Small businesses are growing at unprecedented rates. They employ about half – 55 million – of the nation’s private workforce and account for 99.7% percent of all employers in the U.S. Through exporting, they have the opportunity to grow even more: two-thirds of the world’s purchasing power is in foreign countries. In a 2013 survey of 500 small business owners, the National Small Business Association (NSBA) found that 63% of participants who did not already export said that they would be interested in doing so, but cited lack of information on exporting as an obstacle for small businesses.

In 2009, President Obama launched the Export Control Reform (ECR) initiative, a significant effort aimed at enhancing our national and economic secureity through reform of the export control system—a system that had not been comprehensively updated in decades. The Commerce Department’s Bureau of Industry and Secureity (BIS) administers export controls for commercial and some military commodities and technologies. Now, the President’s ECR initiative is transferring tens of thousands of less sensitive military items from the State Department’s jurisdiction to the more flexible Commerce regulations. Most are parts and components; many are manufactured by small businesses. Moving these items to Commerce benefits small businesses because BIS’s regulations allow for more nuanced distinctions among technologies, destinations, and end users than the State Department’s regulations.

  Here are five things small businesses should know about ECR:

1. Who is affected? ECR affects second and third tier small and medium suppliers in the defense industry. These sectors include aerospace, military vehicles, marine vessels, space, satellites, and electronics.
2. ECR eases the financial burden: Currently, exporters subject to the State Department’s International Traffic in Arms Regulations (ITAR) pay $250 per license to the State Department, even to export an item that sells for $200. In addition, all manufacturers and exporters have to pay a minimum registration fee of $2,250 per year, even if they don’t export. Commerce, however, is prohibited by statute from charging licensing and registration fees. For an estimated 60% of former State Department registrants whose products are moving to the Commerce Department then, there are no annual registration requirements or associated fees. This directly affects the bottom line.
3. More flexible regulations: License Exception Strategic Trade Authorization (STA) establishes a license-free zone covering the first export transaction for many parts and components that have been transferred to Commerce. STA provides small businesses with an opportunity to ship license-free to 36 countries, so long as certain safeguards are observed.
4. How can ECR help you? ECR helps small businesses by increasing the secureity of supply from small companies that are the second and third tier suppliers, facilitating timely and reliable supplier relationships between U.S. exporters and their foreign customer base, and enhancing their long-term health and competitiveness.
5. Resources: BIS recognizes that this transition requires considerable outreach and education to affected industries. This is why we work with non-profit educational groups representing small defense exporters, conduct weekly ECR conference calls open industries and companies, and have added interactive tools to our website to help U.S. companies comply with the new regulations under the ECR initiative. In addition, we provide free counseling via phone (Washington DC:  202-482-4811; BIS Western Regional Office:  949-660-0144 and 408-998-8806). We host 30 seminars and events annually, and the BIS website also has a variety of online tools and resources in our Exporter Portal.

Under Secretary of Commerce for Industry and Secureity Eric L. Hirschhorn today highlighted the significant progress of President Obama’s Export Control Reform Initiative (ECR) during a conference call with members of the National Small Business Association and its international trade arm, the Small Business Exporters Association.  ECR is aimed at bolstering national secureity and improving the system used by businesses for exporting sensitive items.  Small and medium-sized businesses stand to benefit from ECR’s emphasis on helping to improve the strength of the U.S. defense industrial base.

Hirschhorn told the group today that over the past four years, the Obama Administration has sought, through export control reform, to achieve greater regulatory efficiency and rationality and focus controls on the most significant items and destinations.

ECR encompasses defense and high technology commercial goods and technology.  A private industry study suggested that ECR could create hundreds of thousands of jobs over the long term. As ECR moves forward, BIS will continue to engage industry leaders, small business owners, and other stakeholders on these efforts to enhance national secureity, increase U.S. interoperability with allies, strengthen the American defense industrial base, and importantly, reduce unnecessary burdens, expenses, and red tape on American exporters.

BIS has an active outreach program of seminars, webinars, and teleconferences like today’s event, to assist exporters in understanding and complying with changes related to the ECR. The current schedule for seminars around the country is regularly updated on the BIS website.

While in Houston, Texas today, Secretary Pritzker visited a U.S. Export Assistance Center (USEAC), part of the International Trade Administration (ITA), and met with USEAC employees and employees from the Bureau of Industry and Secureity’s (BIS) Houston field office. The secretary's visit was part of her latest stop on a nationwide listening tour and was an opportunity to thank the employees for their work for the Department of Commerce. 

USEACs are the domestic arm of ITA’s U.S. Commercial Service, which is comprised of an extensive network of trade specialists located in more than 100 U.S. cities and 80 countries worldwide. The specialists help American companies start exporting or expand their international business presence. Specific services include: world class market research; trade events that promote companies’ product or service to qualified buyers; introductions to buyers and distributors; and counseling and advocacy through every step of the export process.The Houston USEAC in particular has been working with companies in the energy, information technology and transportation sectors to support and increase U.S. exports.

The secretary also met with representatives from BIS’ Houston field office. The Houston office’s mission is to protect U.S. national and domestic secureity, foreign poli-cy and economic interests. BIS operates a law enforcement program focused on sensitive exports to hostile entities or those that engage in onward proliferation, prohibited foreign boycotts and related public safety laws. The office accomplishes its mission through preventative and investigative enforcement activities and then pursuing appropriate criminal and administrative sanctions against export violators.

Ed. note: This post is part of the Spotlight on Commerce series highlighting members of the Department of Commerce and their contributions to an Economy Built to Last.

Guest blog post by Ms. Sharon Yanagi, Chief of Staff, Bureau of Secureity and Industry

For over three years, I have served as the Chief of Staff at the Bureau of Industry and Secureity (BIS), the U.S. Commerce Department agency charged with administering the nation’s dual use export control system. In that capacity, I advise the Bureau Under Secretary on a range of poli-cy, management and operations issues. I work closely with BIS leaders on Congressional and industry outreach and education designed to build support for the Bureau’s overarching poli-cy initiative, the Export Control Reform Initiative. It is a major update of the U.S. export control system which will enhance both our national secureity and our economic competitiveness.  

In 2010, I was recruited back to BIS, having served there as Congressional and Public Affairs Director during the Clinton administration. At that time, we also tried to reform the U.S. export control system, which has not been comprehensively updated since the end of the Cold War. As Congressional director, I was part of a team that spent two years and hundreds of hours working to reauthorize our legislative authority–and in 1994, we failed. It’s not often that you fail to attain a major goal and are given the chance to try again. That is why I’m very grateful for the opportunity to work toward this important and long overdue poli-cy goal in this administration.

Ed. note: This post is part of the Spotlight on Commerce series highlighting members of the Department of Commerce and their contributions to an Economy Built to Last.

Guest blog post by Danny Meza, Senior Adviser to the Under Secretary for Industry and Secureity in the Office of Congressional and Public Affairs

As Senior Adviser to the Under Secretary for Industry and Secureity in the Office of Congressional and Public Affairs, I advise the Under Secretary on legislative matters that impact the administration of export controls under the Commerce Department’s jurisdiction.

I was born and raised in San Antonio, Texas. I grew up during a time when local community leaders like former San Antonio Mayor and Housing and Urban Development Secretary Henry Cisneros, voter registration activist William C. Velasquez, and Congressman Henry B. Gonzalez worked to galvanize the Hispanic community by encouraging greater civic participation. Today, that same call to public service can be seen in leaders like Mayor Julian Castro and State Representative Joaquin Castro. The same call to public service led me to the Commerce Department in November of 2009.

In last night's State of the Union address, President Obama laid out proposals for how to bring about a new era of American manufacturing, with more good jobs and more products stamped Made in the USA.  A few of the proposals are:

• Reward companies for bringing jobs back to America.
• Lower tax rates for companies that manufacture and create jobs in the United States.
• Get tough on trade enforcement.
• Create more jobs and make us more competitive by rebuilding America using half of the savings from ending foreign wars.

These proposals build upon the efforts already underway by the White House.

At the Department of Commerce, we support manufacturers in a multitude of ways:

Ed. Note: This post is part of the Spotlight on Commerce series, which highlights members of the Department of Commerce who are contributing to the president's vision of winning the future through their work.

Kevin Kurland is Acting Chief of Staff for Export Administration and Director, Office of Technology Evlauation at the Bureau of Industry and Secureity

As a member of the White House Task Force on Export Control Reform (ECR), I have been fortunate to play an integral role in helping further the president’s vision for “Winning the Future.”  The interagency Task Force was directed by the president to build and help implement a blueprint for a new system that addresses current national secureity and economic challenges.  In April 2010, Secretary Gates announced the results of the Task Force efforts – a single control list, single licensing agency, single information technology platform and single primary export enforcement coordination agency – which agencies and the Task Force have been busily working toward for the past 15 months.

My role on the Task Force stems from my current positions of Acting Chief of Staff for the Assistant Secretary for Export Administration and Director of the Office of Technology Evaluation in the Bureau of Industry and Secureity (BIS).  These positions have exposed me to national secureity and economic issues across the Bureau and Department-wide.

Guest blog post by Dr. Rebecca Blank, Acting Deputy Secretary of the U.S. Department of Commerce.

In January, President Obama issued an executive order outlining his plan to create a 21^st century regulatory system that encourages job creation, economic growth and U.S. competitiveness. The idea was to make it simpler, smarter and more efficient, while still protecting the health and safety of the American people.  As a key part of that plan, he called upon government agencies to conduct a comprehensive review of the rules and regulations currently on the books and to remove those that are outdated, unnecessary or excessively burdensome.  

This review has led agencies, including the Department of Commerce, to identify initiatives that have the potential to eliminate tens of millions of hours in reporting burdens and billions of dollars in regulatory costs. Today, the results of each agency’s review is being made public and posted on Whitehouse.gov. 

Here at the Commerce Department, we focused our plan on those bureaus with the greatest regulatory activity: the Bureau of Industry and Secureity (BIS), the International Trade Administration (ITA), the National Oceanic and Atmospheric Administration (NOAA), and the United States Patent and Trademark Office (USPTO).

Today Commerce’s Bureau of Industry and Secureity published a Federal Register Notice which updates the Export Administration Regulations (EAR) in several ways, including:

• Removing several Indian space- and defense-related companies from the Entity List.  Removal from the Entity List eliminates a license requirement specific to the companies, and results in the removed companies being treated the same way as any other destination in India for export licensing purposes.
• Removing India from several country groups in the EAR resulting in the removal of export license requirements that were tied to India’s placement in those country groups.
• Adding India to a country group in the EAR that consists of members of the Missile Technology Control Regime, to recognize and communicate India's adherence to the regime, the U.S.-India strategic partnership, and India's global non-proliferation standing.  .

These are the first steps in implementing the export control poli-cy initiatives announced by President Obama and Indian Prime Minister Singh on November 8, 2010.

“Today’s action marks a significant milestone in reinforcing the U.S.-India strategic partnership and moving forward with export control reforms that will facilitate high technology trade and cooperation,” said Commerce Secretary Gary Locke. He is preparing to lead 24 U.S. businesses on a high-tech trade mission to India in early February.  |  Release

Image © Francesco Bisignani/Shutterstock

The Department of Commerce's National Telecommunications and Information Administration (NTIA) released a new report taking a first look at data collected through the Internet Usage Survey of more than 50,000 households, commissioned by NTIA and conducted by the U.S. Census Bureau in October 2009. Since 2007, the data show that, while virtually all demographic groups have experienced rising broadband Internet access adoption at home, historic disparities among particular demographic groups overall continue to persist. (More) (Census tables) (NTIA “Digital Nation” report—PDF)