On July 18, 2024, the Bureau of Industry and Security (BIS) issued an interim final rule (IFR) to amend the Export Administration Regulations (EAR) to modify the scope and the terms used to describe "standards-related activities" subject to the EAR. The IFR removes the EAR's jurisdiction over the release of certain technology and software when the release occurs for a "standards-related activity" for a "published" standard or with the intent that the resulting standard will be "published."
Background
Since 2019, BIS has revised the EAR in efforts to permit U.S. participation in standards development for critical and emerging technology(ies) in areas that are essential to U.S. national security and competitiveness. For example, on September 9, 2022, BIS published an interim final rule (the September 2022 rule) amending the EAR to authorize the release of certain technology and software in the context of "standards-related activities" involving the entities on the Entity List. More specifically, the September 2022 rule revised standards authorization by: (1) expanding the scope of the authorization to all entities on the Entity List; (2) expanding the scope of the authorization to include certain software and additional technology; and (3) refining the scope of covered standards activities. The gradual expansion of the scope of the rule was in line with BIS' stated goal of removing barriers to U.S. participation in standards-related activities. Such impediments, according to BIS, can result in negative consequences that "contribute[] to a potential future global standards environment that works to oppose U.S. interests."
The New Rule
The prior revisions to the EAR focused on authorizing the
release of software and technology in the context of
"standards-related activity" to those identified on the
Entity List. Based on public comments received after the September
2022 rule, as well as continued discussions with other U.S.
government agencies and industry, BIS further revises the EAR so
that the activities that meet the definition of
"standards-related activities" (as defined in the EAR)
are no longer subject to the EAR's jurisdiction.
In addition, BIS also removes the definitions of the terms
"standards" and "standards organization" from
the EAR to allow for full participation in the intended activities.
Previously, the terms "standards" and "standards
organization" were defined with reference to OMB Circular No.
A-119. However, public comments indicated that such definitions
"do not adequately address the breadth of activities and
issues that companies run into while participating in standards
organizations." By removing the definitions of the terms
"standards" and "standards organization," the
standards-related authority focuses on the activities that fall
within the definition of "standards-related activity"
rather than the type of organization that performs such
activities.
As a result of the IFR, the release of enumerated technology and
software would no longer be subject to the EAR when released for a
"standards-related activity." The standards-related
activity must be either for a "published" standard or
occur with the intent that the resulting standard will be
"published." The term "standards-related
activity" includes the following: (1) the development,
adoption, or application of a standard (i.e., any document or other
writing that provides, for common and repeated use, rules,
guidelines, technical, or other characteristics for products or
related processes and production methods), including but not
limited to conformity assessment procedures and (2) an action taken
for the purpose of developing, promulgating, revising, amending,
issuing or reissuing, interpreting, implementing, or otherwise
maintaining or applying such a standard.
Technology and software covered by the provision on
standards-related activity remain the same as before. The relevant
technology and software are:
- Technology or software designated EAR99
- Technology or software controlled for anti-terrorism reasons only
- For the following ECCN "items" level paragraphs of technology or software specifically for the "development," "production," or "use" of cryptographic functionality once the release is for a "standards-related activity": software that is classified under ECCN 5D002.b or 5D002.c.1 (for equipment specified in ECCN 5A002.a and 5A002.c only); technology that is classified under ECCN 5E002 (for equipment specified in ECCN 5A002.a, .b and .c); and technology for software controlled under ECCN 5D002.b or .c.1 (for equipment specified in ECCN 5A002.a and .c only) when the release is for a "standards-related activity"
Conclusion
The amendments in the IFR are an effort to ensure that export controls and related compliance concerns do not impede U.S. participation and leadership in legitimate standards-related activities. Interested parties may submit their comments on the rule by September 16, 2024.
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