bureau of industry and security Archives | Customs & International Trade Law Blog

BIS Initiates 232 Investigations of Pharmaceuticals and Semiconductors

The U.S. Department of Commerce Bureau of Industry and Security (BIS) announced the initiation of investigations into the effects on U.S. national security of imports of pharmaceuticals and pharmaceutical ingredients and imports of semiconductors and semiconductor manufacturing equipment.

The basis of the investigations is Section 232 of the Trade Expansion Act of 1962. Under Section 232, the president can restrict imports of products that are found to threaten to impair national security.

On April 16, BIS published two federal register notices (pharmaceuticals, semiconductors) seeking public comment. Comments are due May 7, 2025.

Pharmaceuticals and Pharmaceutical Ingredients

The scope of the pharmaceutical investigation covers pharmaceuticals and pharmaceutical ingredients, including:

Finished drug products
Medical countermeasures
Critical inputs such as active pharmaceutical ingredients
Key starting materials, and derivative products of those items

Among other information, BIS is particularly interested in comments that address:

Demand for pharmaceuticals and pharmaceutical ingredients in the United States
The extent to which domestic production of pharmaceuticals and pharmaceutical ingredients can meet domestic demand
The role of foreign supply chains, particularly of major exporters, in meeting United States demand for pharmaceuticals and pharmaceutical ingredients
The impact of foreign government subsidies and predatory trade practices on United States pharmaceuticals industry competitiveness
Whether additional measures, including tariffs or quotas, are necessary to protect national security

Interested parties may submit a comment in this proceeding on or before May 7, 2025 at Regulations.gov using ID BIS-2025-0022.

Semiconductors and Semiconductor Manufacturing Equipment

The scope of the semiconductor investigation covers semiconductors, semiconductor manufacturing equipment, and their derivative products, […]

By Jennifer Diaz|2025-04-17T16:37:36-04:00April 17, 2025|Tariffs, U.S. Department of Commerce (DOC)|Comments Off

BIS Releases New Edition of “Don’t Let This Happen to You”

The Department of Commerce’s Bureau of Industry and Security (BIS) published an updated version of Don’t Let This Happen to You!, a list of case examples highlighting BIS enforcement efforts including criminal cases.

Case highlights:

The publication highlights over 100 cases covering various violations of export control laws.

Military Controls

The owner of BQ Tree Consulting in Jacksonville, Florida, along with the President and Manager of the company were indicted for conspiring to illegally export military-grade combat rubber raiding craft (CCRC) to China.

The scheme involved providing a U.S. company with false end-use and end-user information for a front company in Hong Kong, which was used to complete the transaction ultimately destined for China. The intention was to reverse engineer the CRRC and engines to mass produce them for the Chinese People’s Liberation Army (PLA) Navy.

The company owner was sentenced to 16 months in prison, two years of supervised release, mandatory mental health screening, and a $200 special assessment. The company President was sentenced to 42 months confinement, three years of probation, a $50,000 criminal fine, and a $200 special assessment. The company manager was sentenced to 17 months in prison, one year of supervised release pending deportation, a prohibition on employment with any company that deals with the military, and a $100 special assessment.

National Security Controls

GlobalFoundries U.S. Inc., a semiconductor wafer manufacturing company headquartered in Malta New York violated the Export Administration Regulations (EAR) by sending 74 shipments of semiconductor wafers, valued at approximately $17.1 million, to SJ Semiconductor (SJS), a company […]

By Jennifer Diaz|2024-11-22T07:18:29-05:00November 22, 2024|EAR, Export, U.S. Bureau of Industry and Security (BIS), U.S. Department of Commerce (DOC)|Comments Off

BIS Issues Final Rule on VSD Policies and Penalty Guidelines

BIS recently issued a final rule to amend the Export Administration Regulations (EAR), making several changes to their Voluntary Self Disclosure (VSD) policies, as well as updates to guidance on penalty determinations.

The rule codifies previously announced policy changes through several Policy Memoranda including an April 2023 memorandum on voluntary-self disclosures, and a June 2022 memorandum on strengthening administrative enforcement.

Revisions to Voluntary Self-Disclosures

The rule makes both substantive and procedural changes to the VSD policies:

Addition of non-disclosure as an aggravating factor – the new rule makes clear that BIS will consider a deliberate decision to not disclose a violation as an aggravated factor when determining what administrative sanctions will be imposed.
New dual track for processing VSDs – one track for minor or technical violations, the other for significant violations.
Authorizes any person (not just the party submitting a VSD) to notify the Director of BIS’s Office of Export Enforcement (OEE) that a violation has occurred and to request permission to engage in corrective activities.

Revisions to Penalty Guidelines

This rule makes several changes to the BIS Penalty Guidelines, including:

Changes the base penalty caps:
1. Non-egregious VSD cases: was $125,000, now one-half of the transaction value.
2. Non-egregious cases that are not initiated by a VSD: was $250,000, now the full transaction value.
Permits BIS to use non-monetary penalties to resolve cases that are not egregious and have not resulted in national security harm, but rise above the level of cases warranting a warning letter.
Removes from the BIS […]

By Jennifer Diaz|2024-09-26T15:59:58-04:00September 26, 2024|EAR, Export, U.S. Bureau of Industry and Security (BIS)|Comments Off

BIS Issues New Guidelines for Preparing Export License Applications Involving Foreign Persons (Deemed Exports/Reexports)

The Bureau of Industry and Security (BIS) issued new guidelines to assist deemed export applicants in obtaining licenses. The guidelines primarily apply to employment situations; however, they also address other situations such as the release of controlled technology to foreign students participating in research.

The guidelines cover basic requirements for applying and renewal and include an application checklist.

Background on Licenses for Deemed Exports/Reexports

The obligation to obtain an export license from BIS before releasing controlled technology to a foreign person is informally referred to as a “deemed” export. The release is considered an export to the person’s country or countries of nationality.

The Export Administration Regulations (EAR), Section 734.13, defines a deemed export as releasing or otherwise transferring “technology” or “source code” to a foreign person in the United States.

Typical organizations using deemed export licenses include universities, research institutions, bio-chemical firms, medical organizations, and computer companies.

New Guidance

The basic guidance for filling out license applications is set forth in Supplement 1 to part 748 of the EAR. The new guidelines supplement the basic guidance and are intended to assist licensing officers in reviewing license applications more efficiently.

Basic Requirements

The guidelines reiterate that applicants must include all the necessary information and documentation required when submitting a license application. BIS will return applications with insufficient information.

Basic documentation required:

By Jennifer Diaz|2024-09-13T11:58:26-04:00September 13, 2024|Export, U.S. Bureau of Industry and Security (BIS)|Comments Off

ICYMI: BIS Updates Boycott Requester List

The Department of Commerce’s Bureau of Industry and Security (BIS) published its first quarterly update of the Boycott Requester List. The list notifies companies, freight forwarders, financial entities, and individuals of potential sources of boycott-related requests that they may receive.

Background on Boycott Requests

BIS is charged with enforcing anti-boycott laws under the Export Administration Regulations (EAR). The laws prohibit U.S. companies from taking actions in furtherance of a boycott maintained by a foreign country against a country friendly to the United States. Common boycott requests include:

Requesting a certification that goods are not from a specific country
Requesting that goods are not shipped to a certain country
Requesting that a business does not engage with a particular country

U.S. persons must report boycott-related requests to BIS’s Office of Anti-boycott Compliance (OAC).

Boycott Requester List

OAC maintains a boycott-requester list to raise awareness and assist U.S. persons in identifying sources of boycott-related requests.

Entities on the list have been reported by a U.S. person to BIS via a request report form. The list is updated quarterly but is not an exhaustive list of entities that may make these requests.

The most recent update to the list includes 57 additions and the removal of 127 entities.

Requesting countries added in the most recent update include:

Afghanistan
Algeria
Bangladesh
Germany
India
Iraq
Japan
Kuwait
Malaysia
Norway
Oman
Pakistan
Saudi Arabia
Singapore
Switzerland
United Arab Emirates
Qatar
Vietnam

Exporters have a duty to remain vigilant in spotting boycott-related requests and reporting them to BIS. Diaz Trade Law can help […]

By Jennifer Diaz|2024-07-02T08:57:03-04:00July 2, 2024|EAR, Export, U.S. Bureau of Industry and Security (BIS)|Comments Off

Submitting Voluntary Self-Disclosures to Bureau of Industry & Security

Diaz Trade Law is enthusiastic to announce Bloomberg Law published an update to our previous article, “Submitting Voluntary Self-Disclosures to Bureau of Industry & Security.” The udpate discusses new guidance from BIS regarding failure to voluntary disclose significant violations. Below is the article reproduced with permission for your reading pleasure. You can read the article here (where you’ll have the ability to access all of the great hyperlinks). Please note you cannot click on the hyperlinks below.

We’d love to hear your feedback!

By Jennifer Diaz|2023-05-11T12:56:55-04:00May 11, 2023|Bloomberg Export|Comments Off

Significant Updates to BIS Enforcement Policies in 2022

Diaz Trade Law’s President, Jennifer Diaz, Associate Attorney Sharath Patil, are enthusiastic to announce Bloomberg Law published another one of our articles, “Significant Updates to BIS Enforcement Policies in 2022“! Below is the article reproduced with permission for your reading pleasure. You can read the article here (where you’ll have the ability to access all of the great hyperlinks). Please note you cannot click on the hyperlinks below.

We’d love to hear your feedback!

[…]

By Jennifer Diaz|2022-11-08T14:42:31-05:00November 8, 2022|Bloomberg, Bloomberg Export, China, Cuba, EAR, Export, International Trade, IRAN, People's Republic of China, Russia, Russian Harmful Foreign Activities Sanctions Regulations, U.S. Bureau of Industry and Security (BIS)|Comments Off

BIS Publishes Report on Effect of Uranium Imports on National Security

Background on Section 232 Investigations – Section 232 investigations, administered by the U.S. Commerce Department, are conducted to determine the effect of imports of certain goods on national security Historically, Section 232 investigations have been conducted regarding U.S. imports of crude oil and petroleum products and uranium, among other critical imports.

Investigations may be initiated based on an application from an interested party, a request from the head of any department or agency, or may be self-initiated by the Secretary of Commerce. The Secretary’s report to the President, prepared within 270 days of initiation, focuses on whether the importation of the article in question is in such quantities, or under such circumstances, that threaten to impair the national security. The President can concur or not with the Secretary’s recommendations, and take action to “adjust the imports of an article and its derivatives” or other non-trade related actions as deemed necessary.

To learn more about Section 232 investigations including background on relevant laws and regulations and the history of past cases, check out the Section 232 Program Guide.

[…]

By Jennifer Diaz|2021-10-26T12:24:39-04:00November 2, 2021|Import, Investigation, U.S. Bureau of Industry and Security (BIS), U.S. Department of Commerce (DOC)|1 Comment

$432k Penalty From BIS Stresses Importance of Export Compliance

Building and maintaining a strong export compliance program is essential if you don’t want your company to become a headline. The Bureau of Industry and Security (BIS) announced an administrative settlement with a penalty amount of $432,570, for Alfa Laval US of Richmond, VA and Alfa Laval Middle East Ltd. of the United Emirates for alleged violations of the Export Administration Regulations.

Do you know if your company is meeting export regulations and obligations? Obtaining counsel who is an expert in export compliance is the first step. Are your employees/staff trained in all exporting issues? Our one-hour webinar is a must attend to help provide you with a foundation of tools and key elements that must be included in your export compliance program. Register today to hear from the following experts:

[…]

By Jennifer Diaz|2021-09-13T15:54:12-04:00September 14, 2021|EAR, Export, International Law, U.S. Bureau of Industry and Security (BIS), U.S. Office of Foreign Assets Control (OFAC)|1 Comment

Understanding the GOV Export License Exception

Background on Export Administration Regulations

Over 95% of the world’s consumers are outside of the United States. Opportunities abound for U.S. companies that export. However, exporting is a privilege and not a right. U.S. exporters have an important responsibility to adhere to U.S. export control laws, including the Export Administration Regulations (“EAR”).

Administered by the U.S. Commerce Department, the EAR is a set of regulations which governs whether U.S. persons may export or transfer goods, software, and technology outside of the United States or to non-U.S. citizens. U.S. exporters have an important responsibility to adhere to the EAR. Violations of the EAR carry hefty civil and criminal penalties. Exporters can pay hundreds of thousands of dollars in penalties, lose export privileges, and even be imprisoned.

[…]