BIS Bombarded With Questions, Export Licensing Backlog Amid Policy Review

BIS, which began pausing many license reviews around Feb. 5 (see 2502130068), had an unusually high backlog of applications last week, according to an industry official familiar with the situation. The person, who requested anonymity to speak openly, said licensing officers have been “quite frustrated” about the hold.

“I've never seen them stop like this,” said the official, who has been working on export control issues for more than two decades. “BIS needs to start speaking about what's going on, because they can't just do something like this and leave industry hanging.”

Some industry groups have been told the pause could soon be lifted. The Semiconductor Industry Association is “expecting processing to return gradually to normal” now that Commerce Secretary Howard Lutnick is in place and as BIS fills out the rest of its senior staff, according to an internal message SIA sent to its Export Control Committee after Lutnick was confirmed by the Senate Feb. 18.

The SIA message, seen by Export Compliance Daily, said the association has been receiving a “number of inquiries” about licensing delays but also said “our sources tell us that BIS has not instituted a formal hold.” SIA said it has been told that James Rockas, acting BIS undersecretary, “has asked to review licenses and licensing processes to ensure policy alignment,” and that has led to licensing delays.

“Given these delays, BIS licensing officers, who are cognizant of statutory processing timelines, have put certain licenses in a ‘hold’ status while the operating rhythm normalizes,” SIA said. Licensing processing could return to normal as BIS “staffs up the Office of the Under Secretary.”

Yet BIS employees have told companies and law firms this month that they aren't sure when the pause will end -- only that it's due to an ongoing review of policy, nine export control lawyers and advisers said in interviews. Buchanan Ingersoll said it was told certain "urgent" license applications may be able to "push through the pause" and be adjudicated.

Doug Jacobson, a trade lawyer who works on export control issues, said the head of the BIS Munitions Control Division “confirmed” to one of his clients that a freeze was in place. Jacobson said he has multiple clients whose licenses are being held and that the pause appears to be part of the Trump administration’s ongoing review of U.S. export control policies.

Kate Rayer, vice president of regulatory services for Green Worldwide Shipping, said she recently spoke to a BIS export counselor who “verbally confirmed” that there was a pause. She said she has some clients who are waiting on licenses, although “whether or not that’s directly because of this -- I don't know that.”

Reached this week, a BIS export counselor declined to comment and directed questions to the agency’s press office. The press office hasn’t responded to multiple requests for comment.

“Nobody will confirm or deny anything,” Jacobson said of BIS, “or certainly put anything in writing.”

Jacobson said he doesn’t recall BIS ever putting in place a broad freeze of new license applications. He noted the pause has so far lasted just two weeks -- which isn’t “the end of the world” -- but “it can ultimately lead to problems the longer this policy is in effect.”

Kevin Wolf, an export control lawyer and former senior BIS official, said he hadn’t yet asked the agency about the issue and was “unaware” of BIS ever previously putting in place a sweeping licensing freeze. U.S. exporters facing lengthy license review pauses could lose out on sales, he said.

“Most things that U.S. companies sell have foreign availability, and companies don't care often whether it's a U.S. or a foreign product. They just want their widget,” Wolf said. “And if they can't get the U.S. version at the price, they'll spend more money to buy the foreign version.”

Wolf also said any licensing holds could “go back to normal” after Commerce Secretary Lutnick gets started and other BIS positions are filled.

Washington trade lawyer Jeffrey Kessler was nominated to lead BIS (see 2502040059) and former congressional staffer Landon Heid was tapped to lead the agency’s export administration efforts (see 2502120020). Their nomination hearings haven’t yet been scheduled.

Until then, multiple trade compliance professionals said they will continue seeking clarity from BIS.

Jeff Bialos, a Washington lawyer who advises on international commercial and trade issues, said he’s been getting questions from clients about why BIS could be holding licenses.

“If there's a policy review going on, the question is, what are they thinking of changing?” he said.

The administration hasn’t outlined how it may revise existing export control policies and procedures, but Trump, during his first day in office, ordered the Commerce and State departments to “advise on modifications” to the U.S. export control system “in light of developments involving strategic adversaries or geopolitical rivals as well as all other relevant national security and global considerations” (see 2501210023). Trump also directed both agencies to identify export control “loopholes,” including any that “enable the transfer of strategic goods, software, services, and technology to countries to strategic rivals and their proxies.”

Bialos noted that licensing policy is “inherently discretionary,” but it’s generally based on national security factors. He wondered whether Trump could consider changing export licensing policies to align with the U.S.’s newly announced reciprocal tariff policy, in which the U.S. matches import duties imposed by other countries.

“So, one, are they changing the national security framework for looking at dual-use exports? Two, will trade reciprocity be some type of a factor in these decisions now that wasn't before?” Bialos said. “Those are questions people would like to understand the answer to.”

Jacobson said the licensing holds don’t “surprise” him, partly because of the lack of political leadership currently in place at BIS and because the agency has received criticism from Republican lawmakers in recent years for not doing enough to stop sensitive exports to China (see 2407020040, 2110210073) and 2303060013).

“Whether they're going to impose more controls or ease up a little bit, I think that's what they just have to figure out internally,” Jacobson said, “and I think that's what's driving this licensing policy hold.”

Trade lawyers said licensing delays not only could slow everyday commercial sales, but also critical transfers of dual-use goods needed by NATO allies and other friendly governments. Multiple lawyers and industry officials specifically wondered how the delays could impact shipments of 600 series items, which can include parts used by foreign militaries. Others said they expect trade groups to begin lobbying lawmakers to push BIS to resolve the holds if the licensing process doesn’t return to normal soon.

“There are contracts in place. There are commitments in place that need to be met,” one official said. “There's some real potential damage by BIS not processing licenses.”