Hong Kong-Macau - U.S. Export Controls Hong Kong-Macau - U.S. Export Control
The United States imposes export controls to protect national security interests and promote foreign policy objectives. The United States also participates in various multilateral export control regimes to prevent the proliferation of weapons of mass destruction and prevent destabilizing accumulations of conventional weapons and related material. The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) administers U.S. laws, regulations and policies governing the export and reexport of commodities, software, and technology (collectively “items”) falling under the jurisdiction of the Export Administration Regulations (EAR). The primary goal of BIS is to advance national security, foreign policy, and economic objectives by ensuring an effective export control and treaty compliance system and promoting continued U.S. strategic technology leadership. BIS also enforces anti-boycott laws and coordinates with U.S. agencies and other countries on export control, nonproliferation and strategic trade issues.
BIS is responsible for implementing and enforcing the EAR, which regulate the export and reexport of items with chiefly commercial uses that can also be used in conventional arms, weapons of mass destruction, terrorist activities, or human rights abuses; and less sensitive military items; including “production” and “development” technology.
BIS’s Export Administration reviews license applications for exports, reexports and deemed exports (technology transfers to foreign nationals in the United States) subject to the EAR. Through its Office of Exporter Services, Export Administration also provides information on BIS programs, conducts seminars on complying with the EAR, provides guidance on licensing requirements and procedures, and presents an annual Update Conference on Export Controls and Policy as an outreach program to industry. EA’s Office of Technology Evaluation analyzes U.S. export data on items subject to the EAR, BIS license application data, and global trade information to assess data trends. OTE’s data portal provides excerpts from statistical reports, along with data sets to enable the public to perform analyses of exports and licensing on its own (https://www.bis.doc.gov/data-portal).
U.S. exporters should consult the EAR for information on how export license requirements may apply to the sale of their goods. If necessary, a commodity classification request may be submitted in order to obtain BIS assistance in determining how an item is controlled (i.e., the item’s classification) and the applicable licensing policy. Exporters may also request a written advisory opinion from BIS about application of the EAR to a specific situation. Information on commodity classifications, advisory opinions, and export licenses can be obtained through the BIS website at www.bis.doc.gov or by contacting the Office of Exporter Services at the following numbers:
Washington, D.C. Tel: (202) 482-4811 Fax: (202) 482-3322
Western Regional Office Tel: (949) 660-0144 Fax: (949) 660-9347
Further information on export controls is available at: http://www.bis.doc.gov/licensing/exportingbasics.htm
BIS has developed a list of "red flags," or warning signs, intended to discover possible violations of the EAR.
Also, BIS has "Know Your Customer" guidance.
BIS provides a variety of training sessions to U.S. exporters throughout the year. These sessions range from one to two day seminars and focus on the basics of exporting as well as more advanced topics.
The EAR does not control all goods, services, and technologies. Other U.S. Government agencies regulate more specialized exports. For example, the U.S. Department of State’s Directorate of Defense Trade Controls has authority over defense articles and services. A list of other agencies involved in export control can be found on the BIS Web site (https://www.bis.doc.gov/index.php/about-bis/resource-links) or in Supplement No. 3 to Part 730 of the EAR, which is available on the Government Printing Office Web site at: http://www.access.gpo.gov/bis/ear/ear_data.html.
A list that consolidates eleven export screening lists of the Departments of Commerce, State and the Treasury into a single search as an aid to industry in conducting electronic screens of potential parties to regulated transactions is available here: http://developer.trade.gov/consolidated-screening-list.html
http://apps.export.gov/csl-search#/csl-search
https://www.export.gov/article?id=Consolidated-Screening-List
Hong Kong
Hong Kong maintains an autonomous and transparent export control regime. The United States continues to provide Hong Kong importers a comparable level of access to controlled dual-use U.S. technologies as before Hong Kong’s 1997 reversion to China. In some cases, items that do not require a license for export to Hong Kong may require a license to mainland China. U.S. companies should understand whether Hong Kong recipients of U.S. exports are end-users or merely intermediaries, as U.S. export control requirements are generally based on the final destination of the export. For a variety of reasons, it is also common for offshore companies to represent themselves as a Hong Kong company, even when they are located elsewhere. There may be a valid business reason for this, but exporters of controlled items to Hong Kong should take care to know where their customer is actually located.The Hong Kong Government imposes license requirements on the import and export of items found on control lists issued by the major multilateral export control regimes (Wassenaar Arrangement, Missile Technology Control Regime, Nuclear Suppliers’ Group, Australia Group). These items are incorporated into Hong Kong’s Strategic Commodities List, which follows the “EU-style” numbering system adopted in Europe, the United States, and many other countries such as Singapore and Malaysia. Unlike the U.S. system, Hong Kong requires import and export licenses for all items on its control list, no matter where the items are coming from or going to. Because of this, in some cases Hong Kong may require licenses for imports (or exports) of U.S. items that did not require a U.S. license when departing the United States. Items being transshipped through Hong Kong are treated by Hong Kong as imports into Hong Kong, followed by exports, so local license requirements still apply.
Hong Kong importers may require evidence of compliance with U.S. export control laws in order to obtain the necessary Hong Kong import or export licenses. When accepting orders from Hong Kong customers, it is a good idea to make sure your client knows the U.S. Export Control Classification Number of all control list items in the order, so that they can apply for necessary Hong Kong licenses. Carriers in Hong Kong are required to obtain a copy of the local import license before releasing shipments of strategic trade items to the local consignee. Failure to have that license in place before shipment may lead to costly delays or even the seizure of the shipment and imposition of a fine by Hong Kong’s Customs and Excise Department.
In addition to the local import and export requirements, on January 19, 2017, an update was entered in 15 CFR Parts 740, 748 and 762 by the U.S. Department of Commerce, Bureau of Industry and Security. BIS issued a Final Rule regarding support document requirements with respect to Hong Kong. The Final Rule became effective on April 19, 2017. This rule requires persons intending to export or reexport to Hong Kong any item subject to the Export Administration Regulations (EAR) and on the Commerce Control List (CCL) for national security (NS), missile technology(MT), nuclear nonproliferation (NP column 1), or chemical and biological weapons (CB) reasons to obtain, prior to the shipment of such items, a copy of a Hong Kong import license or a written statement from the Hong Kong government that such a license is not required, including website guidance from the Hong Kong Trade and Industry Department (HKTID). This rule also applies to individuals intending to reexport from Hong Kong items controlled for the previous stated reasons, to obtain a Hong Kong export license or statement from the Hong Kong government that such a license is not required, including website guidance from HKTID, prior to shipment. The items for which Hong Kong requires a license and the previous stated items controlled under the EAR are based on the same multilateral regime control lists. This rule does not impose any new licensing requirements. BIS is taking this action to foster compliance with the Hong Kong Import and Export (Strategic Commodities) Regulations and thus enhance the effectiveness of the EAR.
In Hong Kong, the use of corporate secretary companies and/or forwarding agents is a significant issue in relation to diversion risks when exporting to Hong Kong. These companies can operate and perform services for business clients with little or no oversight from Hong Kong authorities. To ensure compliance with U.S. export control laws, companies should exercise due diligence research on any shipments to clients in Hong Kong and thoroughly validate all information to determine with reasonable certainty if the items will remain in Hong Kong or be reexported to other countries that may change the U.S. export control status of the items.
Hong Kong has also adopted a “catch-all” export license requirement that covers exports and re-exports of non-listed items to entities and institutions involved in promoting the production of weapons of mass destruction. A caution to U.S. exporters: The United States imposes unilateral export controls that are broader than those maintained by Hong Kong and will penalize companies involved in exports to Hong Kong that are destined for countries or entities restricted under U.S. law.
Macau
Macau is treated differently than Hong Kong by the Bureau of Industry and Security for export control purposes. In the case of Macau, exports or re-exports to Macau are generally treated as exports or re-exports to mainland China.
Web Resources
Bureau of Industry and Security
For more information on U.S. export control regulations, please visit: http://www.bis.doc.gov
A list that consolidates eleven export screening lists of the Departments of Commerce, State and the Treasury into a single search as an aid to industry in conducting electronic screens of potential parties to regulated transactions.
Trade and Industry Department, HKSAR
Information on Hong Kong Strategic Commodities Controls and license applications
Customs and Excise Department, HKSAR
Information about the enforcement of Hong Kong Strategic Commodities Controls.