Export Controls Reform “THE CHANGES, THEY ARE ACOMING”

1. Export Controls Reform“THE CHANGES, THEY ARE ACOMING”

2. Export control reform initiatives proposedby the Obama administration include: Single control list Single licensing agency Single IT system to process apps/licenses Single primary enforcement agency Current export control system: 2 distinct control lists 3 separate licensing agencies 3 separate sets of regulations 3 separate IT systems National Export Initiative (NEI) Key principles of reform Team International Trade services

3. How it might be accomplished: Establish a single licensing agency Establish 3 tiers within the CCL & USML Licensing policies for each tier Screening process within the lists to create a clear jurisdictional line Raise the USML to a more “positive” list Combine OEE into ICE for single enforcement Integrate IT systems of current control agencies (probably based on D-Trade)[very long term] National Export Initiative (NEI) Team International Trade services

4. U.S. Department of Commerce (BIS) - EAR U.S. State Department (DDTC) – ITAR U.S. Department of Commerce - Census U.S. Treasury Department - OFAC U.S. Department of Energy U.S. Nuclear Regulatory Commission U.S. Department of the Interior - Fish and Wildlife U.S. Maritime Commission Others Current Control Agencies Team International Trade services

5. BIS – SNAP-R DDTC – D-TRADE Census - AES Others Current Electronic Application Systems Team International Trade services

6. BIS DDTC USCBP - ICE OFAC Other Current Enforcement Agencies Team International Trade services

7. March 11, 2010 - Executive Order 13534 - National Export Initiative “FAST FORWARD” May 2012 – Proposed changes published in the Federal register August 14, 2012 - Public Comments on the Proposed “Specially Designed Rules” Are Now Available Online August 15, 2012 - Public Comments on the BIS and DDTC Proposed Transition Rules Are Now Available Online Current Status of the Initiative Team International Trade services

8. What will actually move from the ITAR to the EAR Those that move over under what ECCN will they fall BIS licenses are good for 24 months, DDTC are good for 48 months, how will this affect license holders License tolerances are different, IE: 25% - value under the EAR, 10% - Value under ITAR, etc. How will the equivalent of TAA’s, MLA’s and WDA’s be handled under the EAR Will existing DDTC licenses be valid until expired or exhausted or depending on the new ECCN will a BIS license be immediately required The “Devil” is in the Details Team International Trade services

9. Who will be the ultimate decision maker be in regard to jurisdiction Will any existing ECCN’s change Will the BIS begin to charge for licenses or use of SNAP-R Other unanswered questions The “Devil” is in the Details (Cont.) Team International Trade services

10. Monitor the changes closely through the various agency websites and the Federal Register If you are not registered for SNAP-R do so quickly. Request for classification through SNAP-R or via a Commodity Jurisdiction request may be helpful Begin to update or create you Export Compliance Program (EMS) Schedule in-house or attend public training programs as new rules are finalized Work closely with supplier to see how their products may be affected What Should You Do to Prepare Team International Trade services

11. Administrative Elements Management Policy Responsible Officials Recordkeeping Training Internal Reviews Notification Order Processing Procedures Product Classification and Licensing Determination Screening Elements EXPORT MANAGEMENT SYSTEM Team International Trade services 11

12. Where does Export Compliance Report? Export Management Benchmark Study; published by American Shipper, October 2010 Team International Trade services

13. Are there any remaining questions? Team Worldwide 720 South Front Street Building B Elizabeth, NJ 07202 e-mail; bob.imbriani@teamww.com Cell phone: 516-448-244 • We look forward to seeing you again! Team International Trade services 13