for small exporters, security-related regulations can be a thicket

by:Rocket PCB     2019-09-28
Richard Kincaid\'s family business is a printed circuit board that not only powers consumer electronics and household appliances, but also power war tools --explosive-
Equipment Interference and avionics systems.
K & F Electronics, based in a very square industrial suburb of northeast Detroit, should have a strong business selling its products to many different customers for multiple uses.
But Kincaid is part of many small manufacturers across the country who are fighting hard to continue production in the United States.
One challenge, many say, is to try to keep up with federal export controls set by Washington regulators.
These controls should help the United States to walk the wire between national security and commercial interests, but the exponential speed of technological progress and the inherent complexity of the manufacturing process make it difficult to develop transparent and durable regulations, the Obama administration has made efforts for reform.
Big companies such as Northrop Grumman, Boeing and General Electric have sophisticated export compliance businesses that help them in Washington
There is nothing like this in kinkai.
He said that in an economy struggling to get rid of the downturn in the global recession, it took most of his time to just keep the lights on.
K & F registered for about $3, he said.
Annual sales reached 5 million, with four recent job cuts and a four-day working week.
\"Things have been falling for the past six to eight months,\" said Jin Kai, who has kept a batch of businesses lost to China in his tiny windowless office.
\"We received orders, but there were fewer orders.
At this rate, he said, \"I think I will be out of business in 10 years . \"
\"People who grew up in the Midwest will immediately recognize the small K & F --
Home in Fraser Town.
Not far from the K & F factory there is a Kmart, auto repair shop, hobby shop and a deli wholesaler.
When Kim Kai brought a vintage popcorn, he occasionally had \"popcorn Friday\"
Design Style popcorn makers for his employees who make popcorn in less time.
\"We don\'t pay much,\" Jin said . \"
\"But what are we going to do?
Every circuit board launched in Kincaid\'s 24,000 square feet of industrial space starts with customer invoices and computer files.
Once Kincaid\'s employees process orders according to their specifications, the circuit boards are carved out of large, flat copper sheets stacked in the factory.
These sheets move through the production process, most of them automated over the years, and most of them require messy chemicals that are strictly regulated by federal guidelines.
Finally, each component is strictly tested.
In short, this is the manufacturing industry facing the most fierce competition overseas. Cheap labor is an obvious advantage overseas.
There is a price to comply with strict export regulations, but in this regard, government officials and industry experts believe
Board business is a bit unusual: While many companies see export regulations as a burden, the circuit industry tends to take the strictest controls because of \"Made in America\"S. A.
\"Badge of honor.
Kincaid said that if the invoice tells him that the board is ITAR (
International arms transport regulations of the State Council)
He knows he can\'t make it in China because it costs less.
The simple solution seems to be to avoid ITAR orders that need to be produced in the approved country.
He said that the cost of establishing a board in the United States was \"100 to 400% higher\" than Kincaid, but he did not hesitate to fill out the documents and pay for them five years ago, and now it has exceeded $2,000, become ITAR-
Register the manufacturer because he appreciatesin-the-United-
He expressed his emotions and thought it might \"bring back some work.
This not only deepens his business prospects, but also complicates him.
People in the circuit
The board industry makes an analogy between military boards and books full of confidential information.
The technique of making a sensitive board or book is not technology, but information contained in it.
Fern Abrams, director of government relations and environmental policy at the industrial trade group IPC, said ITAR regulations should list circuit boards in the ammunition section.
\"This is almost a basic thing in common --
If you understand, feel the measurement.
Most people don\'t.
How much information is in the board, \"she said.
Not only that, knowing the layout of the board, even if the components or data have not yet been posted, may provide valuable intelligence to hostile organizations.
Understand the circuit-
For example, the circuit board design of the avionics system can reverse the foreign military
According to the IPC white paper by Peter Lichtenbaum, Washington lawyer and former assistant secretary of commerce for the Export Administration, key elements of system design are designed.
As Abrams has seen, the problem for businesses like Kincaid is not complying with export controls, but rather uneven application of controls.
Her organization, for example, saw the same bid request, \"one stamped with ITAR chapter and one not stamped with ITAR Chapter\", she said \".
Therefore, if one company meets the requirements and the other does not, then the manufacturer who does not meet the requirements will gain a significant competitive advantage, assuming that no one is from the state, commerce or finance department --
Three institutions with different computer systems, missions and cultures are responsible for export control.
Determining whether, where and under what conditions a company can sell its products overseas can be a difficult process.
First of all, the exporter must have a detailed understanding of the products it sells, which is far beyond the key points of the salesperson\'s conversation.
Suppose Kincaid\'s K & F makes a circuit board for a telecom company that sells antennas that can be used for military or civilian purposes.
Telecom companies must determine whether it is bound by commercial or State Council regulations that lead to a series of emergencies.
For example, for national security reasons, the Ministry of Commerce needs a permit to send certain items if they \"have an acoustic carrier frequency outside the range of 20 kHz to 60 kHz,\" as specified.
Exporters selling such equipment do not need a license to sell their products to obvious allies such as Australia, but may need a license from trading partners such as India.
However, if the antenna is designed for sensitive military vehicles, the licensing jurisdiction belongs to the State Council.
It has far more stringent restrictions on military goods.
Unlike business regulations, the State Council requires a clear authorization to export almost all products belonging to ITAR.
So, a defense contractor carries equipment for the American army. S.
Military use on foreign battlefields must be authorized to \"export\" products to foreign countries.
What is Jin Kai\'s responsibility?
Kincaid said: \"If the customer has never said ITAR, then the board can be sent to a foreign country as far as we are concerned.
\"Lichtenbaum, a lawyer working for the Circuit Court-
The board industry said the responsibility for compliance with the regulations fell on exporters.
So when K & F sends a batch of boards to a customer who intends to export, that customer should know where the board will go and who will use it.
In a globalized economy, it can be difficult to determine the use of end users and products, but complex catsand-
Mouse games played by countries like China and Iran can raise the risk to levels that small manufacturers are not ready.
For a country looking for sensitive materials, a common technology is to set up a shell company in shipping centers like Singapore and \"ping\" America. S.
The company is trying to find a company that inadvertently exports sensitive technology.
This is the classic part of a smart game in which countries go to multiple places to collect different parts of a larger puzzle.
So if an entity is banned, even an honest small company will find itself in trouble --
Individual, company or country
Let the United States master technology. S.
The government believes there are security risks.
Penalties for violation of regulations are significant.
The company faces a fine of up to $250,000 per violation.
For criminal offences that prosecutors must prove their intent, penalties for each offence can reach $1 million and 20 years\' imprisonment. Eric L.
Hirschhorn, deputy minister of commerce for industry and safety, said his department recognized the difference between purposeful violations and accidents.
\"If a company has made a decent effort to develop an internal compliance plan, but someone has made a mistake, I think it should be treated differently from others, hirschhorn said: \"Everyone does this and they will never catch me. \".
\"I\'m trying to make sure we notice the difference.
\"As law enforcement has risen significantly, companies across the country are scrambling to speed up regulation.
In 2007, the Ministry of Justice set up a national export control coordinator to carry out criminal offences, while the Ministry of Commerce employed more than 100 special agents with the right to arrest.
To highlight this, the Commerce Department issued a 56-
A copy in 2010 called \"Don\'t let this happen to you! ”;
It outlines all the ways in which exporters are in legal trouble.
The Ministry of Commerce, the State Council and the Ministry of Finance provide guidance for complex regulations, but some businesses are worried that calling them will raise doubts.
The complexity of the export control system has been plagued by each
Brent Pasco said that the general Unified lawyer of the Cold War period and the founding member of the National Security Council\'s export control reform task force, he helped to develop new regulations, the government began issuing these regulations at the end of last year for industry comment.
In 2009, President Obama launched his own export control reform program, which includes a website, a blog and a fact sheet.
Mr. Pasco said Mr. Obama\'s instructions to employees were just to \"make it better \".
\"At the heart of Obama\'s reform plan is to simplify the business control list and the US trade policy. S. Munitions List.
The idea, Pasco said, is to move items from strict ammunition regulations to a commercial list. An oft-
The repeated words of the export control community are \"building higher fences around a smaller yard.
\"In the office of constitutional Avenue, Kevin Wolf, assistant secretary of export administration at the Ministry of Commerce, has been drawing to illustrate the complexity of updating regulations.
He called it an exit.
Regulatory reform is an \"iceberg\" and the government sees the burden of licensing as the tip of the iceberg.
Some of the potential unintended consequences of the business, including the time and money used to determine whether an authorization is required.
\"This is a national security issue because it is damaging the foundation of our defense industry,\" said Deputy Commerce Minister Hirschhorn . \".
\"With the reduction in defense budgets, small and medium-sized enterprises
Large businesses that make these components sell fewer products to the Ministry of Defense, and it is difficult or impossible for them to sell overseas.
The Obama administration is also trying to build a unified computer system, and most ambitious of all, an organization that handles all export controls.
Chris Wall, a Washington lawyer and former assistant secretary of commerce at the Export Authority, believes that computer systems are critical and an obvious move.
\"It\'s under the radar.
Nobody sees it, but it\'s a big step . \"
On the other hand, creating a new federal agency requires legislation in a political environment in which even things aimed at streamlining bureaucracy can be a tough sale.
\"The idea of merging every bureaucracy was dead when it arrived, because it was unnecessary,\" Wall said . \".
Wall thinks the Obama administration\'s health is comparable.
Legislation on export control and how it is implemented.
He called it \"allor-
There is no way but to see what works.
\"He thinks the system needs to be updated, but it\'s not completely on hold.
The regulatory framework today, he said, \"is like taking an old computer and using it for modern functions \".
Lawyer Lichtenbaum, who worked in the Circuit Court-
The board trade organization says the Obama administration is working hard on the issue, but he is as concerned about the scope of reform as wall.
\"This means that some of the actual problems have not been solved,\" Lichtenbaum said . \".
There is a risk, \"Nothing important will disappear from it.
Despite his criticism of the government
Wall said, \"many things have happened in recent months in the reform of export control \", and called for substantial progress in drafting regulations to transfer items on the ammunition list to the commercial list.
However, he noted that the Arms Export Control Act requires Congress to give notice before transferring items.
These details are still being worked out.
Pasco describes these interests as \"life and death\" in several ways \".
In the hands of the wrong people, sensitive technology can be used against the United States. S.
Troops on the battlefield
Of course, financial penalties that violate regulations can have serious consequences, especially for a small company.
Despite the Obama administration\'s efforts to reform export controls, he has pushed for a national plan to double exports and create 2 million jobs by 2014.
Although it is very careful to separate these two goals.
From arms control and human rights experts to security hawks to manufacturers struggling to survive, all the different interest groups are involved, and the most prominent group is the American public.
So far, export control reforms have not been hampered by partisan hatred surrounding the environment and other regulatory struggles of the financial system.
Technical bureaucrats from both parties have basically solved the problem, away from the glare of cable news and blogs --and voters.
The balance that regulators must strike is to build a system that protects the American economy. S.
National security, respect for international human rights and engage enterprises in competition.
Jin Kai said that he did not have time to focus on the details of the export control reform, but relied on his membership in IPC, a trade association lobbying on behalf of the industry.
In the meantime, Kincaid keeps K & F operational through personal relationships with suppliers, good building leases and modern developments: domain names.
Kincaid said his nephew Ken Burbary persuaded him to buy a domain name related to his business.
\"Don\'t buy the company name,\" Burbary told him . \".
\"Buy your product.
That\'s what Jin Kai did.
According to his statistics, he has 70 domain names related to printed circuits.
Circuit board industry including mouth watering board. com.
These precious commodities have proved inaccessible to export control.
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