Annual BIS Update Conference
Held in Washington, DC July 29-31, the Bureau of Industry and Security hosted the "Update 2014 Conference on Export Controls and Policy", which is an annual event for industry leaders, government representatives and general stakeholders interested in current issues and trends in export control policies, regulations and practices. The predominant theme of the conference was the significant work that has been accomplished in Export Control Reform, and a number of senior officials provided their thoughts on the subject to the participants in attendance. Transcripts of remarks from the following speakers can now be accessed online:
State and Commerce Published Final Rules for Category XI
On July 1, the State and Commerce Departments published final rules for USML Category XI, which pertains to various military and other advanced electronics. State issued a press release that highlight the significance of the publication of these rules. These final rules result from two rounds of public comments and will go into effect on December 30, 2014. For more information, please see the State Department media note.
Portions of Satellite Rules Pertaining to Radiation-Hardened Microelectric Microcircuits Take Effect
On June 27, Final State and Commerce Rules relating to radiation-hardened microelectric microcircuits took effect. A summary of the relevant portions of both sets of rules is in the Commerce rule in response to Comment #38. Other portions of the satellite-related rules will take effect on November 10, 2014.
State and Commerce Publish Final Satellite Rules
On May 13, State and Commerce published final rules transferring certain satellites and components from the USML to the CCL. These rules are the product of extensive work between the Administration and Congress, in consultation with industry, to reform the regulations governing the export of satellites and related items. These changes will more appropriately calibrate controls to improve the competitiveness of American industry while ensuring that sensitive technology continues to be protected to preserve national security. The changes to the controls on radiation-hardened microelectronic microcircuits take effect 45 days after publication of the rule, while the remainder of the changes take effect 180 days after publication.
Revisions to U.S. Munitions Import List Published
On Thursday, March 27, the Department of Justice published a Final Rule that revises the U.S. Munitions Import List (USMIL) as part of the President’s Export Control Reform Initiative. These changes will remove defense articles that were on the USMIL but no longer warrant import control under the Arms Export Control Act, allowing enforcement agencies to focus their efforts where they are most needed. This important reform modernizes the USMIL and will promote greater security.
The Decontrol Myth
There is a misconception that ECR is simply a decontrol effort that will result in U.S.-origin items being more widely available for use in human rights abuses. In fact, the opposite is true. ECR that is a reprioritization of controls designed to focus U.S. Government resources on the most sensitive exports, tightening embargoes in the process. The Administration is only easing the export license requirement for less sensitive items, mostly parts and components, for ultimate end-use in a group of 36 countries that are NATO members or members of all four multilateral export control regimes. Additional compliance measures will apply to such exports to provide an audit trail. Licenses will still be required for items outside of the 36 countries, and the eased licensing burden will be balanced by an increase in the enforcement resources focused on the export of items that move to the Commerce Control List. For More information, please visit Export Control Reform Initiative Fact Sheet #8: Myths and Facts About the Impact of Reform on U.S. Foreign Policy Equities.
ECR is Strengthening Arms Embargoes
A key consequence of Export Control Reform (ECR) is the tightening of existing arms embargoes, especially against human rights violators. Far from a decontrol, ECR is adding controls to items not previously subject to U.S. and UN arms embargoes. While items moved from the U.S. Munitions List (USML) to the Commerce Control List (CCL) will continue to be subject to the same partial or total arms embargoes as before, military items that have been on the CCL since the early 1990s will also become subject to these same embargoes as well. There will be no diminishing of U.S. Government review of export license applications for these items. The Departments of Defense and State will continue to review license applications processed by the Department of Commerce for national security and foreign policy reasons as they already do for other items on the Commerce Control List. These rigorous enhancements to the existing system will make it less likely that U.S.-origin items will be available for human rights abuses.
State and Commerce Publish Third Set of Final Rules for Implementing ECR
On January 2, the Departments of State and Commerce published a pair of final rules implementing ECR. These rules revise USML Categories IV (Missiles, Launch Vehicles), V (Explosives), IX (Military Training Equipment), X Protective Personnel Equipment), and XVI (Nuclear Testing Equipment) and represent another milestone in advancing ECR as 13 of 20 rules have now been finalized. These rules will go into effect on July 1, 2014.
State and Commerce Publish Corrective Rules Applying to Four Revised Categories
On January 2, the Departments of State and Commerce published rules that made technical corrections to previously published final rules for Categories VI, VII, XIX, and XX. These rules took effect on January 6, 2014.
President Obama Issues Presidential Determination to Facilitate Satellite Reclassification
On October 25, President Obama signed a Presidential Determination delegating three functions pertaining to export controls for satellites and related items to members of his cabinet. These activities are required steps for transitioning certain satellites and related items from the U.S. Munitions List (USML) to the Commerce Control List (CCL) under the terms of the National Defense Authorization Act of 2013. They include the submission to Congress of:
These delegations will allow the Administration to meet statutory requirements and publish implementing regulations that will modernize the nation’s satellite export controls as part of the President’s Export Control Reform Initiative.
First Export Control Reform List Rule Changes Take Effect
On October 15, the first final export control list rules implementing Export Control Reform took effect. These rules initiate the historic process of fundamentally improving the nation’s control regime for the first time in a generation and include both structural changes as well as revisions to USML Categories VIII (Aircraft) and XIX (Gas Turbine Engines) that transition many less sensitive items from the State Department’s International Traffic in Arms Regulations (ITAR) to the more flexible Commerce Department’s Export Administration Regulations (EAR). USML Categories XVII (Classified Defense Articles) and XXI (Miscellaneous Articles) are also included in the final rules. Exporters can now take advantage of the improved licensing system and its more rational, tailored approach to export control for these categories. Please see the recently released White House Fact Sheet and State Department Media Note for more information.
October 4, 2013
Commerce Publishes Final Rule to Make the Commerce Control List Clearer
On October 4, 2013, the Bureau of Industry and Security published a final rule to clarify the Commerce Control List (CCL) to make conforming changes and minor clarifications in support of the two final rules initiating the implementation of Export Control Reform. This rule took effect on October 15 in conjunction with those rules.
October 3, 2013
Commerce and State Publish Corrective Rule
On October 3, 2013, the State and Commerce Departments published rules providing technical corrections to the previously published final rules implementing Export Control Reform, which took effect on October 15.
August 27, 2013
State Publishes new Brokering Rules
On August 28, 2013, the Department of State published a new final rule regarding the activities of brokers in transactions involving defense articles and defense services for exports and imports. This rule revision implements the President’s direction regarding consolidated brokering activities per E.O. 13637 of March 8, 2013, and is the result of a comprehensive review that included significant input from industry, and it can now be accessed online.
August 20, 2013
USML/CCL Rule Revisions Can Be Followed on ECR Website
You can keep abreast of the ECR list re-writes by accessing the ECR Control List Tracking Sheet on the ECR website’s “Export Control List” page. This document will provide you with an archive of the published proposed rules, public comments, and final rules for each re-written category. Check back often to follow the progress being made in reforming the control lists and regulatory framework.
July 29, 2013
Annual BIS Update Conference Held in Washington, DC
On July 23-25, the Bureau of Industry and Security hosted the “Update 2013 Conference on Export Controls and Policy”, which is an annual event for industry leaders and other stakeholders interested in recent and forthcoming changes to export control policy. This year’s theme was “Export Control Reform: Fulfilling the Promise”, and a number of senior officials provided their thoughts on the subject to the participants in attendance. Transcripts of remarks from the following speakers can now be accessed online:
State and Commerce Published Second-Round Proposed Rules for Category XI
On July 25, the State and Commerce Departments published a second round of proposed rules for USML Category XI – Military Electronics. This is the second set of proposed rules for this category, and there will be a 30-day public comment period that will close on September 9, 2013. The State and Commerce rules are now available online.
July 8, 2013
ECR Reaches Another Key Milestone as Second Set of Final Rules Publish
On July 8, 2013, the second set of rules implementing Export Control Reform were published. These rules include revisions to USML Categories VI (Vessels of War and Special Naval Equipment), VII (Tanks and Military Vehicles), XIII (Auxiliary Military Equipment), and XX (Submersibles). With this publication, eight of the 19 USML categories have now been rebuilt under ECR. The State and Commerce versions of these rules are now available online, and they will take effect in 180 days on January 6, 2014. More information can be found on the State Department website.
July 3, 2013
BIS Offers ECR Webinars and Teleconferences
For more information on ECR and other export control-related topics, BIS hosts regular webinars and teleconferences for the public that are available through the BIS website. This page can also be accessed from the ECR website by clicking on the “Weekly Teleconference” hyperlink located on the website sidebar.
June 3, 2013
BIS-Produced Tools for Understanding New “Specially Designed” Definition, the CCL Order of Review, and License Exception STA Now Available
In order to help exporters understand the way export control compliance will change as a result of ECR, the Bureau of Industry and Security (BIS) has produced a series of decision tree tools to help make the new “Specially Designed” definition and Commerce Control list classification easier to understand. These tools can be found on the BIS website, along with a third decision tree tool that will guide exporters in the use of the new license exception STA. In addition, BIS has also produced a free webinar to explain this new term that is available both as an online video and in transcript form on the BIS website.
To keep informed about future online trainings, please make sure to visit BIS’ ECR Teleconference and Webinar page, which can be accessed by clicking on the “Weekly Teleconference” link under the “For Exporters” heading on the sidebar of this page.
May 29, 2013
State and Commerce Publish Proposed Rules for Category XV
On May 24, 2013, the State and Commerce Departments published a pair of Proposed Rules to transfer certain satellites from the USML to the CCL. This move was made possible by an ECR milestone reached this past January 30: the passage of an amendment to the 2013 National Defense Authorization Act that returned flexible authority to the President to tailor controls on satellites and related items according to the risk of diversion. These Proposed Rules are the product of that restored authority, and comments will be accepted on these rules for a 45-day window, which will close on July 8, 2013.
May 3, 2013
Reports Submitted to Congress on Satellites and Related Items
On May 1, 2013, the Department of Commerce submitted two reports to Congress per Sections 1263(a) and 1264(b) of the National Defense Authorization Act for FY 2013. The “1263 Report” is on country exemptions for licensing of exports of certain satellites and related items prepared in consultation with the Departments of Justice and Homeland Security, and other appropriate departments. The “1264 Report” is on end-use monitoring of exports of certain satellites and related items prepared in consultation with the Departments of State and Defense. These reports represent key steps in the Administration’s implementation of rebuilding USML Category XV – Spacecraft Systems and Associated Equipment – that includes controls on satellites and related items.
April 25, 2013
State, Commerce, and Defense Testify at House Foreign Affairs Committee Hearing
On April 24, Acting Assistant Secretary of State Tom Kelly, Assistant Secretary of Commerce Kevin Wolf, and Defense Technology Security Administration Director James Hursch testified before the House Foreign Affairs Committee during a hearing entitled, “Export Control Reform: The Agenda Ahead”. During the hearing, the officials discussed the goals and status of the President’s Export Control Reform Initiative, and they also answered questions from committee members on a variety of related topics. The full video of the hearing is now available on the committee website, and copies of the opening remarks can be found below:
April 23, 2013
Justice Publishes Final USMIL-USML Delinking Rule
On April 22, 2013, the Department of Justice published a final rule to distinguish the list of import-related defense articles and defense services controlled by the Attorney General from those controlled by the Secretary of State. The State Department is charged with regulating the export and temporary import of defense articles and defense services, while the Justice Department regulates permanent imports of such items. Consequently, this rule provides clarity that items controlled on the Department of Justice’s U.S. Munitions Import List (USMIL) are not affected by the transfer of items from the Department of State’s U.S. Munitions List (USML) to the Commerce Control List.
April 18, 2013
Major Milestone Reached as First Pair of Final Rules Publish
On April 16, 2013, the first pair of rules implementing Export Control Reform were published. These rules include final versions of the “Specially Designed” and “Transition” rules, as well as revisions to USML Categories VIII (Aircraft), XIX (Gas Turbine Engines), XVII (Classified Articles and Technical Data), and XXI (Miscellaneous Articles). These rules were subjected to an extensive review by Congress and are the first category rewrites to be published in final form; as such, they are the first completed step toward the creation of a Single Control List. The State and Commerce versions of these rules are now available online, and more information can be obtained on the State Department website.
March 29, 2013
Public Comments for Categories IV, XI, and XVI Published
Public Comments for the following proposed rule changes are now published and available online:
March 8, 2013
Executive Order 13637 Signed, First Formal 38(f) Notification of Reform Process Submitted
On March 8, 2013, President Obama signed Executive Order 13637 to update delegated presidential authorities over the administration of certain export and import controls that have not been comprehensively updated in 36 years. This action makes changes needed to implement our new export control system. The Administration also notified Congress of the first in a series of changes to the U.S. Munitions List (USML), as required by Section 38(f) of the Arms Export Control Act, that advances the process of putting our new export control lists in place. Once the Congressional notification period concludes, these changes to the current Department of State-administered controls on aircraft and gas turbine engines will be published, with an effective date of 180 days after publication. The revised USML will enable the United States to better focus its resources on items that deserve the highest levels of protection and on destinations of concern, while providing American companies with a streamlined export authorization process for thousands of parts and components. The remaining USML changes will be published on a rolling basis throughout 2013. These actions are key steps in modernizing the nation’s export control system that will improve our national security and competitiveness. For further information, please see the White House Fact Sheet on these actions.
February 28, 2013
Is the implementation of Export Control Reform, particularly the rebuilding of the Department of State’s U.S. Munitions List (USML), dependent upon the departments all transitioning to the Department of Defense secure licensing database, USXPORTS, or implementing the planned single license application form?
Implementation of the rebuilt USML categories and the corresponding new “600 series” in the Commerce Control List (CCL) is not dependent upon the transition of all licensing and license reviewing agencies transition to USXPORTS or implementing a single license application form. All license-related activities can be implemented based on existing information technology systems and using existing procedures and forms.
February 15, 2013
How will the United States be “maintaining and expanding robust controls” as part of Export Control Reform?
In what cases will the current licensing policy be made more stringent for items transferred to the Commerce Control List (CCL) than when those same items were under the Department of State’s U.S. Munitions List (USML) control?
The U.S. Government will be maintaining and expanding robust controls in three ways. First, by enumerating controlled items to the greatest extent possible, and by defining the term “specially designed” for items that are not specifically enumerated, we will make clearer to exporters what items are subject to control. This will help avoid the ambiguity that has resulted in confusion for exporters and prosecutors in the past under both the State and Commerce regulations.
Second, all current military items on the CCL (as identified in Export Control Classification Numbers (ECCNs) ending in “018”) will be consolidated with the USML items being moved to the CCL. The Commerce regulations will be changed so that such items on the CCL will become subject to the same licensing policies as articulated in the State regulations in Part 126.1 for proscribed destinations. For example, those items will also no longer be eligible under the Commerce “de minimis” rule. These changes will expand controls on items for proscribed countries. Also, controls are being maintained in the sense that all exports, except in some cases to the countries eligible for License Exception STA (see factsheet #4 in the ECR library), will continue to require individual validated licenses. All applications to export these items to the countries subject to U.S. embargoes will be presumptively denied, which is the case now under the State regulations. Third, items moving to the CCL will result in more enforcement assets focused on compliance. In addition to the Department of Homeland Security and FBI enforcement assets, the availability of Department of Commerce enforcement authorities, Special Agents, and analysts will further enhance the U.S. Government’s ability to effectively control former USML items.
February 4, 2013
What are the “Higher Fences Around Fewer Items”?
Administration officials frequently state that the purpose of ECR is to put “higher fences around fewer items.” How will current defense articles or dual-use controlled items have more stringent licensing policies than at present and what is meant by “fewer items”?
A key element of the control-list reform effort is to clarify the items subject to control, particularly on the Department of State’s U.S. Munitions List (USML), based on objective technical parameters. The Department of Defense led a technical review that determined the most sensitive items which warrant control on the USML and those lesser sensitive items that may be moved to the Commerce Control List (CCL), thus allowing them to be exported under Commerce’s more flexible legal authorities to Allies and many multilateral export control regime partners. In this regard, this prioritization of controls is part of the “fewer items.”
Second, the increased clarity of the regulations will impose a “higher wall” by reducing ambiguity that can be exploited. Items subject to controls will be specifically enumerated to the greatest extent possible or for those controlled items not enumerated on any control list, the Administration’s definition of the term “specially designed,” to be used in both the USML and CCL, will provide clear guidance by defining the term for the first time. Application of strict USML licensing requirements on enumerated and “specially designed” items in the rebuilt USML categories imposes a “higher wall” on these most sensitive items.
Additionally, working collaboratively with Congress, the Administration has standardized the criminal and civil penalties for violations of either the State or Commerce regulations to the same maximum. Criminal penalties include a fine of either $1 million or five times the value of the transaction (whichever is greater) and up to 20 years imprisonment, per violation. Likewise, the maximum civil fines are the same for violating either State or Commerce regulations: the greater of $1 million per violation or twice the amount of the transaction that is the basis of the violation. This parity both maintains robust controls and provides greater clarity of penalties to the public.
Further, the Administration’s addition of a new control in the CCL, in Export Control Classification Number (ECCN) 0Y521, provides the U.S. Government with the ability to quickly control any item (e.g., an emerging technology) for foreign policy reasons to address any current control gaps, similar to how USML Category XXI (Miscellaneous Articles) works. This too is a feature of the “higher walls.” Finally, military items currently on the CCL will be consolidated with those items moved from the USML to the CCL and become subject to the more stringent licensing policies for ITAR §126.1 destinations. All “specially designed” items that move from the USML to the CCL will also be precluded from export to embargoed destinations.
These changes – the tightening of the embargoes, the increased clarity in both export control lists, the parity of penalties, the definition of “specially designed” and the prioritization of controls to allow less sensitive items to be exported to certain trusted destinations without requiring a specific license -- are all aspects of the “higher walls” in both lists around the “fewer items” that remain on the USML and those on the CCL that require a specific license. These actions will enhance U.S. exporter compliance with U.S. export control regulations, help focus U.S. Government licensing resources, and of particular importance, provide for the legal basis for the U.S. Government to prosecute violators using objective regulatory standards.
February 1, 2013
State Publishes a Proposed Rule for Category XVI
The State Department published a proposed rule change for USML Category XVI-Nuclear Weapons, Design and Test Equipment on January 30, 2013. This rule is now available online and is distinct from the forthcoming Department of Energy proposed rule change to 10 CFR Part 810, which governs technologies and assistance for the design, production and use of facilities that make peaceful nuclear materials. The Department of State will accept comments to the Category XVI rule for a 45-day window, which will close on March 18, 2013.
State and Commerce Publish Proposed Rules for Category IV
On January 31, the State and Commerce Departments published a pair of proposed rules for the transition of certain items currently subject to the USML’s Category IV-Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombes and Mines. These rules are now available for viewing online, and there will be a 45-day public comment period that will close on March 18, 2013.
January 30, 2013
2013 NDAA Includes Authorization for Satellite Export Control Reform
On January 2, 2013, President Obama signed into law the National Defense Authorization Act (NDAA) for FY 2013, which restores flexible authority to the President to tailor controls on the export of satellites and related items appropriately to the risk of diversion to unauthorized end-users or end-uses. This action marks a significant milestone in the President’s Export Control Reform Initiative and in the continued collaboration with Congress to modernize the nation’s export control system. Exports and reexports of all satellites, regardless of sensitivity or availability, will continue to be prohibited if destined to China, North Korea, Iran, and other countries subject to comprehensive arms or other embargoes. The new authorities are consistent with the recommendations of the Departments of Defense and State in the NDAA for FY 2010 Section 1248 report. Tailoring satellite export controls will facilitate cooperation with Allies and many multilateral export control regime partners while maintaining robust export controls as necessary to protect national security. The Administration is preparing proposed rules to request public input on the rebuilt USML Category XV that currently includes satellites and related items. Updating satellite export controls will provide the U.S. satellite industry with an opportunity to seek to restore its leadership by allowing it to compete on a more level playing field with its international competitors. This will be particularly beneficial to small- and medium-sized U.S. companies that manufacture parts and components for satellites and will bolster the industrial base to ensure it can meet current and future U.S. requirements.
November 29, 2012
Commerce Publishes Proposed Rule to Make the Commerce Control List Clearer
On November 29, the U.S. Department of Commerce published a proposed rule to clarify certain sections of the Commerce Control List to remedy any unnecessary compliance burdens caused by rules that are overly complex, outmoded, inconsistent, or overlapping as a result of accretion. There will be a 60-day window for submitting comments that will close on January 29.
November 29, 2012
The Defense Trade Advisory Group Holds Meeting to Discuss Export Control-Related Issues
On November 29, the Defense Trade Advisory Group (DTAG) held a meeting in Washington to present and discuss the findings from three of its recent studies regarding trade in defense industrial goods. The first discussion laid out a list of industry priorities for export control reform, the second included a proposal for a new ITAR exemption, and a third was an examination of proposed changes to ITAR brokering rules. Assistant Secretary of State Andrew Shapiro presented keynote remarks and provided a status update for the Export Control Reform effort.
November 28, 2012
State and Commerce Publish Proposed Rules for Category XI
On November 28, the U.S. Departments of State and Commerce published proposed rules for the transition of certain items from Category XI of the U.S. Munitions List to the Commerce Control List. Category XI pertains to controls for a variety of “Military Electronics”, and there will be a 60-day window for submitting comments that will close on January 28.
November 28, 2012
Assistant Secretary of Commerce for Export Administration to Host Weekly Conference Calls on Export Control Reform
BIS Assistant Secretary Kevin Wolf will resume his series of weekly conference calls on December 12 at 2:30 pm. These calls are open to the public and will provide interested parties with a unique opportunity to develop their understanding of the improvements now being made through the Export Control Reform Initiative. For more information about participating, please refer to the notice on the BIS website.
November 5, 2012
Export Control Reform Levels the Playing Field for Small American Exporters
In addition to reducing the compliance burden for exporters, the Export Control Reform improvements will make it easier for smaller American firms to participate in foreign markets and provide after-market support to Allies who purchase U.S. systems. The Defense Department considers many parts and components of these systems to be less sensitive, so these items will be moved to the more flexible Commerce statutory authorities. This will make it easier to export to Allies, thereby enhancing interoperability. The items will remain controlled, but by prioritizing U.S. controls, the second- and third-tier suppliers who make many of these items for U.S. primes will no longer lose the after-market to foreign end-users who design-out U.S. content to avoid the reach of U.S. controls. Some items might even be eligible for a license exception. This will enhance the reliability of U.S. suppliers and will be beneficial to the health and competitiveness of the U.S. industrial base, including maintaining and expanding jobs. Most critically, these changes will ensure the vitality of the U.S. industrial base to meet future U.S. national security requirements.
For more information, please visit the ECR Library.
October 25, 2012
Export Control Reform Reduces the Compliance Burden on Small Businesses
Small businesses are a key part of the defense industrial base, yet they are confronted by unique challenges in trying to export into foreign markets. According to the Small Business Administration, small firms account for 99.7 percent of all employers, comprise 97.5 percent of all identified exporters, and account for 31 percent of export value, yet they spend 36 percent more per employee than larger firms to comply with federal regulations. Given this disparity, a key objective of the President’s Export Control Initiative is to reduce the regulatory compliance burden on small firms to maintain the health of the industrial base. Some specific steps toward this objective include:
Ultimately, these and other important changes will allow small firms to prosper, making it easier for them to comply to the benefit of U.S. national security, while also bolstering the health and competitiveness of the U.S. industrial base and helping maintain and create American jobs. For more information, please visit the ECR Library.
August 15, 2012
Public Comments on the BIS and DDTC Proposed Transition Rules Are Now Available Online
The State and Commerce Departments have published the public comments they received in response to the proposed rules for the orderly transition of items from the U.S. Munitions List (USML) to the Commerce Control List (CCL) as part of the reform effort. These comments are now being studied by the departments in preparation for publication in final and are available for public review on the State and Commerce websites, respectively.
August 14, 2012
Public Comments on the Proposed Specially Designed Rules Are Now Available Online
The State and Commerce Departments have published the public comments they received in response to the proposed change in the definition of the term “specially designed” within the context of the reform effort. These comments are now being studied by the departments for preparation for publication in final and are available for public review on the State and Commerce websites, respectively.
August 3, 2012
BIS Update 2012 Export Control Conference Held in Washington, DC
On July 17-19, the Bureau of Industry and Security hosted the “Update 2012 Conference on Export Controls and Policy”, which is an annual event for industry leaders and other interested stakeholders to learn about the current and future direction of export controls. The Export Control Reform Initiative was a key topic during the event, and several key participants in the process were present to discuss different aspects of the process. Speeches from the event by the following participants can be accessed online:
July 26, 2012
The Defense Trade Advisory Group Holds Semi-Annual Meeting to Discuss Export Control-Related Issues
On July 26, the Defense Trade Advisory Group (DTAG) held a meeting in Washington to present and discuss the findings from two of its recent studies regarding trade in defense industrial goods. The first discussion focused on two competing legislative proposals to restore the authority of the President to determine the proper regulatory jurisdiction of commercial satellites, and the second was a presentation about how the ITAR might be improved to bring its guidance on transshipment requirements more into line with the challenges of current global logistics networks. Assistant Secretary of State Andrew Shapiro presented keynote remarks and discussed the importance of the Export Control Reform effort.
The speech listing for inclusion on the ECR Library page is as follows (the link goes to the same location as the one in the blog article):
July 2, 2012
Public Comments on the Proposed Rule Changes to Category V-Explosives and Energetic Materials Are Now Available Online
The State and Commerce Departments have published the public comments they received in response to the proposed changes to the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) regarding ITAR Category V-Explosives and Energetic Materials. These comments are now being studied by the departments and are available for public review on the State and Commerce websites, respectively.
July 2, 2012
Defense Secretary Panetta Discusses Export Control Reform During Remarks at the U.S. Institute of Peace
On June 28, 2012, Secretary of Defense Leon Panetta delivered the Dean Acheson Lecture at the U.S. Institute of Peace, during which he discussed the importance of Export Control Reform to the deepening of ties between the U.S. military and its foreign partners:
“Defense trade is a promising avenue for deepening security cooperation with our most capable partner nations. Our on-going work in reforming our export control system is a critical part of fostering that cooperation. Each transaction creates new opportunities for training, for exercises, for relationship building. It also supports our industrial base, with roughly one third of defense industry output supported by defense exports. This is important for American jobs and for our ability to invest in new defense capabilities for the future.
“It is clear to me that there is more that can be done to facilitate defense cooperation, with our traditional allies and our new partners alike. We are working to make U.S. government decision-making simpler, faster and more predictable for our partners. This means better anticipating their needs ahead of time, fast-tracking priority sales, and incorporating U.S. exportability requirements up front in the development process. A new Special Defense Acquisition Fund is allowing us to begin procuring long-lead, high demand items in anticipation of our partner requests. And we’ve also built Expeditionary Requirements Generation Teams that send acquisitions experts abroad to help our allies better define and better streamline their requests. And a proposed Defense Coalition Repair Fund will allow us to repair equipment in anticipation of partner requests.
“All these efforts are a priority for me, and for the Department of State. And I firmly believe that judicious sales or transfers of capabilities to responsible governments are vital in maintaining peace and deterring would-be aggressors. The security challenges of the future require us to partner, and the plan of action I’ve outlined will allow us to do so prudently – by protecting the “crown jewels” of U.S. technology while putting in place the programs and capabilities and processes to build partnership in the 21st century.
The full text of Secretary Panetta’s remarks is available on the U.S. Department of Defense website.
June 25, 2012
State and Commerce Publish Proposed Transition Rules for 600 Series Items
On June 21, the U.S. State and Commerce Departments published proposed rules to provide clear descriptions of proposed policies and procedures for the transition of items from the U.S. Munitions List (USML) to the Commerce Control List (CCL). These rules will outline a phased implementation plan for transitioning items from the USML to the CCL, and there will be a 45-day period for public comments that will close on August 6, 2012. The State Department’s USML proposed rule and the Commerce Department’s CCL proposed rule are now available for review.
June 19, 2012
State and Commerce Publish Proposed Rules to govern the use of the phrase “Specially Designed”
On June 19, the U.S. State Department and U.S. Commerce Department each published proposed rules to govern the use of the term “Specially Designed” for the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR), respectively, as part of the President’s Export Control Reform Initiative. There will be a 45-day period for public comments on each rule that will close on August 3, 2012.
June 19, 2012
Commerce to Publish Advance Notice of Proposed Rulemaking
On June 19, the U.S. Commerce Department published an advance notice of proposed rulemaking (ANPR) requesting public comments on the feasibility of positively identifying “specially designed” components on the Commerce Control List (CCL) to decrease the use of the term. There will be a 90-day period for public comments that will open on June 19 and close on September 17, 2012.
June 19, 2012
State and Commerce Publish Proposed Rules for Category IX
On June 14, The U.S. State and Commerce Departments recently published proposed rules for the transition of certain items from Category IX of the U.S. Munitions List (USML) to the Commerce Control List (CCL). Category IX items for control refer to “Military Training Equipment and Training”, and the rules were published on June 13, and there will be a 45-day period for public comments that will close on July 30, 2012. The State Department’s USML proposed rule and the Commerce Department’s CCL proposed rule are now available for review.
June 7, 2012
State and Commerce Publish Proposed Rules for Category X
The U.S. State Department and U.S. Commerce Department recently published proposed rules for the transition of certain items from Category X of the U.S. Munitions List (USML) to the Commerce Control List (CCL). Category X items for control refer to “protective personnel equipment and shelters”. The rules were published on June 7, and there will be a 45-day period for public comments that will close on July 23, 2012. The State Department’s USML proposed rule and the Commerce Department’s CCL rule are now available for review.
June 6, 2012
Focusing Resources Where They Are Most Needed
Under current export control law, all specialty nuts, bolts and screws that are used on a weapons system are controlled the same as the weapons system itself, which typically results in the requirement for an export license for each of those pieces. But that isn’t all – the manufacturers and exports of each of those exported pieces will be subjected to annual registration and fees, and a separate authorization will be needed for any end-item into which they are incorporated.
Additionally, when a U.S. company receives authorization to export defense systems to close U.S. Allies, they are required to get a subsequent license for every aspect of service, maintenance, and repair of those items. If an Ally wishes to loan, sell or transfer U.S.-controlled equipment to another country – even to another close U.S. Ally – U.S. Government approval or notification is needed. And, if an Ally manufactures its own weapons system using U.S. Munitions List (USML) components, the Ally likewise needs U.S. approval for the transfer of the Ally’s own weapon system regardless of the significance of the embedded U.S. components.
A minor component for an F-18 should not be controlled in the same manner as the F-18 itself; doing so will force the U.S. Government to continually devote resources equally to all these items to expand its licensing and enforcement capabilities to keep up as U.S. export activity grows. The Export Control Reform Initiative is about focusing on controlling those items that provide a significant military or intelligence advantage to the United States so that the U.S. Government can focus its resources on those items that truly require control. It is not a decontrol but a prioritization of controls.
May 29, 2012
The Need for Reform
The United States controls more than arms. It controls everything that feeds into a weapons system, including any specialty nut, bolt or screw that is used, and the reach of U.S. munitions control never ends until the original item is destroyed or permanently re-imported into the U.S. Consequently, there are three major reasons why Export Control Reform is so essential:
May 22, 2012
State and Commerce Publish Proposed Rules for Category XIII
The U.S. State Department and U.S. Commerce Department recently published proposed rules for the transition of certain items from Category XIII of the U.S. Munitions List (USML) to the Commerce Control List (CCL). Category XIII items for control refer to “auxiliary military equipment”, and the rules were published on May 18. There will be a 45-day period for public comments that will close on July 2, 2012. The State Department’s USML proposed rule and the Commerce Department’s CCL rule are now available for review.
May 14, 2012
State and Commerce Publish Proposed Rules for Category V
On May 2, the U.S. State Department and U.S. Commerce Department published proposed rules regarding the migration of certain items from Category V of the U.S. Munitions List (USML) to the Commerce Control List (CCL). Category V items for control refer to “explosives and energetic materials, propellants, incendiary agents, and their constituents”. These rules will be open for public comments for a 45-day period closing on June 18. The State Department’s USML proposed rule (Accessible Text) and the Commerce Department’s CCL rule (Accessible Text) are now available.
May 7, 2012
New Government Accountability Office (GAO) report regarding ECR’s Impact on Compliance Activities
In April, the Government Accountability Office (GAO) released a report entitled Export Controls – U.S. Agencies Need to Assess Control List Reform’s Impact on Compliance Activities, which evaluates how Export Control Reform will affect the U.S. Department of Commerce’s ability to conduct end-use checks on controlled items. The Executive Branch is reviewing the report and factoring it into on-going activities in the reform effort. The GAO report is now available (Accessible Text), and you can also read more about ECR and export control enforcement on the ECR Fact Sheet 6: Enforcement in the ECR Library.
March 20, 2012
ECR website revised
Welcome to the new ECR website. We’ve revised the layout of the website in order to provide better information on the reform effort. Highlights on the new website include the ECR Fact Sheet Series featured in the ECR Library page and this ECR blog. This page is designed to provide background information on ECR, including fact sheets, speeches by senior U.S. Government officials, industry recommendations for ECR, and reports delivered by the Administration to Congress. Lastly, this page contains links to Government Accountability Office reports on the current U.S. export control system.
Stay tuned for additional updates. In the meantime, you can sign up to receive regular ECR updates.
March 7, 2012
Opening of the Export Enforcement Coordination Center and the Information Triage Unit
Today the White House announced the official opening of the Export Enforcement Coordination Center (E2C2) and the Information Triage Unit (ITU), two important goals of ECR. Read more about the announcement on the White House Fact Sheet. The ITU will be an important hub for information gathering and sharing amongst licensing agencies. For more information, read the Bureau of Industry and Security (BIS) Press Release (pdf). In terms of enforcement export control regulations, the E2C2 will serve to coordinate amongst enforcement agencies. To learn more, visit the E2C2’s official website and you can read the Immigration and Customs Enforcement (ICE) Press Release (pdf) about E2C2.
March 7, 2012 - White House announces official opening of the Export Enforcement Coordination Center (E2C2) and the Information Triage Unit (ITU). Read the White House Fact Sheet and visit the E2C2 website.
February 21, 2012 - Public Comments Received: USML CAT VI/CCL Entries and USML CAT XX/CCL Entries
Public Comments Received: Department of Commerce, Bureau of Industry and Security-Retrospective Regulatory Review Under Executive Order 13563
February 2, 2012 - Comment period closes Department of Commerce, Bureau of Industry and Security, “Retrospective Regulatory Review Under Executive Order 13563”
January 27, 2012 - Reminder: Comment period for Department of Commerce, Bureau of Industry and Security, “Retrospective Regulatory Review Under Executive Order 13563” closes February 2, 2012.
Department of Commerce Publishes Proposed Rules on Controlling Vessels of War and Related Items and Submersible Vessels, Oceanographic and Associated Equipment and Related Items the President Determines No Longer Warrant Control under the United States Munitions List.
December 14 - Weekly Wednesday Export Control Reform Teleconference with Assistant Secretary Kevin Wolf, Bureau of Industry and Security
Department of Commerce Publishes Proposed Rules on Controlling Military Vehicles and Related Items and Gas Turbine Engines and Related Items the President Determines No Longer Warrant Control under the United States Munitions List.
November 9 - Export Enforcement Coordination Center (E2C2) opens. Pursuant to Executive Order 13558, the E2C2 has identified and established its management team and is working toward fulfilling the functions assigned to it by the President. Currently, the Center is utilizing existing interagency deconfliction and coordination protocols and is planning an expanded and more robust process for government-wide coordination, information sharing and public outreach.
May 16 - Department of State publishes Final Rule on amending the International Traffic in Arms Regulations for Dual Nationals and Third-Country National Employed by End-Users. Final rule goes into effect on August 15, 2011.