Overview
On August 19, President Trump signed the bipartisan “Maintaining American Superiority by Improving Export Control Transparency Act” (the “Act”). The Act amends the Export Control Reform Act of 2018 (50 U.S.C. §§ 4801-4852) (the “ECRA”), specifically section 4815, by creating new, significant transparency requirements for the U.S. Department of Commerce's Bureau of Industry and Security (“BIS”) regarding export licensing activities and end-use checks. The Act is a response to congressional concerns regarding BIS’s export licensing activities and BIS’s administration and enforcement of export controls on China and other arms-embargoed countries.
Background and Overview
The Act requires the Secretary of Commerce to submit a report to Congress annually on export license applications or other requests for authorizations submitted to BIS, as well as end-use checks undertaken by BIS. Not all such applications or end-use checks are subject to the reporting requirement—only those where an entity that is located in a Group D:5 country and on the BIS Entity List or the Military End-User List is involved. This includes certain entities located in China, Russia, and Venezuela, among others. The reporting requirement covers exports, reexports, releases, and in-country transfers.
For license applications or requests for authorization, the report must include (i) the name of each applicant or requestor; (ii) a brief description of the item(s) to be transferred, including the Export Control Classification Number (“ECCN”) and the reason for control; (iii) the name of the end-user; (iv) the end-user’s location; (v) a value estimate of the sale; and (vi) the decision BIS made with respect to the application or request. For end-use checks, the report must include the date, location, and result of the end-use check. The report must also include aggregate statistics on all license applications and other requests for authorization. With the exception of the aggregate statistics, the contents of the report are exempt from public disclosure.
The Act requires that BIS begin submitting annual reports not later than one year after the date of enactment, which would be August 19, 2026, and not less than once a year thereafter, subject to the availability of appropriations. The reports must be submitted to the Committee on Foreign Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.
The Act was first introduced to the 119th Congress on February 13, 2025, by Rep. Ronny Jackson (R-TX) and Rep. Sara Jacobs (D-CA), after a previous version, also submitted by Rep. Ronny Jackson alongside Rep. Michael McCaul (R-TX), failed to gain traction in the 118th Congress.
Sen. Jim Banks (R-IN) and Sen. Mark Warner (D-VA), who expressed concern that “BIS lacks transparency in reporting approved licenses, exported products, and the rationale behind its decisions, making congressional oversight difficult,” championed the companion bill in the Senate. When introducing the Act, the Senators also expressed concern that BIS “rarely enforces export controls on sensitive technology sales to China.”
The Act garnered strong bipartisan support, passing the House through a voice vote and the Senate through unanimous consent.
Implications
Companies participating in export activities involving entities on the Entity List or Military End-User List that are located in Group D:5 countries should be prepared for more direct and consistent congressional oversight of such export activities. There will likely be increased scrutiny of license applications involving such entities, which could lead to direct inquiries from members of Congress to companies and calls for more information, including testimony. While it appears that the actual license applications will remain with BIS, and only specified data will be reported to the identified committees, companies may need to consider what information and narrative statements are included in the applications. Furthermore, BIS will likely need to increase its use of end-use checks for items that are approved for export, reexport, or in-country transfer, which could put further strain on the agency’s resources.
It is not clear how many export license applications or other requests for authorization involving listed companies are made to BIS each year. Such applications are reviewed with a presumption of denial, and the burden of overcoming that presumption, especially for companies in certain Group D:5 countries, is substantial. Many exporters have concluded to forgo even seeking authorizations for such transactions. Nonetheless, for those who continue to pursue such authorizations, there will be a substantial increase in what may be considered proprietary information now in the hands of the congressional committees. This is a new circumstance that should be considered as part of the decision to seek such authorizations in the first place.
For more information, please contact a member of Steptoe’s Export Controls team.
