U.S. Secretary of Commerce Penny Pritzker Delivers Keynote Address at Bureau of Industry and Security Annual Update Conference

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AS PREPARED FOR DELIVERY
Monday, October 31, 2016

Today, U.S. Secretary of Commerce Penny Pritzker delivered the keynote address at the Bureau of Industry and Security (BIS) Annual Update Conference Luncheon in Washington D.C. Speaking to more than 1,000 public and private sector leaders from across the export control landscape, Secretary Pritzker highlighted the key role BIS plays in national security and emphasized the vital work the agency has undertaken in support of significant foreign policy issues related to Cuba and Russia.

During her speech, Secretary Pritzker discussed the Bureau’s significant work over the last several years in support of U.S. economic growth and national security. In addition, Secretary Pritzker highlighted the success of this Administration’s export control reform initiative, which has helped rationalize the export control system and streamline the licensing process for exporters. Secretary Pritzker also illustrated BIS’ continued commitment to supporting U.S. national security and foreign policy through employing the range of tools at its disposal.

Remarks as Prepared for Delivery

Thank you, Eric, for your kind introduction and your tremendous leadership of the Bureau of Industry and Security. Over the last three and a half years, you have managed to make export controls both interesting and exciting for me. You have approached your role with both excellence and persistence. And the people in this room could not ask for a better steward of BIS during this critical time in its history. The first time I met Eric, I was a total newbie when it came to the work of BIS. Eric knew that I am a visual person. So to help me understand the challenges faced by exporters, he showed me these two aircraft switches.

They look the same, right? They even serve the same simple function: turning a circuit on and off. But before export control reform, one had no restrictions, and the other had the same restrictions as an entire military aircraft. Please don’t ask me which one is which. Clearly, our export control system had room for improvement.

Three and a half years later, not only do I finally have a solid grasp on the intricacies of BIS’s work, but this Administration has successfully implemented export control reform. Today, as I speak to you for the last time, I hope to leave you with a clear understanding of the two critical roles BIS plays in our country: protecting our national security and advancing U.S. foreign policy goals around the world.

Let me begin with national security. As you know, early in this Administration, President Obama and the Secretaries of Commerce, Defense, and State recognized the urgent need for a broad-based review and comprehensive reform of our export control system. Over the last seven years, we have taken significant steps to:

  • Rationalize our controls;
  • Increase interoperability with our closest allies;
  • Reduce incentives for companies in allied countries to avoid U.S. content, services, and technologies;
  • Ensure our government is focused on the transactions, end uses, and end users that matter the most; and
  • Make regulations more reliable and predictable.

We have revised the military and satellite controls on the U.S. Munitions List, and the corresponding controls on the Commerce Control List. We have also published rules that help you reach quicker, more reliable conclusions about applicable export control requirements. Our goal has been to rationalize the system and streamline the licensing process. But in the process, we have also reduced the amount of paperwork and applications you have to file – making it easier to sell your items.

As you all know, reform alone is not sufficient. An export control system is only as good as its enforcement. And during the Obama Administration, we have taken concrete steps to make enforcement of our laws more focused, more efficient, and more transparent. Our Information Triage Unit has helped us to make better decisions about proposed exports and helped us prevent diversions of controlled items. We also launched the interagency Export Enforcement Coordination Center to increase communications and resolve potential conflicts among the various federal enforcement agencies. In addition, BIS has made the civil penalty process more predictable and more transparent to the public.

Even with this progress, there is still much more work to be done. I know I said this last year, but I want to repeat it: export control reform is an ongoing effort. But in order to adjust for emerging threats and new commercial applications of your technologies, we continue to need your help. You know your products, your competitors’ products, your customers, and your marketplace better than we ever can. We need you to look out for questionable sales and let us know if an inquiry or a proposed sale seems suspicious to you. We need you to help us understand when we have needlessly restricted a product like the two switches I showed you.

For example, when we attempted to formulate an objective parameter to distinguish between military and civil aircraft engines, we proposed as a distinguishing feature whether the engine is capable of flying upside down. Imagine our surprise when industry told us that most civil aircraft engines are indeed capable of flying upside down, at least for a while though we all can agree that it’s not something we hope to experience on our next flight. We fixed the entry and now have a much clearer set of controls to distinguish military from civil aircraft engines. Clearly, your partnership was essential not only to that determination but to our overall success. Your presence and your voice matter tremendously to us.

Now, I would like to turn to BIS’s second key mission, which is equally as important: advancing U.S. foreign policy goals around the world. For example, BIS plays a critical role in our country’s policies toward Russia. As part of the effort to sanction their violation of international law through the invasion of Crimea and their misconduct in eastern Ukraine, BIS imposed targeted restrictions on exports to Russia. Looking at the data, those actions are clearly having an effect.

At last year’s conference, I spoke at length about BIS’s role in normalizing relations with Cuba. In the past two years, we have amended our regulations six times to help implement the President’s historic policy to engage and empower the Cuban people. Since 2015, our Department has authorized over $6 billion worth of exports to Cuba – ranging from medicine to agricultural products to items that ensure the safety of civil aviation. Our most recent action allows sales directly to the Cuban people. Although more steps are needed – including lifting the embargo – the changes made by BIS are helping to unlock Cuba’s economic potential and create opportunities for its people.

As you can see, the leadership of the Bureau of Industry and Security has been and will remain critical to protecting our national security, strengthening our economy, and advancing our country’s interests. All of us in this room will miss Eric’s leadership when he departs. But he will leave you in the capable hands of BIS’s experienced and talented career staff, including Deputy Under Secretary Dan Hill, Deputy Assistant Secretary Matt Borman, and Deputy Assistant Secretary Rich Majauskas. Now and into the next Administration, I have great confidence in this team.

Three and a half years after Eric handed me two aircraft switches, I understand – as I hope all of you do as well – the critical role of the BIS team. They ensure that our technological superiority is not employed against us on the battlefield. They help to create a level playing field, so all companies play by the same rules. They serve as a key steward of our nation’s security – our national security, our homeland security, our cybersecurity, and our economic security. Put simply: with your partnership, BIS helps keep America secure. Thank you very much.

Last updated: 2016-10-31 14:26

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