Transportation and Related Equipment TAC Says STA Rule out Soon, China's Patent Process a Threat
The Bureau of Industry and Security held a partially open Transportation and Related Equipment Technical Advisory Committee meeting on February 10, 2011. The agenda for the open session included a review of the status of the composite working group, a presentation from fiber manufacturers association, and an update on regime activities.
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This Part I of a multipart series of summaries of highlights from the meeting and covers details on the review status of the Commerce Department's two December 2010 proposed rules on export control reform. See future issues of ITT for additional topics covered.
(In December 2010, issued a proposed rule to add a new License Exception STA to allow exports, reexports and transfers (in-country) of specified items to destinations that pose little risk of unauthorized use of those items, subject to certain notification and statement requirements.
BIS also issued an advanced notice of proposed rulemaking (ANPR) seeking comments on how the descriptions of items controlled on the Commerce Control List (CCL) could be clearer, positive, and "tiered," in a manner consistent with the control criteria of the export control reform effort. The comment period for these notices closed on February 7, 2011. See ITT's Online Archives or 12/09/10 and 12/09/10 news, 10120921 and 10120914, for BP summaries.)
BIS is Hopeful for a Final Rule to be Published in the Next Couple of Months
BIS stated that over 100 comments were received on the Commerce Department's December License Exceptions STA proposed rule and its ANPR to make the CCL positive and tiered. All comments will be available on the BIS website. BIS is hopeful that in the next couple of months it will have a final rule out that incorporates all the comments and other government thoughts, but there is no strict timeline for when this will happen.
BIS is trying to get the final rule out on tiering, and larger edits to the CCL throughout the first half of 2011, but its immediate focus is on the License Exceptions STA rulemaking.
Proposed Revisions to Each USML Category Will be Issued During 2011
BIS notes that most of the work being done by the Defense Department is on the USML. The USML list review will be coming out throughout 2011 with proposed revisions to each category. The biggest work to be done is on the USML, and working with services to see what items should be controlled. BIS stated that writing the list in a clear positive way is a more difficult task than had been anticipated.
BIS States the Biggest Obstacle to Export Reform is New Members in Congress
BIS stated that consulting with Congress is a big variable to how export reform plays out. BIS is uncertain how the new staff and new members in Congress will receive export reform. Despite this uncertainty, BIS notes that it is still optimistic, about its ultimate dealings with Congress as export reform is not a partisan issue. The largest hurdle to passing export reform is likely to be education for the members on what exactly is that is being proposed.
BIS Discussing How Items Moved from USML to CCL Would be Controlled
Section 38(f) of the Arms Export Control Act requires that any changes to the USML, such as the movement of something that is a defense article to another control list, requires a notification from the House Committee on Foreign Affairs. Part of that notification is a requirement to include a description of how the items once moved from the USML to the CCL would be controlled.
BIS has not yet published a plan that would describe how things would be controlled when they move from the USML to the CCL, and is still working and discussing these issues with the Hill. When the State Department will admit a Section 38(f) notification is unsure, because it is a function of Hill consideration and more largely, the completion of the USML categories. BIS stated that a Section 38(f) notification would be admitted as soon as the USML revision was complete. In the meantime, BIS is informally working on educating members on the Hill about these issues.
Committee Expressed Concerns on Chinese Indigenous Innovation
The Committee expressed concerns over China's indigenous innovation strategy and the fact that 2/3 of the patents issued in China are design patents. It was suggested that Chinese procedures for obtaining patents only involve a description and no examination.
It was stated that if companies are not in China protecting their intellectual property or patents applications, their products may be threatened.