The US Commerce Department’s Bureau of Industry and Security (“BIS”) has issued amendments to the Export Administration Regulations, 15 C.F.R. Parts 730-774 (“EAR”) that, most significantly, define the scope of “standards-related activities” that are subject to US export controls jurisdiction under the EAR.  The purpose of these amendments is to ensure that US export controls and associated compliance concerns do not impede the participation and leadership of US companies in legitimate standards-related activities.  BIS also issued other amendments that are more technical or procedural in nature. 

Specifically, on July 18, 2024, BIS:

  1. issued an interim final rule that amended the provisions related to “standards-related activities” in the EAR with a comment period that ends on September 16, 2024.  BIS issued a correction to the interim final rule on July 24, 2024.
  2. issued a final rule that redesignated the Securing the Information and Communications Technology and Services Supply Chain Regulations, 15 C.F.R. Part 791 (“ICTS Supply Chain Regulations”). 

Standards-Related Activities and the EAR

The interim final rule amended the EAR and revised the scope and terms used to describe “standards-related activities” that are subject to the EAR.  Since 2019, BIS has made a number of revisions to the EAR that have impacted standards-related activities.  Some of the initial changes prompted concerns that US export controls could impede US companies’ leadership and participation in global standards bodies and related activities.  As a result, on September 9, 2022, BIS published an interim final rule, “Authorization of Certain “Items” to Entities on the Entity List in the Context of Specific Standards Activities,” that amended the EAR to authorize the release of specified items subject to the EAR when such release is for a “standards-related activity” as defined in the EAR.  We previously blogged about this rule here.

Based on public comments received from the September 9, 2022 rule, BIS has proposed the following amendments to the EAR:

  1. Authorization for “Standards-Related Activity” in EAR § 734.10

The interim final rule moved the authorization for “standards-related activity” to EAR § 734.10 from EAR § 744.11 (i.e., License requirements that apply to entities acting or at significant risk of acting contrary to the national security or foreign policy interests of the United States).  BIS also made confirming changes to § 744.16 (i.e., Entity List End-User and End-Use Based Controls) and the introductory paragraph to Supplement No. 4 to EAR Part 744 (i.e., the Entity List).  These changes do not impact the existing provisions in EAR § 734.3 and § 734.10 regarding patents and whether they are subject to the EAR.

  1. Revised Definition of “Standards-Related Activity”

The interim final rule revised the existing definition of “standards-related activity” in order to clarify that a “standards-related activity” includes activities conducted with the intent to “publish” a standard as well as those conducted for an already “published” standard.  The definition of “standards-related activity” has been moved from EAR Part 772 to § 734.10.

The revised language reads as follows:

(b) Standards-related activity. A standards-related activity includes the development, adoption, or application of a standard (i.e., any document or other writing that provides, for common and repeated use, rules, guidelines, technical or other characteristics for products or related processes and production methods), including but not limited to conformity assessment procedures. A “standards-related activity” includes an action taken for the purpose of developing, promulgating, revising, amending, issuing or reissuing, interpreting, implementing or otherwise maintaining or applying such a standard. When released for a “standards-related activity,” “technology” or “software” is not subject to the EAR provided it meets at least one condition in both paragraphs (b)(1) and (2) of this section:

(1) The “technology” or “software” is:

(i) Designated EAR99;
(ii) Controlled on the CCL for anti-terrorism reasons only; or
(iii) For the following ECCN “items” level paragraphs of “technology” or “software” specifically for the “development,” “production,” or “use” of cryptographic functionality once the release is for a “standards-related activity:” “software” that is classified under ECCN 5D002.b or 5D002.c.1 (for equipment specified in ECCN 5A002.a and 5A002.c only); “technology” that is classified under ECCN 5E002 (for equipment specified in ECCN 5A002.a, .b and .c); and “technology” for software controlled under ECCN 5D002.b or .c.1 (for equipment specified in ECCN 5A002.a and .c only) when the release is for a “standards-related activity;” and

(2) The “standards-related activity:”

(i) Is for a “published” standard; or
(ii) Occurs with the intent that the resulting standard will be “published.”

On July 24, 2024, BIS issued a correction to the interim final rule, which had inadvertently reverted changes to EAR Part 744 that were amended in a final rule that BIS published on June 18, 2024.  The correction reinserted those changes.

BIS has requested public comments on the interim final rule, which must be received by BIS no later than September 16, 2024.  If you wish to submit a comment on the interim final rule or have any questions, please contact any member of our Outbound Trade Compliance team.

Redesignation of ICTS Supply Chain Regulations

On July 18, 2024, BIS also issued a final rule that redesignated the regulations governing the procedures for the review of certain transactions involving information and communications technology and services supply chain.  This final rule is a procedural action that moves the ICTS Supply Chain Regulations from Subtitle A to Subtitle B, Chapter VII in Title 15 of the Code of Federal Regulations, where BIS regulations are located.  This reflects the transfer of responsibility from the Secretary of Commerce to BIS, Office of Information and Communications Technology and Services.  It does not impact any processes by the Commerce Department or BIS and will have no impact on any public or private entity outside of BIS.

Author

Washington, DC

Author

Washington, DC

Author

Washington, DC