Bureau of Industry and Security February 2014 – Federal Register Recent Federal Regulation Documents

This proposed rule clarifies the responsibilities under the Export Administration Regulations (EAR) of parties involved in export transactions where the foreign principal party in interest (FPPI) is responsible for the transportation out of the United States of items subject to the EAR. These transactions are currently referred to as ``routed export transactions.'' In such transactions, the U.S. principal party in interest (USPPI) may retain the responsibility and authority under the EAR to determine license requirements and, if necessary, to apply for a license from the Bureau of Industry and Security (BIS). Alternatively, if certain criteria are met, the USPPI may allow the FPPI, acting through a U.S. agent, to assume these responsibilities and authority. To enhance clarity, this proposed rule would remove the defined term ``Routed Export Transaction'' from the EAR and create a new term to better define certain transactions of particular interest to BIS, specifically a ``Foreign Principal Party Controlled Export Transaction'' which is a transaction where an FPPI which is responsible for the export of items subject to the EAR, also assumes the authority and responsibility for licensing requirements. This proposed rule also would refine certain procedures for creating a ``Foreign Principal Party Controlled Export Transaction''. These proposed changes are intended to facilitate enhanced public understanding of the EAR by eliminating perceived discrepancies between the EAR and the Bureau of the Census's Foreign Trade Regulations (FTR) with respect to the definition of a ``routed export transaction.'' Specifically, this proposed rule will clarify the responsibilities of each party engaged in a transaction subject to the EAR and provide clearer instructions for USPPIs to delegate responsibility for license requirement determinations.