Reminder: Comments on State ANPR, Proposed Rule on Tiered USML, Cat VII due Feb 8

Comments on the proposed rule and ANPR are due by February 8, 2011.

List Review, Revision is Phase II of Administration’s Export Control Reform Effort

The ANPR (i) sought public comment on revisions to the U.S. Munitions List that would make it a “positive list” of controlled defense articles, (ii) requested that the public “tier” defense articles based on the Administration’s three-tier control criteria, and (iii) requested the public identify those current defense articles that the public believes do not fall within the scope of any of the criteria’s tiers.

In the ANPR, the Directorate of Defense Trade Controls noted that the review and revision of the USML and the Commerce Control List (CCL) are part of Phase II of the Administration’s export control reform effort. The purpose of the control list review effort is to enhance national security by reviewing and revising the USML and CCL so that they (i) are “tiered” consistent with the Administration’s criteria; (ii) create a “bright line” between the USML and CCL to clarify jurisdictional determinations; and (iii) are structurally “aligned” so that they can eventually be combined into a single control list.

In order to accomplish these three tasks simultaneously, the USML and, to a lesser degree, the CCL must be revised so that they are aligned into “positive lists.”

(A “positive list” is one that describes controlled items using objective criteria, rather than broad, open-ended, subjective, or design intent-based criteria.)

USML Category VII Should Be Guide for Providing Input on Other Categories

DDTC also stated in the ANPR that the Administration has already begun reviewing and revising the USML and the public should use the proposed revised USML Category VII as a guide for the level and type of detail it is seeking to develop in the remaining USML categories (other than Category XVII (Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated) and Category XXI (Miscellaneous Articles).)

Steps and Guidelines for USML, CCL Review and Revision

In the ANPR, the following steps and the guidelines were listed that the Administration has developed to prepare proposed amendments to the USML and the CCL so that they are, with rare exceptions, aligned “positive lists” that do not overlap and are consistent with the tiered criteria. The guidelines are set out in ordered steps.

Step 1 - Review each USML category (and related ECCNs) separately. In order to make the USML, CCL review, revision process more manageable, USML categories (and related ECCNs) are being reviewed individually. However, the review is being done with awareness that other categories are being reviewed and could have an effect.

Step 2 - Provide input following the new proposed USML structure. The Administration is proposing to revise the structure of the USML so that it tracks the A, B, C, D, E structure of the CCL (which also tracks the Wassenaar Arrangement dual-use list structure) and also has an additional F and G to address ITAR-specific defense service and manufacturing controls. Each revised USML category is being divided into seven “Groups”:

A for “Equipment, Assemblies, and Components”;

B for “Test, Inspection, and Production Equipment”

C for “Materials”;

D for Software”;

E for “Technology”;

F for “Defense Services”; and

G for “Manufacturing and Production Authorizations.”

The public is requested to provide input in Groups A through E. Groups F and G at this stage do not require input for building the positive list. (See ANPR for definition of the above groups.)

Step 3 - Describe defense articles in a “positive” way. DDTC requests public input on how defense articles should be described, to the maximum extent possible, in a “positive” way.

Step 4 - Provide recommended tier of control for the defense articles. DDTC requests public input on screening those items the public identifies in a more “positive” way in Step 3 against the Administration’s three tier control criteria and identify the tier of control for items within each USML category and group (A, B, C, D, and E). The Administration will make the final decisions on what types of defense articles are within the scope of any of the three tiers and, thus, may or may not accept suggestions regarding how items should be tiered.

State Proposed to Categorize Cat VII Articles by 3 Tiers

In the proposed rule, the State Department proposed to revise Category VII under 22 CFR 121.1 (Tanks and Military Vehicles) to assign all controlled defense articles under this category one of the three control criteria, that is Tier 1 (T1), Tier 2 (T2), or Tier 3 (T3), which were made upon a government-wide assessment of the appropriate level of export control for each item based upon different types of destinations, end-uses, and end-users.

The scope of the three tiers is as follows:

Tier 1

Tier 1 defense articles are those that are almost exclusively available from the United States and that provide a critical military or intelligence advantage. A Tier 1 control shall apply to:

a. A weapon of mass destruction (WMD);

b. A WMD-capable unmanned delivery system;

c. A plant, facility or item specially designed for producing, processing, or using:

(i) WMDs;

(ii) special nuclear materials; or

(iii) WMD-capable unmanned delivery systems; or

d. An item almost exclusively available from the U.S. that provides a critical military or intelligence advantage.

Tier 2

Tier 2 defense articles are those that are almost exclusively available from countries that are members of the multilateral export control regimes that control such items and (i) provide a substantial military or intelligence advantage, or (ii) make a substantial contribution to the indigenous development, production, use, or enhancement of a Tier 1 or Tier 2 item.

A Tier 2 control shall apply to an item that is not in Tier 1, is almost exclusively available from Regime Partners or Adherents and:

a. Provides a substantial military or intelligence advantage; or

b. Makes a substantial contribution to the indigenous development, production, use, or enhancement of a Tier 1 or Tier 2 item.

Tier 3

Tier 3 defense articles are those that provide a significant military or intelligence advantage, or make a significant contribution to the indigenous development, production, use, or enhancement of a Tier 1, 2, or 3 item.

A Tier 3 control shall apply to an item not in Tiers 1 or 2 that:

a. Provides a significant military or intelligence advantage;

b. Makes a significant contribution to the indigenous development, production, use, or enhancement of a Tier 1, 2, or 3 item; or

c. Other items controlled for national security, foreign policy, or human rights reasons.

(See ITT’s Online Archives or 12/10/10 news, 10121021 and 10121013, for original BP summaries of the ANPR and proposed rule, respectively.

See ITT's Online Archives or 09/10/10 news, 10091011, for BP summary of minutes of its July 2010 Defense Trade Advisory Group Plenary Session, which included a task force update on this three-tier criteria.

See ITT's Online Archives or 10/28/10 news, 10102815,for BP summary of DTAG's recent draft reports on this "tiering" system for Categories VIII, XI, and Category XII.

See ITT’s Online Archives or 12/09/10 news, 10120921, for BP summary and reminder of the Bureau of Industry and Security’s ANPR requesting comments on making the CCL clear, positive, and tiered.)

(Public Notices 7257 and 7256, FR Pub 12/10/10)

The ANPR is available here.

The proposed rule is available here.