and synchronization infrastructure as well as the National Vulnerability Database
• Maintenance, continuity and protection of certain research property and critical data records
• All services of the National Technical Information Service
• Export enforcement – the ongoing conduct of criminal investigations, and prosecutions, and coordination with other law enforcement and intelligence agencies in furtherance of our national security
• Budget operations required to support excepted activities under a shutdown, such as tracking of obligations and funds control.

The following services and activities will not be available during a lapse in FY14 appropriations:

• Most research activities at NIST and NOAA (excluding real-time regular models on research computers used for Hurricane and FAA flight planning)
• Assistance and support to recipients of grant funding
• Technical oversight of non-mission essential contracts
• Services and activities provided by:
−Bureau of Economic Analysis
−Economic Development Administration
−Economics and Statistics Administration
−Minority Business Development Agency
−Bureau of the Census
• Most services and activities provided by the International Trade Administration

Secretary Pritzker Meets With Commerce Employees in Houston

Secretary Penny Pritzker meets with Houston-area Commerce Employees.

While in Houston, Texas today, Secretary Pritzker visited a U.S. Export Assistance Center (USEAC), part of the International Trade Administration (ITA), and met with USEAC employees and employees from the Bureau of Industry and Security’s (BIS) Houston field office. The secretary's visit was part of her latest stop on a nationwide listening tour and was an opportunity to thank the employees for their work for the Department of Commerce. 

USEACs are the domestic arm of ITA’s U.S. Commercial Service, which is comprised of an extensive network of trade specialists located in more than 100 U.S. cities and 80 countries worldwide. The specialists help American companies start exporting or expand their international business presence. Specific services include: world class market research; trade events that promote companies’ product or service to qualified buyers; introductions to buyers and distributors; and counseling and advocacy through every step of the export process.The Houston USEAC in particular has been working with companies in the energy, information technology and transportation sectors to support and increase U.S. exports.

The secretary also met with representatives from BIS’ Houston field office. The Houston office’s mission is to protect U.S. national and domestic security, foreign policy and economic interests. BIS operates a law enforcement program focused on sensitive exports to hostile entities or those that engage in onward proliferation, prohibited foreign boycotts and related public safety laws. The office accomplishes its mission through preventative and investigative enforcement activities and then pursuing appropriate criminal and administrative sanctions against export violators.

Proposed Cuts Hurt Job Creation, Economy, and the Middle-Class

The President has been clear that Republicans in Congress should work with Democrats to finish a budget that cuts wasteful spending while investing in jobs, the economy, and middle class families. Until Congress reaches a budget agreement, the President will not sign individual appropriations bills that simply attempt to enact the House Republican budget into law. That would hurt our economy and make draconian cuts to middle class priorities.

The House Commerce, Justice, Science appropriations bill demonstrates just how damaging the overall spending limits imposed by House Republican leadership are. The bill would cut $1 billion from the President’s request for the Department of Commerce, requiring a halt to investments in areas designed to help grow the economy, create jobs, and strengthen the middle class. The bill cuts more than $70 million from the International Trade Administration, which prevents placement of Foreign Commercial Service Officers in priority markets to help U.S. companies expand exports. That cut also limits our ability to attract foreign investment.  Instead of building on the momentum of resurgent American manufacturing as the President did in this budget, the bill terminates the Advanced Manufacturing Technology Consortia, which is helping the industry identify long-term manufacturing needs, and it cuts $33 million from the President’s request for the Manufacturing Extension Partnership (MEP). The MEP program is a federal-state partnership, which consists of centers located across the country that work directly with their local manufacturing communities to strengthen the competitiveness of our nation's domestic manufacturing base.

Spotlight on Commerce: Sharon Yanagi, Chief of Staff, Bureau of Industry and Security

Photo of Sharon Yanagi, Chief of Staff, Bureau of Security and Industry

Ed. note: This post is part of the Spotlight on Commerce series highlighting members of the Department of Commerce and their contributions to an Economy Built to Last.

Guest blog post by Ms. Sharon Yanagi, Chief of Staff, Bureau of Security and Industry

For over three years, I have served as the Chief of Staff at the Bureau of Industry and Security (BIS), the U.S. Commerce Department agency charged with administering the nation’s dual use export control system. In that capacity, I advise the Bureau Under Secretary on a range of policy, management and operations issues. I work closely with BIS leaders on Congressional and industry outreach and education designed to build support for the Bureau’s overarching policy initiative, the Export Control Reform Initiative. It is a major update of the U.S. export control system which will enhance both our national security and our economic competitiveness.  

In 2010, I was recruited back to BIS, having served there as Congressional and Public Affairs Director during the Clinton administration. At that time, we also tried to reform the U.S. export control system, which has not been comprehensively updated since the end of the Cold War. As Congressional director, I was part of a team that spent two years and hundreds of hours working to reauthorize our legislative authority–and in 1994, we failed. It’s not often that you fail to attain a major goal and are given the chance to try again. That is why I’m very grateful for the opportunity to work toward this important and long overdue policy goal in this administration.


Digital Government Strategy Brings Big Changes to the Commerce Department

Today marks the one-year anniversary of the Digital Government Strategy, an effort by the Administration to transform public-facing government services in line with 21st century expectations. The Department of Commerce has made some big strides in providing better information to citizens in a timely manner through multiple formats and increasing access to services on mobile devices. The goal is to make citizen services and information available anywhere, anytime, and on any device, and in formats that facilitate additional use by public developers and entrepreneurs.

Technology is changing so rapidly that nearly 50% of American adults own a smart phone today, up from 35% only one year ago. To help keep pace with the rapid deployment of mobile technology, Commerce is working hard to ensure our services and data are available to citizens in whatever format and on whatever device they prefer. For example, earlier this week, NOAA released a mobile app to provide free nautical charts for recreational boaters to ensure safer and easier boating. NOAA is putting the finishing touches on the iOS version of their Shortfin Mako Shark Live Release app for public release next week. The success of these apps builds upon the America’s Economy app from the U.S. Census Bureau that already has more than 90,000 downloads.

We also have released the additional data for public consumption. For example, the International Trade Administration has released an application programming interface (API) for Export Trade Events so that data can be used by other organizations to pull the most relevant events for their members. The Department's Bureau of Industry and Security created the Commerce Control List Order of Review Decision Tool, a new web-based tool to assist exporters in understanding changes being made as part of the Administration's Export Control Reform Initiative. All information available for public use is on Data.gov and also on our new Developer page. The release of this data and APIs is intended to provide developers, researches, entrepreneurs and others with the ability to access government data in ways that make it easier to use and program.

Spotlight on Commerce: Danny Meza, Senior Adviser to the Under Secretary for Industry and Security

Danny Meza, Senior Advisor to the Under Secretary for Industry and Security in the Office of Congressional and Public Affairs

Ed. note: This post is part of the Spotlight on Commerce series highlighting members of the Department of Commerce and their contributions to an Economy Built to Last.

Guest blog post by Danny Meza, Senior Adviser to the Under Secretary for Industry and Security in the Office of Congressional and Public Affairs

As Senior Adviser to the Under Secretary for Industry and Security in the Office of Congressional and Public Affairs, I advise the Under Secretary on legislative matters that impact the administration of export controls under the Commerce Department’s jurisdiction.

I was born and raised in San Antonio, Texas. I grew up during a time when local community leaders like former San Antonio Mayor and Housing and Urban Development Secretary Henry Cisneros, voter registration activist William C. Velasquez, and Congressman Henry B. Gonzalez worked to galvanize the Hispanic community by encouraging greater civic participation. Today, that same call to public service can be seen in leaders like Mayor Julian Castro and State Representative Joaquin Castro. The same call to public service led me to the Commerce Department in November of 2009.