On August 30, 2023, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) introduced a significant amendment to the Export Administration Regulations (“EAR”). The bureau adjusted the protocols for the renewal of Temporary Denial Orders (“TDOs”) under specific circumstances. TDOs, typically directed at entities or individuals named in them, come with severe and wide-ranging civil penalties. Their primary objective is to ostracize the sanctioned actor from accessing items that fall under the EAR. As noted by Kelley Drye & Warren LLP
Under the new rule, BIS now has the authorization to renew TDOs for a full year at a time. Previously, these temporary orders could only be extended up to 180 days. This updated procedure offers an extended deterrent and control mechanism for the governing body over entities or individuals who have demonstrated consistent or serious violations of the EAR.
This development is significant for legal professionals dealing with export controls and sanctions. It emphasizes the need for companies to ensure strict compliance with the EAR to avoid the risk of TDOs and the associated considerable civil penalties. Effectively navigating these challenges necessitates a robust understanding of the EAR and the potential implications of these new extended TDOs.
The full impact of these modifications requires time to fully comprehend. However, it’s clear that they reinforce the committing to following regulatory laws and maintain the integrity of the EAR, highlighting the ongoing seriousness in which the US government views breaches of export control regulations.