Reminder: Annual Burma Responsible Investment Reports Must be Submitted to State Department on July 1, 2013

The State Department's Burma (Myanmar) Responsible Investment Reporting Requirements have received final approval from the Office of Management and Budget and U.S. persons having an aggregate new investment in Burma over $500,000 must submit their first annual report by July 1, 2013.

By way of background, when the State Department announced on May 2012 that the U.S. would suspend sanctions on Burma, the U.S. Government stated that it would require U.S. companies that engaged in new investment in Burma exceeding $500,000 per year to submit an annual “Responsible Investment” report to the State Department. 

The Responsible Investment reports, which must be filed electronically with the State Department, include information on a wide range of policies and procedures with respect to their investments in Burma, including human rights, labor rights, land rights, community consultations and stakeholder engagement, environmental stewardship, anti-corruption, arrangements with security service providers, risk and impact assessment and mitigation, payments to the government, any investments with the Myanma Oil and Gas Enterprise (MOGE), and contact with the military or non-state armed groups.

The State Department will use the confidential and public versions of the reports that are submitted to conduct consultations with U.S. businesses to encourage and assist them to develop policies and procedures to address various issues resulting from their investments and operations in Burma. The State Department will also issue a public report on the various efforts undertaken by U.S. companies in Burma. 

The full text of the of the Burma Responsible Investment Reporting Requirements can be found here.  

OFAC's General License No. 17 that authorized new investment in Burma can be found here.

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Registration is Now Open for BIS Export Controls Conference to be Held in Washington, DC from July 23-25, 2013.

Registration is now open for the 26th Annual Update Conference on Export Controls and Policy that will be held in Washington, DC from July 23-25, 2013 at the Washington Hilton hotel. 

The theme of this year’s conference is, “Export Control Reform: Fulfilling the Promise.” The agenda will focus on the recently published and proposed rules implementing the Obama Administration's Export Control Reform initiatives.

Recurring topics, such and sanctions compliance, export enforcement, deemed exports and encryption also will be covered. The very useful and popular roundtable discussions with staff from BIS offices will also be featured again this year.

The current agenda for BIS Update 2013 is found here.

The registration link for BIS Update 2013 is found here.

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DDTC Issues Proposed Changes to Definition of "Defense Services" in the ITAR

On May 24, 2013 the State Department's Directorate of Defense Trade Controls (DDTC) published a proposed rule that would amend U.S. Munitions List Category XV which includes spacecraft systems and related articles. 

Also included in the proposed USML Category XV rule is a proposed new definition of the phrase "defense services" in section 120.9 of the International Traffic in Arms Regulations (ITAR).

This is the second proposed change to the definition of "defense services" in the ITAR. The first proposed revision published in April 2011 generated nearly 40 comments seeking additional changes to the definition.

Based on the public comments received, DDTC made a number of changes to the proposed definition of "defense services", including:

• distinguishing between the concepts of "integration" and "installation";
• adding the term ‘‘tactical,’’ to differentiate training in such employment from the type that is not to be within the definition of a defense service (training in basic operation);
• specifying that the furnishing of assistance for certain spacecraft related activities, including launch failure analysis, is a defense service.
• Modifying ITAR section 124.1(a), which describes the approval requirements of manufacturing license agreements and technical assistance agreements, to remove the requirement of Department approval for the provision of a defense service using public domain data or data otherwise exempt from ITAR licensing requirements.

Public comments on the current proposed definition of "defense services" must be submitted to DDTC by July 8, 2013.

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Treasury Department Publishes List of Countries That May Require Participation With an International Boycott

The U.S. Department of the Treasury today published in the Federal Register the list of list of countries that may require participation in, or cooperation with, an international boycott, as defined by section 999(b)(3) of the Internal Revenue Code of 1986.

Treasury has advised that the following nine countries may require participation in, or cooperation with, an international boycott:

1. Iraq
2. Kuwait
3. Lebanon
4. Libya
5. Qatar
6. Saudi Arabia
7. Syria
8. United Arab Emirates
9. Yemen 

Iraq was added to this list in August 2012.

This list of countries is used for IRS boycott reporting purposes. U.S. law requires companies to report “operations in or relating to a boycotting country” on IRS Form 5713 submitted with corporate tax returns.

This list is not applicable to the antiboycott provisions in Part 760 of the Export Administration Regulations (EAR) that are administered and enforced by the Bureau of Industry and Security (BIS).

The EAR requires that all reportable boycott requests relating to unsanctioned foreign boycotts be reported to BIS on a quarterly basis. Such requests can come from the countries listed above and others, such as Bangladesh, Pakistan and Malaysia.

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BIS Unveils Two New Export Control Reform Web-Based Decision Tools

As part of the Bureau of Industry and Security's (BIS) efforts to assist exporters comply with the Initial Implementation of Export Control Reform final rule published in the Federal Register on April 16, 2013, BIS has developed two new web-based decision tools to assist users in understanding and applying the Commerce Control List (CCL) Order of Review and the definition of "Specially Designed".

These two new Export Control Reform decision tools were posted today on the BIS website and are available for use at the following links: 

Commerce Control List (CCL) Order of Review Decision Tool — The Order of Review decision tool is intended to help exporters classify items that are subject to the Export Administration Regulations (EAR) and is based on the new CCL Order of Review in Supplement No. 4 to part 774 of the EAR. The CCL Order of Review provides guidance for how to classify items in light of the addition of the 600 series Export Control Classification Numbers (ECCNs) to the CCL and the new definition of "specially designed."

 "Specially Designed" Decision Tool — This tool is intended to assist exporters in determining whether items that are subject to the EAR are "specially designed. The "Specially designed" decision tool will lead to one of three results:

1. The item is "specially designed" on the CCL;
2. The item is not "specially designed" on the CCL; or
3. Obtain guidance on the next steps to take if you have difficulty in answering whether an item is 'caught' or 'released' under the "specially designed" definition.

BIS previously implemented the Strategic Trade Authorization (STA) decision tool to help exporters determine if they are eligible to use and be in compliance with License Exception STA.

While these decision tools are now online, the final rules implementing Export Control Reform will not take effect until October 15, 2013.

The final rules on implementation on Initial Implementation of Export Control Reform published by BIS and the State Department's Directorate of Defense Trade Controls (DDTC) can be found at the following links:

• BIS Final ECR Implementation Rule
• DDTC Final ECR Implementation Rule 

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