Regulatory intelligence for US exporters

BIS Military Exports Rule Will Lead to 'Uncertainty' for US Universities, AUECO Says

U.S. universities may be forced to turn down research activities -- including COVID-19 research -- due to the Bureau of Industry and Security's increased restrictions on shipments to military end-users (see 2004270027), the Association of University Export Control Officers said in comments to the agency. The restrictions are so broad that they could severely restrict academic activities that benefit the U.S. despite those activities having “no military or defense application,” the AUECO said.

“Without additional guidance … U.S. universities will have difficulty developing appropriate procedures to comply with the final rule,” the association said in a June 16 letter. The group urged BIS to clarify the scope of the rule and to delay the effective date by 60 days. BIS did not comment.

At least 20 industry groups raised similar concerns, saying the rule’s definition for military end-uses and end-users is too broad and is creating confusion about how companies can be expected to determine whether their customers will be caught by the rule (see 2006150031). The AUECO suggested the rule is also creating confusion among universities and raises “significant compliance concerns.” The rule’s definitions “are so broad as to have potentially significant chilling effects on U.S. academic collaborations and projects,” the group said.

“U.S. universities may inadvertently interpret the final rule in ways inconsistent with BIS’s intentions and that have unintended consequences,” the AUECO said. This could lead to universities refusing “to engage in collaborations that are of benefit to the United States,” including coronavirus research, “due to uncertainty as to what constitutes sufficient ‘Know Your Customer’ due diligence under this rule.”

The group also asked for clarification regarding the scope of military end-uses and end-users for expanded Electronic Export Information filing requirements introduced by the rule. The group said it is unsure whether certain exemptions apply to the new filing requirements, including for “personally-owned baggage,” such as certain hand-carried laptops “not shipped on a commercial invoice.”