ACI’s Practical Forum on
ADVANCED EAR COMPLIANCE
John Sonderman
Director, Office of Export Enforcement, Bureau of Industry and Security
U.S. Department of Commerce
September 25–26, 2024
Hilton Chicago Magnificent Mile Suites, Chicago, IL
How to Strengthen EAR and Anti-Boycott Compliance Amid Evolving Geopolitics and Economic Sanctions
DISTINGUISHED GOVERNMENT SPEAKERS:
Cathleen Ryan Director, Office of Antiboycott Compliance, Bureau of Industry and Security
U.S. Department of Commerce
Paul Ahern Chief Counselor for Enforcement, Office of Terrorism and Financial Intelligence (TFI)
U.S. Department of Treasury
DON’T MISS OUT ON CRITICAL, NEED-TO-KNOW BEST PRACTICES FOR:
ɖ BIS Part 732 “Know Your Customer” Guidance, Supply Chain Screening and Red Flags
ɖ Preventing Supplier Circumvention and Upgrading Your Screening Program
ɖ Complying with Anti-Boycott and 15 CFR Part 760 of the EAR
Associate Sponsors:
Aaron Tambrini Special Agent in Charge of Export Enforcement, Bureau of Industry and Security
U.S. Department of Commerce
ɖ EAR 734.99 (b), Foreign Direct Product Rule (FDPR) and 734.4/de minimis Thresholds
ɖ EAR Part 734.20/734.18 Requirements and Exceptions: Deemed Exports, Cloud Computing and End-Use Controls
ɖ Russia Sanctions and Export Compliance
Networking Sponsor:
MEET AND BENCHMARK WITH EXPERTS FROM:
y Leonardo DRS
y General Motors
y Google
y Polaris
y W. W. Grainger
y Caterpillar
y Boeing
y Fluor Corporation
y Field Aerospace
y ESAB
y Honeywell
y Northrop Grumman
y Intel
y Albemarle
y TE Connectivity
y L3 Harris Technologies
y Sarcos Robotics
y Navistar
y Dell Technologies
Expert Speaker Faculty
GOVERNMENT FACULTY
John Sonderman
Director, Office of Export Enforcement, Bureau of Industry and Security
U.S. Department of Commerce
Cathleen Ryan
Director, Office of Antiboycott Compliance, Bureau of Industry and Security
U.S. Department of Commerce
Paul Ahern
Chief Counselor for Enforcement, Office of Terrorism and Financial Intelligence (TFI)
U.S. Department of Treasury
Aaron Tambrini
Special Agent in Charge of Export Enforcement, Bureau of Industry and Security
U.S. Department of Commerce
2024 CO-CHAIRS
Lexia B. Krown
Vice President, Global Trade Compliance
ESAB
Todd Willis
Global Trade Advisor
Caterpillar Inc.
Bart M. McMillan
Partner
Baker McKenzie
DISTINGUISHED SPEAKER FACULTY
Christy Areste
Senior Manager, Global Trade Compliance & Anti-Corruption W. W. Grainger
Kathy Canaan
Global Director, Trade Compliance Fluor Corporation
Heather Sroka
Senior Trade Counsel
Intel
Maria Assusa
Director, Export Compliance
Honeywell
Grant Hosea
Director, Global Trade Compliance Albemarle
Lori Romero
Director, Trade Counsel L3 Harris Technologies
Barbara Dudas
Vice President, Compliance
Dexter Magnetic Technologies
Alexandra Landis
Senior Counsel, Director of Compliance and Export Controls
Palladyne AI Corp
Jeff Sammon
Senior Director, Global Trade TE Connectivity
Eric J. Larsen
Trade Compliance Manager
Boeing
Matthew Fogarty
Senior Counsel, Trade General Motors
Marcos Czacki
General Global Counsel & Compliance Officer Navistar México
Joe Schoorl
Export Compliance Counsel Google
Michelle Aragon
Senior Manager Trade Compliance
Leonardo DRS
Ethan Lekate
Legal Director, Compliance
Dell Technologies
Bryce Bittner
Managing Counsel, International Trade McKinsey & Company
Jana del-Cerro Partner Crowell & Moring LLP
Bob Vander Lugt Partner
Little, Rothwell & Vander Lugt, PLLC
Josh Gelula Counsel Hogan Lovells
Jason Silverman
Partner
Dentons
Jeffrey Richardson
Principal
Miller Canfield
Katelyn M. Hilferty
Senior Associate
Morgan Lewis& Bockius LLP
Susan Bridgman
General Counsel and Chief Compliance Officer Field Aerospace
Waqas Shahid
Vice President, Forensic Services
Charles River Associates (CRA)
Amanda Marshall
Senior Analyst
Sayari
Janet K. Kim
Partner
Baker McKenzie LLP
Michael L. Burton
Partner
Jacobson Burton Kelley PLLC
MEDIA PARTNERS
PRE-CONFERENCE WORKSHOP A TUESDAY, SEPTEMBER 24
9:00 am–12:30 pm (Registration opens at 8:30 am)
The Essentials of the China Advanced Computing and Semiconductor Rule: A Deep Dive into TGLs, Impacted ICs, Gap Analysis and Evolving Requirements
In this closed-door, smaller-group workshop, benefit from a deep-dive analysis of semiconductor rule compliance. This working-group session will be supported by speaker-prepared materials, interactive Q&A and compliance takeaways that you can leverage immediately post-conference. This workshop also sets the stage for the more complex compliance issues covered in the main conference.
• Restrictions on US persons who support the development or production of integrated circuits (IC’s) in China now requires a license
» What kind of ICs are involved?
» What ECCNs are relevant?
» Are any license exceptions available?
• New foreign direct product rules focused on otherwise uncontrolled foreign-origin content for advanced computing and supercomputer-related applications in China
» Expanded “Entity List FDP Rule” (§ 734.9(e)(2)
» New “Supercomputer FDP Rule” (§ 734.9(i)
» New “Advanced Computing FDP Rule” (§ 734.9(h)
• Updating your licensing approach for items controlled under ECCNs 5A002 or 5D002 that meet or exceed the performance parameters of the new ECCNs 3A090 or 4A090
• Licensing mass market encryption hardware and software items controlled under ECCNs 5A992 or 5D992
• Licensing policies and Temporary General Licenses
• The April 4th rule, or “Correction Rules”
• Gap analysis: Updating compliance programs to make sure legal, engineering, and trade compliance are all in the loop with these new controls
Ethan Lekate Legal Director, Compliance Dell Technologies
Josh Gelula Counsel Hogan Lovells
PRE-CONFERENCE WORKSHOP B
TUESDAY, SEPTEMBER 24
1:30–5:00 pm (Registration opens at 1:00 pm)
Securing ITAR/EAR License Approvals and Managing Authorizations and Provisos—From Filling out the Application to Preventing Delays and Beyond
During this in-depth, practical session, the expert speakers will take you through the practical steps and pitfalls to avoid through the use of sample license applications, concrete examples and speaker-prepared reference materials.
I. EAR Licenses: Essential elements of Form BIS-748P and the SNAP-R system
• 600 Series licensing and associated challenges
• Preparing supporting documentation verification of ECCNs
» end-use of items to be exported
» documents supplied by the prospective purchaser
» international import certificate
» statement of ultimate consignee and purchaser
• Using STA and other complex EAR Exceptions
II. ITAR Licenses: A Deep Dive into Requirements for Securing a DSP-5, DSP-73, or DSP-61 and DSP-85
• When a DSP-5, DSP-73, or DSP-61, DSP-85 is required: The approvals process, how to expedite the process, timeframes and how to reduce the risk of delay
• Ensuring you get hardware and tech data included on a single license
• Returns: Special considerations
• Licenses in furtherance of agreements
• Constructing an accurate scope of export in your license application
• Drafting a license application: What to include, how to fill out the forms using DTrade2, and how to submit the application
III. Managing Authorizations, Provisos, and Limitations
• Understanding the distinction between application-based authorizations and regulation-based authorizations: Procedures around both types
• Managing the complexity of authorizations, which likely contain extensive requirements and provisos involving engagement from functions outside of the global trade function
• How do you manage and coordinate authorizations involving engagement from multiple functions around the enterprise?
• Storing and managing technical data within companies that operate across borders
Barbara Dudas
Vice President, Compliance
Dexter Magnetic Technologies
Bob Vander Lugt
Partner
Little, Rothwell & Vander Lugt, PLLC
MAIN CONFERENCE DAY ONE
WEDNESDAY, SEPTEMBER 25
8:45 Opening Remarks from the Co-Chairs
Lexia B. Krown Vice President, Global Trade Compliance ESAB
9:00 FIRESIDE CHAT
Todd Willis Global Trade Advisor
BIS Enforcement and Coordination with the Treasury Department
John Sonderman Director, Office of Export Enforcement, Bureau of Industry and Security U.S. Department of Commerce
Paul Ahern Chief Counselor for Enforcement, Office of Terrorism and Financial Intelligence (TFI) U.S. Department of Treasury
9:45
• Identifying Red Flags: Abnormal circumstances in a transaction that indicate that the export may be destined for an inappropriate end-use, end-user, or destination
• BIS efforts to work in partnership with industry
• Concrete examples of clear policies and effective compliance procedures
• Obtaining documentary evidence concerning the transaction, both in the licensing process and in all export control documents
• Instructing the salesforce: Mandating they receive an affirmation from the intermediary around the definition of the actual end-use, end-user and ultimate country of destination
• Reevaluating all the information after the Red Flag inquiry to ensure legitimacy
Aaron Tambrini Special Agent in Charge of Export Enforcement, Bureau of Industry and Security U.S. Department of Commerce
Lori Romero Director, Trade Counsel L3 Harris Technologies
Bart M. McMillan Partner
10:45 Networking Break
11:15 FIRESIDE CHAT
The Office of Anti-Boycott (OAC) Priorities and Expectations
Cathleen Ryan Director, Office of Antiboycott Compliance, Bureau of Industry and Security U.S. Department of Commerce
11:45 ANTI-BOYCOTT COMPLIANCE AND RISK MANAGEMENT (HYPOTHETICAL
Anti-Boycott and 15 CFR Part 760
of the EAR: Clarifying the Six Prohibitions, Required Reports and Compliance Expectations
Part 760 of the EAR, “Restrictive Trade Practices or Boycotts,” has seen increased compliance and enforcement attention over the past 12 months. In March 2024, for the first time, BIS’ Office of Antiboycott Compliance released a public list of companies who have been identified as having made reportable boycott requests. New enforcement actions have seen companies pay penalties due to Part 760 compliance failures.
• How are multinationals keeping up with the growing list of embargoes and what are the best practices around creating anti-boycott programs to remain compliant?
• Training all levels of employees about antiboycott compliance, including senior sales and supply chain, customer service, shipping, and receiving personnel
• Screening your sales: Reviewing all sales for antiboycott related requests, including purchase orders, contracts, request for quotations, and other discussions or terms/conditions being agreed to as part of the sale
• Developing an escalation process for reporting any such requests or questions internally
• Reporting requests: Form BIS 621-P for single transactions or BIS 6051P for multiple transactions involving boycott requests received in the same calendar quarter
12:30 Networking Luncheon
SCENARIOS AND AUDIENCE POLLING)
Heather Sroka Senior Trade Counsel Intel
Susan Bridgman General Counsel and Chief Compliance Officer Field Aerospace
1:45 CHINA THINK TANK #1: TWO TRICKY AREAS (HYPOTHETICALS AND AUDIENCE POLLING)
EAR 734.99 (b), Foreign Direct Product Rule (FDPR) and 734.4/de minimis Thresholds: How to Apply Complex Requirements in Practice and Avoid Key Compliance Traps
What are the emerging barriers to staying up-to-speed on evolving China-related export compliance decision-making? What are the mission-critical points to address and how to resolve intensifying compliance dilemmas?
Using hypothetical scenarios and audience feedback, this session will leave you with the practical tools for effective compliance and monitoring
• Avoiding key pitfalls when applying the FDPR
• de minimis threshold decision-making
» Controlled Content: U.S. origin items that require BIS authorization (a license or license exception)
• Managing the impact of the FDPR rule: How do you tighten compliance oversight around third-party due diligence procedures?
» Conducting a gap analysis: Updating your compliance protocols to make sure legal, engineering, and trade compliance are all in the loop
• Employee training and monitoring: Determining the right amount and frequency of training
• Third-party management
» Developing a model that stratifies your risk based on third parties — and how to perform due diligence accordingly
» What to do with information uncovered during the vetting process: How to evaluate red flags
Christy Areste Senior Manager, Global Trade Compliance & Anti-Corruption
W. W. Grainger
Jana del-Cerro Partner
Crowell & Moring LLP
• Identifying critical compliance pain points
• Interpreting and applying:
» Russia/Belarus EAR 734.9(f)
» EAR supplements and restrictions on exports “for use in” Russia
» Availability of exemptions and licenses for encryption activities in Russia
• OFAC developments and General Licenses: Scope and limitations
• Russian countermeasures on withdrawing companies and expropriation decrees
• Alignment with US sanctions and export controls. and key differences
Todd Willis Global Trade Advisor
Caterpillar Inc.
Lexia B. Krown Vice President, Global Trade Compliance ESAB
Waqas Shahid Vice President, Forensic Services
Charles River Associates (CRA)
Jason Silverman Partner
Dentons
3:45 Networking Break
4:00 CASE STUDIES, HYPOTHETICAL SCENARIOS AND AUDIENCE POLLING
EAR Licensing, Jurisdiction and Classification Challenges: 600-Series Classification, CCATS and the Lesser-Known Interplay of the ITAR
Building on the pre-conference licensing workshop, the expert speakers will take you through a series of real-world hypothetical scenarios that will illustrate how to navigate grey areas and put theory into practice.
Jurisdiction and classification considerations for highly complex or novel situations:
• Applying useful sources to perform jurisdictional and classification analysis
• How to leverage the commodity jurisdiction process (CJ, CCATS and Company internal)
• Complex issues in 600-series classification
Licensing strategies:
• Big picture considerations when deciding to apply for a license or utilize an exception/exemption
• Developing data sheets, end-user statements and cover letters
5:00 Close of Day One
Marcos Czacki
General Global Counsel & Compliance Officer
Navistar México
Maria Assusa
Director, Export Compliance
Honeywell
MAIN CONFERENCE DAY TWO
THURSDAY, SEPTEMBER 26
8:45 Opening Remarks from the Co-Chairs
Lexia B. Krown Vice President, Global Trade Compliance ESAB
Todd Willis Global Trade Advisor Caterpillar Inc.
9:00 RUSSIA AND COMPLIANCE SESSION # 2 (HYPOTHETICAL SCENARIOS AND AUDIENCE POLLING)
Part 1 — Supplier Circumvention and Your Screening Program: Monitoring Third-Party Intermediaries to Mitigate the Risk of Export and Sanctions Violations
In light of recent export controls and additional trade restrictions on Russia and Belarus, and changes to historical transshipment routes, the risk of product diversion/circumvention has increased considerably. What can exporters do to better identify the signs of actual or suspected violations?
• Conducting thorough due diligence on partners and suppliers
• Monitoring and auditing transactions and supply chains
• Staying updated on sanctions lists and regulatory changes
• When to seek outside counsel
Kathy Canaan Global Director, Trade Compliance Fluor Corporation
Matthew Fogarty Senior Counsel, Trade General Motors
10:00 Part II — INDUSTRY-SPECIFIC BENCHMARKING ROUNDTABLES
Engage in worthwhile, industry-specific smaller-group discussions, benchmarking and Q&A moderated by seasoned experts:
• AEROSPACE & DEFENSE
• LIFE SCIENCES
• ENERGY • MANUFACTURING
11:00 Networking Break
• TECH & TELECOM
• LOGISTICS & SUPPLY CHAIN
Amanda Marshall Senior Analyst Sayari
11:15 CHINA THINK TANK #2: HYPOTHETICAL SCENARIOS
MEU Part 744 and MIEU 1753 (a) (2): The Biggest Grey Areas and How to Address Them
• MEU Part 744: Expanded new license requirements for exports, reexports, or transfers (in-country) subject to Part 744 involving a person designated as an SDN under one of the eleven OFAC sanctions programs
» Part 744 SDN-related end-user sections and the eleven new SDN-related restrictions
• MIEU 1753 (a): Classification, screening, and approvals
» Classification decisions: Creating documentation supporting how you classified your items under the CCL
» Screening results: Maintaining records of all screenings performed for customers, intermediaries, and end-users
» Licenses and approvals: Keeping copies of all licenses obtained, and communications with BIS
» End-use statements: Documentation from customers regarding the intended use of the products
12:00 GENERATIVE AI AND EMERGING TECHNOLOGY
Alexandra Landis
Senior Counsel, Director of Compliance and Export Controls Palladyne AI Corp
Michael L. Burton Partner
Jacobson Burton Kelley PLLC
Managing the Intersection of Cloud Computing, AI Regulation and EAR Compliance: What the AI EO and Recent EAR Changes Mean for Your Program in Practice
The rapid pace of AI development has created novel questions for governments and export control practitioners. We are in the early stages of what could represent a major shift in how export controls operate, and it is worth taking time to consider what steps have already been taken and what may be considered in the future.
• Overview of generative AI
• How existing export controls apply to AI
• The AI EO: Clarifying key terms and requirements, including cloud ”Infrastructure as a Service” provisions
• Ongoing debates and open questions
12:45 DATA ANALYTICS CASE STUDY
Joe Schoorl Export Compliance Counsel Google
Janet K. Kim Partner Baker McKenzie LLP
Using Data Analytics and Metrics to Enhance Your International Trade Compliance Program
• KPIs to measure broker effectiveness: On time document submission, post entry audits, weighting average compliance efforts to specific data elements
• Ways to keep up to date with product classifications: Using open PO reports to prioritize, focus on unclassified material, and to review previous classifications
• Management of potential deemed exports: Employee/manager locations, SOW, license reviews and what to do if there is a change in the SOW
• Metrics for denied party screening to help detect screening errors and other due diligence pitfalls
» Utilize screening data to see release times and minimize false positives
Grant Hosea Director, Global Trade Compliance Albemarle
CASE STUDIES: 734.20/734.18 (HYPOTHETICALS AND AUDIENCE POLLING)
to Apply EAR Part 734.20/734.18 Requirements and Exceptions: Deemed Exports, Cloud Computing and End-Use Controls
The definition of “export” in the EAR includes the concept of releasing technical data or technology to a foreign person in the U.S. as part of the definition of a “deemed export”, or the transfer of ownership or control of a technology to a foreign person. Interesting changes are proposed — EAR §734.18 and 734.20 — which would deal with transfers of technology and use of encryption. What’s behind these rules, what are the limitations, and how is industry is managing these exceptions?
Michelle Aragon
Senior Manager
Trade Compliance
Leonardo DRS
Bryce Bittner
Managing Counsel, International Trade
McKinsey & Company
Jeffrey Richardson
Principal
Miller Canfield
• Identifying the tools to best identify multilateral compliance risks
• Managing the intersection of U.S., UK and EU regulatory frameworks-and adjusting your compliance protocols accordingly
• Determining the appropriate classification under each jurisdiction’s control list: EAR’s Commerce Control List (CCL), the USML for ITAR items, and the EU Dual-Use List
• Identifying licensing requirements for each jurisdiction based on the item, destination, end-user, and end-use
• Verifying and screening the end-use to ensure it does not involve prohibited activities or destinations, such as WMD proliferation or military end-uses in restricted countries
Eric J. Larsen
Trade Compliance Manager
Boeing
Jeff Sammon
Senior Director, Global Trade Services Program
Management Office
TE Connectivity
4:30
CYBERSECURITY
FOCUS: EAR CATEGORY 5, PART 2
Navigating the Finer Points of Category 5, Part Two, the Final Cyber Rule
The “cyber rule” and debated export controls on intrusion software have balanced U.S. foreign policy and national security concerns with the need for maintaining a regulatory framework that allows for legitimate cybersecurity transactions. How should industry be applying this complex rule? What questions should be asked and what steps should be taken to ensure compliance?
5:15
Close of Conference
Heather Sroka Senior Trade Counsel Intel
Katelyn M. Hilferty Senior Associate Morgan Lewis& Bockius LLP
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