Understanding The U.S. Bureau of Industry & Security (BIS)

Dear Import/Export Compliance Manager,

What’s the deal with the U.S. Bureau of Industry and Security?  On the one hand, we’re supposed to be scared of them, what with the tales of BIS agents with guns making unannounced visits and all of the scare stories in Don’t Let This Happen To You!  On the other hand, I met some BIS contacts at BIS Update and they seem really nice.  I’m confused.  Can you help me make sense of it all?

Perplexed in Peoria

Dear Perplexed,

You are correct in your observation that BIS has multiple personalities.  The Import/Export Compliance Manager has noted three distinct ones which, for the purposes of this blog post, we will refer to as Regulator, Helper and Enforcer.  Each personality serves to accomplish a distinct goal: issuing regulations that make sense, helping exporters comply with those regulations and enforcing those regulations.  Each serves the ultimate goal: having all exporters comply fully with the U.S. Export Administration Regulations (EAR).

Let’s talk about Regulator first.  As you may be aware, Congress passes the laws but it is still up to the federal agencies, such as BIS, to determine how they will be enacted and enforced.  The Export Administration Act of 1979 is very, very detailed (read it here: https://www.govtrack.us/congress/bills/96/s737/text); however, it includes many references to “The Secretary [of Commerce] shall establish appropriate procedures for...”  It was up to BIS’ predecessor, the Office of Export Administration, to draft specific regulations. 

BIS can’t ensure the regulations make sense on their own, however.  The bureaucrats in BIS may have industry experience and exposure or they might not have any.  How does BIS find out, then, what is happening in the real world?  You!  BIS wants you, as someone who is keyed into what is really happening out there, to participate in the rule-making process with them.  The main mechanism for this are the Technical Advisory Committees (TACs), which bring together government officials and industry representatives to discuss proposed changes to the regulations to ensure they indeed do make sense (or, if they won’t make sense, that BIS at least hears industry’s concerns).  There are also the comment periods on proposed regulations (BIS does take the comments into account) and the ability to pick up the phone and call the person who issued your latest export classification (CCATS). 

From your point of view, there are certainly benefits to you by working with BIS.  Through participation in the TACs, you can genuinely affect policy and potentially make sure a change that will negatively affect your industry is either a) not made or that b) you have ample advance warning to prepare.  You will feel less intimidated when you contact BIS officials directly with questions about your export licenses, classifications or other issues.  You will feel even more engaged in the mission to protect the US when you feel like BIS is taking your input seriously.

Thankfully, BIS also has a Helper personality.  Smartly, they also put themselves out there as a partner for ensuring compliance.  In this day and age of shrinking budgets and increasing foreign trade, do you think BIS wants to have to go around putting out tons and tons of fires?  Nope, just like you they know that an ounce of prevention can be worth a pound of cure.  Hence, they put on training programs around the country, have a dedicated department who will review your export compliance manual for you if you like http://www.bis.doc.gov/index.php/component/content/article/24-compliance-a-training/export-management-a-compliance/628-submit-your-export-management-and-compliance-program-emcp, have useful materials and decision tools on their website and, perhaps most impressively, hold the annual conferences in Washington, DC (BIS Update) and on the West Coast of the U.S. each year, thus allowing you the opportunity to meet the people making decisions regarding the export success of your company in person.  For example, if you apply for export licenses, you can use BIS Update to meet your Licensing Officers in person.  Perhaps you did this when you attended Update; if so, well done! 

Then there’s the Enforcer: BIS's Office of Export Enforcement (OEE).  Let’s face it, enforcement is required to ensure full compliance.  Even though OEE is scary on the surface, they are actually very interested in being a part of the community.  Why is this?  The fact is that almost all of their investigations begin because of tips from people like you.  The tips can be about suspicious customers or your competitors who you think may be getting an unfair advantage.  Thus, OEE officers can jump at the opportunity to conduct outreach to export compliance people like you; the goal is not to scare you but rather to have you know they are there and how to contact them with tips or questions.  Just like local policing works best when the officers know the locals on their beat, OEE works better when they know the export compliance community. 

One other point: don’t be intimidated by BIS if you work for a small company.  Just like your small company can get in just as much trouble as a large multinational company, you have just as much input to provide as the large multinational companies, particularly if your company is on the leading edge of technology or a new market.  You’ll be amazed at how much attention (the positive kind!) they might pay to you. 

So, if it fits your situation and your acceptable level of risk, take BIS up on its offer to engage in a working relationship.  Just like you should like knowing the faces and personalities behind the names on your export licenses and CCATS, they like knowing about you and getting a good feeling that they are helping you work better in your export compliance role.  Take advantage of it where you will, particularly since many federal government agencies are not as proactive in their outreach as BIS.