This morning, the U.S. Department of Commerce's Bureau of Industry and Security (BIS), the agency charged with administering the U.S. Export Administration Regulations (EAR), published a notice in the Federal Register requesting input from the exporting community regarding the EAR's foreign policy-based controls. 74 Fed. Reg. 46,088 (Sept. 8, 2009). While the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is responsible for implementing most economic sanctions programs, BIS has concurrent jurisdiction to implement controls based on U.S. foreign policy, and administers separate export restrictions targeting certain sanctioned countries and entities, as well as certain other controls targeting individuals, items and end uses (including, among others, encryption items and commodities controlled for crime control reasons). The public comment process will culminate in a determination by the Secretary of Commerce, likely in January 2010, whether to continue these foreign policy controls for another year.

BIS has requested input on a number of aspects of the foreign policy controls. Specifically, BIS is requesting information on: 1) the effect of the controls on sales of U.S. products to countries not targeted by the controls; 2) similar controls and licensing policies or practices maintained by foreign governments; 3) possible revisions to align the controls with multilateral practice and to make multilateral controls more effective; 4) the effect of the controls on the ability of the intended targets to obtain controlled items; 5) the effect of the controls on individual industries; 6) how to measure the effectiveness of the controls; and 7) the practical use of the controls on targeted countries, entities and individuals.

While it is anticipated that the Secretary will not amend the core premises of the EAR's foreign policy-based controls, the notice and comment process offers companies an opportunity to influence small changes at the outer edges of the regulations. Several issues could be ripe for discussion, such as: 1) the seeming inconsistency between BIS' and OFAC's controls, particularly with regard to exports and reexports to Southern Sudan for which no OFAC license is generally required but where a BIS licensing requirement almost always applies; 2) the interplay between foreign availability and the EAR foreign policy controls, wherein U.S. companies are at a competitive disadvantage in relation to their non-U.S. competitors in dealing with controlled commodities or entities; and 3) the expansive jurisdictional reach of the EAR on, for example, reexports by non-U.S. companies of items containing U.S.-origin content.