This document summarizes a presentation on preparing for compliance and enforcement under Export Control Reform. It discusses the Commerce Control List and US Munitions List categories that exports are regulated under. It also summarizes details from the 2012 BIS Annual Report to Congress about enforcement actions and penalties. The presentation provides an overview of the current status of Export Control Reform implementation and definitions of key terms like "specially designed." It also describes BIS online tools for classification assistance and highlights a recent consent agreement with Aeroflex, Inc over export control violations.

1. Preparing for Compliance and
Enforcement Under Export Control Reform
Ohio Foreign Commerce Association
Cleveland, Ohio
September 9, 2013
Law Offices of Jon P. Yormick Co. LPA
An International Law Practice
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2. Disclaimer
• The information provided is believed to be accurate
as of the date of the presentation, but is subject to
change without notice
• This presentation is designed for informational
purposes only and is not intended to be, nor should it
be deemed, specific legal advice. If such advice is
required, please consult with qualified legal counsel

3. Commerce Control List
Categories
0 – Nuclear Materials, Facilities and Equipment and Misc.
1 – Materials, Chemical, Microoganisms, and Toxins
2 – Materials Processing
3 – Electronics
4 – Computers
5 – Telecommunications and Information Security
6 – Sensors and Lasers
7 – Navigation and Avionics
8 – Marine
9 – Propulsion Systems, Space Vehicles and Related
Equipment

4. US Munitions List
•
Cat. I - Firearms, Close Assault Weapons and Combat Shotguns
•
Cat. II – Guns and Armament
•
Cat. III - Ammunition/Ordnance
•
Cat. IV - Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets,
Torpedoes, Bombs, and Mines
•
Cat. V - Explosives and Energetic Materials, Propellants, Incendiary Agents,
and their Constituents
•
Cat. VI - Vessels of War and Special Naval Equipment
•
Cat. VII -Tanks and Military Vehicles
•
Cat. VIII - Aircraft and Associated Equipment
•
Cat. IX -Military Training Equipment
•
Cat. X - Protective Personnel Equipment

5. US Munitions List (cont’d)
•
Cat. XI. - Military Electronics
•
Cat. XII - Fire Control, Range Finder, Optical and Guidance and Control
Equipment
•
Cat. XIII - Auxiliary Military Equipment
•
Cat. XIV - Toxicological Agents, Including Chemical Agents, Biological Agents,
and Associated Equipment
•
Cat. XV - Spacecraft Systems and Associated Equipment
•
Cat. XVI - Nuclear Weapons, Design and Testing Related Items
•
Cat. XVII - Classified Articles, Technical Data and Defense Services Not
Otherwise Enumerated
•
Cat. XVIII - Directed Energy Weapons
•
Cat. XIX - [Reserved]
•
Cat. XX - Submersible Vessels, Oceanographic and Associated Equipment

6. BIS FY 2012 Annual Report to Congress
• Under Secretary Hirshhorn: “Enforcement is an essential
aspect of the BIS mission.”
• Asst. Sec. for Export Administration Wolf: “The greatest
number of license application approvals under a single
commodity classification was for chemical manufacturing
facilities and equipment (ECCN 2B350)…”
• “…BIS conducted 26 deemed export license on-site
compliance reviews to confirm implementation of
technology control plans and other conditions associated
with those licenses.”

7. BIS FY 2012 Annual Report to Congress
• Asst. Sec. for Export Enforcement Mills: “…BIS
investigations resulted in the completion of 42
administrative export and antiboycott cases against
individuals and businesses and $7,442,600 in civil
penalties…”
• 10 antiboycott violation cases, totaled $142,600
• 32 administrative settlements = $228,000+ average

8. ECR: Where are we now?
• October 15 – Cats. VIII and XIX
• 600 Series – defense articles on
CCL
• Cat. VIII > ECCN 9A6xx
• Get in the queue?
TRANSITION ≠ DE-

9. ECR: Where are we now?
• “Specially Designed” – “catch and release”
• (a) – which commodities and software
• (b) – which parts, components,
accessories, attachments, and software are
excluded

10. “Specially Designed” Light
• (a) Except for items described in (b), an “item” is “specially
designed” if it:
– As a result of “development” has properties peculiarly
responsible for achieving or exceeding the performance
levels, characteristics, or functions in the relevant ECCN
or U.S. Munitions List (USML) paragraph; or
– Is a “part,” “component,” “accessory,” “attachment,” or
“software” for use in or with a commodity or defense
article „enumerated‟ or otherwise described on the CCL
or the USML.

11. “Specially Designed” Extra Light
• (b) A “part,” etc. … is not “specially designed” if it:
• Is a fastener (e.g., screw, bolt, nut, nut plate, stud, insert, clip, rivet, pin),
washer, spacer, insulator, grommet, bushing, spring, wire, solder;
• Has the same function, performance capabilities, and the same or
„equivalent‟ form and fit, as a commodity or software used in or with an
item that:
• Is or was in “production” (i.e., not in “development”); and not on CCL or
USML or controlled for AT only;
• Was or is being developed as a general purpose commodity or software
(no specific knowledge) or
• Was or is being developed with “knowledge” that it would be for use in
or with commodities or software… exclusively for use in or with EAR99
commodities or software.

12. BIS Decision Tools
Specially Designed
http://www.bis.doc.gov/index.php/speciallydesigned-tool
Commerce Control List (CCL) Order of Review
http://www.bis.doc.gov/index.php/exportcontrol-classification-interactive-tool

13. Aeroflex, Inc. Consent Agreement
• 158 violations
• “…systemic and longstanding nature of
the violations based on improper
product classifications…”
• $8M – 50% on remedial measures

14. Thank you
Jon P. Yormick
Attorney and Counsellor at Law
Law Offices of Jon P. Yormick Co. LPA
jon@yormicklaw.com
Toll Free: +1.866.967.6425
Mobile: +1.216.269.5138
Buffalo | Chihuahua† |Cleveland
†Affiliate
office