10162018Tue
Last updateMon, 15 Oct 2018 7pm

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Important Change Coming to Key Valve Export Category

Important Change Coming to Key Valve Export CategoryThe U.S. valve industry has been hit very hard over the last seven years by export control penalties. Over 50 companies in the fluid handling industry, including numerous valve companies of all sizes, have paid penalties ranging from $250 million to tens of thousands of dollars in connection with violations of export controls. Companies have seen their names publicized in connection with violations of U.S. law and their reputations before key U.S. government agencies have been severely damaged. A number of those penalty cases arose because companies were not prepared for a series of past changes in the Export Administration Regulations (EAR), which are implemented by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS). Now, a new set of changes is coming to export controls on valves that can be used to handle chemicals. Companies have a chance to prepare for the change in rules and avoid violations.

The U.S. is a member of an informal international organization called the Australia Group, which was set up to coordinate efforts to fight the spread of chemical and biological weapons. Recently, the U.S. and other Australia Group countries agreed to a revision of one of the primary valve export control categories covering chemical equipment; under the U.S. controls this is the Export Control Classification Number (EAR) 2B350.g valve category.

Existing Language

Presented below is the existing U.S. ECCN 2B350.g language. (Note that a full understanding of the application of the ECCN 2B350.g control requires reading the entire 2B350 category [not presented here], in addition to other parts of the EAR.)

Valves with nominal sizes greater than 1.0 cm (3/8 in.), and casings (valve bodies) or preformed casing liners designed for such valves, in which all surfaces that come in direct contact with the chemical(s) being produced, processed or contained are made from any of the following materials:

g.1. Alloys with more than 25% nickel and 20% chromium by weight;

g.2. Nickel or alloys with more than 40% nickel by weight;

g.3. Fluoropolymers (polymeric or elastomeric materials with more than 35% fluorine by weight);

g.4. Glass (including vitrified or enameled coating or glass lining);

g.5. Tantalum or tantalum alloys;

g.6. Titanium or titanium alloys;

g.7. Zirconium or zirconium alloys;

g.8. Niobium (columbium) or niobium alloys; or

g.9. Ceramic materials, as follows:

g.9.a. Silicon carbide with a purity of 80% or more by weight;

g.9.b. Aluminum oxide (alumina) with a purity of 99.9% or more by weight; or

g.9.c. Zirconium oxide (zirconia).

Technical Note to 2B350.g: The “nominal size” is defined as the smaller of the inlet and outlet port diameters.

New Language

Following is the new language for U.S. ECCN 2B350.g:

1. Valves

a. Valves, having both of the following:

  1. A nominal size greater than 1.0 cm (3/8"), and
  2. All surfaces that come in direct contact with the chemical(s) being produced, processed, or contained are made from the materials of construction in Technical Note 1 of this entry

b. Valves, not already identified in paragraph 6.a., having all of the following:

  1. A nominal size equal to or greater than 2.54 cm (1") and equal to or less than 10.16 cm (4")
  2. Casings (valve bodies) or preformed casing liners,
  3. A closure element designed to be interchangeable, and
  4. All surfaces of the casing (valve body) or preformed case liner that come in direct contact with the chemical(s) being produced, processed, or contained are made from the materials of construction in Technical Note 1 of this entry

c. Components, as follows:

  1. Casings (valve bodies) designed for valves in paragraphs 6.a.or 6.b., in which all surfaces that come in direct contact with the chemical(s) being produced, processed, or contained are made from the materials of construction in Technical Note 1 of this entry;
  2. Preformed casing liners designed for valves in paragraphs 6.a.or 6.b., in which all surfaces that come in direct contact with the chemical(s) being produced, processed, or contained are made from the materials of construction in Technical Note 1 of this entry.

Technical Note 1. Materials of construction for valves are any of the following:

(a) nickel or alloys with more than 40% nickel by weight;

(b) alloys with more than 25% nickel and 20% chromium by weight;

(c) fluoropolymers (polymeric or elastomeric materials with more than 35% fluorine by weight);

(d) glass or glass-lined (including vitrified or enameled coating);

(e) tantalum or tantalum alloys;

(f) titanium or titanium alloys;

(g) zirconium or zirconium alloys;

(h) niobium (columbium) or niobium alloys; or

(i) ceramic materials as follows:

  1. silicon carbide with a purity of 80% or more by weight;
  2. aluminum oxide (alumina) with a purity of 99.9% or more by weight;
  3. zirconium oxide (zirconia).

Technical Note 2. The “nominal size” is defined as the smaller of the inlet and outlet port diameters.

Analysis and Action Item

The above language will be making its way into all Australia Group member state regulations over time. The publication of the change in the U.S. Federal Register, which is required before the U.S. can implement the control, does not appear to be imminent, so the existing control language will remain in effect until the new rule is implemented. That said, now that the change has been agreed to by the U.S. and accepted as the new Australia Group standard, it will become U.S. law. While there is still time, it is important for valve manufacturers, distributors, resellers, engineering companies and others in the fluid handling industry to determine how the new control will apply to products, software, technology transfers and the provision of services so that export licenses are obtained when required. The ECCN 2B350 control category and the three associated 2E technology (know how) categories require U.S. export licenses for over 155 countries, many of which are popular export destinations. Remember, releases of controlled technology in the United States to nationals of those 155-plus countries also require U.S. export licenses in many situations.

Given the ambiguity of some of the terms in the new control, reclassifying products will not be easy, so getting started on this project now is important.

Eric McClafferty is an attorney specializing in export controls, sanctions and many other international trade law issues. He has extensive experience working with U.S. and international fluid handling equipment companies. In addition to running the Valve Manufacturers Association/Hydraulic Institute international trade task force, he works individually with a number of VMA and HI member companies on their compliance programs. McClafferty can discuss the proposed rule change informally with anyone who is interested and particularly with VMA members. Reach him at 202.342.8841 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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