Many valve companies must currently obtain export licenses for shipments of certain commercial products that could also potentially be used for nuclear or chemical weapons purposes. There have been more than 50 federal enforcement cases in recent years against fluid handling companies that did not obtain required licenses. Some of the penalties in these cases are counted in the millions of dollars and some company officials are in jail because they did not comply with U.S. export control regulations.
Now new export license requirements for valves are close to implementation in an international forum. If they move forward, a change will be implemented in U.S. export control rules. The proposed change could significantly expand export license requirements for multiple international shipments for certain valve manufacturers.
Current State of Play
Currently, bellows seal valves, 304 and 316 stainless valves, and certain large high-pressure valves are listed as controlled products under the U.S. Commerce Control List, which is administered by the U.S. Commerce Department’s Bureau of Industry and Security (BIS). But other valves that fall into the strict definitions of the chemical equipment Export Control Classification Number (ECCN) 2B350.g category have caused the most trouble for industry. That category currently controls valves larger than 1 centimeter, and valve bodies and liners for valves over 1 centimeter, where all of the wetted surfaces (including coatings) are made from:
- 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 (Author comment: When thinking about these first two nickel and alloy metal categories, think about Inconel, certain Hastelloys, and the many other high-nickel content, chemically resistant metal alloys)
- g.3. Fluoropolymers (polymeric or elastomeric materials with more than 35% fluorine by weight) (Author comment: When thinking of fluoropolymers, think Teflon, Kynar, PVDF and the many, many other chemically resistant valve materials that have fluorine content)
- 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)
- (Note that a recent rule change instructed companies to ignore certain sealing elements in conducting their classification process under 2B350.)
The principal international group (including U.S. officials) that establishes which valves need export licenses and which don’t, is seriously contemplating an expansion of the list of valves that would need licenses prior to export to most international destinations. The proposed change would expand the 2B350 valve control to include: 1) valves between 1 to 4 inches, 2) where the closure element is designed to be interchangeable (i.e. not custom made for one valve), and 3) the body or liner of the valve is made from one of the 2B350 controlled materials. (Just the body or liner would be required to meet the material specification for this size range of valves to require an export license, not the entire wetted path.)
Thus, for valves of 1 to 4 inches that could accept a standard closure element for the product line, the focus would only be on the body, liner or coating material as the trigger material for an export license requirement. So, if you are making valve bodies from any of the listed materials, or you are making liners or you are coating your valve body with any of the listed material, your product could come under proposed new controls. Commerce is particularly concerned that standard valves that have fluoropolymer coatings on body interiors would fall under the proposed controls.
The new rules are not in place yet. There is still a short window of opportunity in which to get your company’s comments to the Commerce Department regarding the advisability of U.S. policymakers agreeing to this new control language.