Options dwindle for Manzullo export control bill

Supporters of a House bill to improve enforcement of export controls and related data collection are holding out hope for a successful vote in the waning hours or days of the current session.

But the prospects for action are rapidly dwindling as lawmakers are preoccupied with the massive rescue plan for the financial system and heading home to campaign for the November election.

The best option to fast-track the bill would require concurrence from Rep. Howard Berman, chairman of the Foreign Affairs Committee, and other key members to skip an official committee review and take it straight to the House floor for vote under a special process that would allow normal voting procedures to be waived, according to Lauren Airey, legislative aide to chief sponsor Rep. Donald Manzullo, R-Ill.

Congress was expected to adjourn today, but work on the Wall Street bailout package is likely to keep members of Congress in town through the weekend and possibly into next week.

Introduced earlier this year, the Securing Exports Through Coordination and Technology Act, commonly referred to as the Manzullo bill, is designed to crack down on exporters and forwarders who try to evade export controls and make technical improvements to the government's Automated Export System to prevent forwarders from inadvertently making illegal exports to restricted parties or embargoed countries. It includes strengthened criminal and administrative prosecution of exporters who attempt to circumvent the electronic export controls.

Speaking Monday at the National Customs Brokers and Forwarders Association of America mid-year conference, Airey said the next alternative for passage is a likely post-election lame duck session to complete unfinished business. Manzullo plans to reintroduce the bill in the 111th Congress and coordinate with the Senate to get a companion bill proposed in order to win faster passage, she said. Pieces of the bill dealing with diversion of sensitive exports to restricted parties are similar to language in an Iran sanctions bill in the Senate, but there is no Senate legislation also dealing with the Census Bureau's automated system for filing exports.

Passage now is important because it would establish a marker for House lawmakers so that the bill could be expedited through committee and not have to go back to the drawing board to build support in the next session.

The Manzullo bill has several differences from the original version and is still undergoing changes.

The section dealing with the AES system as an export control tool has been watered down at the request of the Bureau of Industry and Security. The legislation originally was specific about what types of misinformation entered into the AES system would prompt a fatal error suspending licenses and blocking access to the system. But industry and the agency were concerned that too many false positives would effectively shut down the system and require agency personnel to resolve issues. BIS wanted a more flexible system that gives it the option to decide what types of exports receive warnings or alerts. The bill now requires the Commerce Department to ensure changes to export laws and regulations are reflected in AES upon implementation; that products to be exported can be classified; and that all lists of restricted parties are available in a standardized format and are sufficiently updated so that exporters can rely on them to screen their transactions.

The bill also authorizes the Commerce Department to establish a licensing program for exporters or their intermediaries to use AES. The freight forwarding industry supports the licensing requirement, but U.S. Customs and Border Protection has said the measure is unnecessary and would divert agency enforcement resources.

Manzullo plans to drop the section of H.R. 6828 calling for an audit of the Validated End-User (VEU) program and a six-month moratorium on its expansion, Airey said in follow-up comments. The Commerce Department implemented VEU in 2007 as a way to eliminate the requirement for individual licenses for routine exports by allowing trusted companies in China and India who meet rigorous security requirements to receive blanket permission to trade in 31 types of goods that also have military applications. But Commerce is already having trouble with the Chinese government providing end-use verifications. Airey said the language will be pulled because the department is addressing the congressman's concerns that the program not be expanded until it is reviewed and initial problems are corrected.

Airey also said the section involving transshipment, or diversion, of exports from one country to an embargoed country will also be rewritten to more closely align with the Senate's Iran sanctions bill. 

Source: American Shipper