DoC Restricts Chemical Equipment Exports

The cover story of the May issue of Flow Control detailed a recent effort by the Department of Commerce (www.commerce.gov) to bolster licensing requirements for the export of certain types of chemical processing equipment ("Exporting the Chemical Process," page 12). In a final rule published Aug. 5, Commerce changed the law regarding chemical processing pumps and added certain spraying and fogging systems to the list of products that require an export license.

Instead of listing different types of pumps (e.g., diaphragm, magnetic drive, bellows), as in the prior rule, the new rule covers all "multiple seal and sealless pumps with manufacturers’ specified maximum flowrate greater than 0.6m3/hour" if the wetted parts of those pumps are made from chemically resistant materials listed in the rule (To view the rule in its entirety, visit (www.colliershannon.com/documents/PumpRuleChange8-5-2005.pdf) . Thus, multiple sealed (i.e. pumps with more than one seal) and sealless pumps over the specified flowrate with wetted parts of one (or a combination) of the following materials on the entire wetted path require a license for export to over 150 countries:
• Alloys with more than 25 percent nickel and 20 percent chromium by weight
• Ceramics
• Ferrosilicon
• Fluoropolymers
• Glass (including vitrified or enameled coatings or glass lining)
• Graphite or carbon-graphite
• Nickel or alloys with more than 40 percent nickel by weight
• Tantalum or tantalum alloys
• Titanium or titanium alloys
• Zirconium or zirconium alloys

Certain components for pumps specified in the rule are also controlled for export, as are certain vacuum pumps. An export license (or license exception) is required before these pumps can be (a) exported from the United States; (b) re-exported from the country to which the U.S. exporter sent them under license; or (c) transferred in a foreign country for certain end uses. Described as a clarification, this change is already creating uncertainty about whether certain pumps require a license for export or not.

The Aug. 5 rule also revises export controls by adding on certain spraying or fogging systems, spray booms or arrays of aerosol generating units, and parts for those units. These items were added to the list due to fears that they could be used to disperse harmful substances.

In the last two months, Commerce announced that two U.S. companies received significant penalties for export control violations involving controlled pumps. These companies settled their enforcement cases with the government for $700,000 and $123,500, respectively. The company that received the $700,000 penalty was also banned from exporting from the United States for three years, although this penalty was suspended. Commerce has announced six export control cases on pumps that can be used for chemical processing since 2001 (five since May 2003). Two of these cases were settled for approximately $700,000, and one was settled for $171,000. In 2004, another case involving controlled valve exports was settled for just under $500,000.

— Flow Control Staff

Eric McClafferty, Esq. contributed reporting for this article. Mr. McClafferty is a partner in the international trade and customs practice of Collier Shannon Scott. He can be reached at [email protected].