State and BIS Propose Rules to Revise USML Cat VII & CCL for Military Vehicles, "Tiering" on Hold, Etc.

Written comments on both proposed rules are due by January 20, 2012.

State Dept Proposed Rule

Proposed Rules Do Not Reflect Tiering

In their December 2010 advanced notices of proposed rulemaking, the State Department and BIS described the Administration’s plan to make the U.S. Munitions List and the Commodity Control List positive, tiered, and aligned so that eventually they can be combined into a single control list. While these remain the Administration’s ultimate Export Control Reform objectives, their concurrent implementation would be problematic in the near term. As a result, the Administration has decided, as an interim step, to propose and implement revisions to both the USML and the CCL that are more positive, but not yet tiered.

(See ITT's Online Archives 10121021 and 10120921 for summary of State and BIS ANPRs, respectively, on the Administration's plan to make the USML and CCL positive, tiered, and aligned, and to establish a "bright line" between the two.)

Proposed Revision of USML Category VII

The State Department's proposed rule would revise USML Category VII, covering ground vehicles, to establish a clear bright line between the USML and the CCL for the control of military ground vehicles. The proposed revision would narrow the types of ground vehicle controlled on the USML to only those that warrant control under the stringent requirements of the Arms Export Control Act (AECA). Proposed changes include:

Unarmored, unarmed military vehicles. Removal of most unarmored and unarmed military vehicles, trucks, trailers, and trains (unless “specially designed” as firing platforms for weapons above .50 caliber), and armored vehicles (either unarmed or with inoperable weapons) manufactured before 1956.

Gas turbine engines. Removal of gas turbine engines designed for ground vehicles from Category VII. Gas turbine engines for articles controlled in this category are proposed to be in USML Category XIX, which is the subject of a separate State Department proposed rule and BIS proposed rule (see future issue of ITT for summary).

Definition of ground vehicles. A definition of “ground vehicles” for purposes of the revised USML Category VII.

Positive list of generic parts. The most significant aspect of this more positive, but not yet tiered, proposed revision to this USML category is that it does not contain controls on all generic parts, components, accessories, and attachments that are "specifically designed" or modified for a defense article, regardless of their significance to maintaining a military advantage for the U.S. Rather, it contains a positive list of specific types of parts, components, accessories, and attachments that continue to warrant control on the USML. All other parts, components, accessories, and attachments will become subject to the new 600 series controls in Category 0 of the CCL as described in the BIS companion proposed rule.

Revisions to jurisdictional status. Revising the jurisdictional status of certain militarily less significant end items that do not warrant USML control (but the primary impact of this proposed rule will be with respect to current USML controls on parts, components, accessories, and attachments that no longer warrant USML control).

Proposed Definition for "Specially Designed"

For the purposes of this proposed rule, the draft definition for “specially designed” in the State Department's December 2010 ANPR should be used. The draft definition provided at that time is as follows: “For the purposes of this Subchapter, the term “specially designed” means that the end-item, equipment, accessory, attachment, system, component, or part (see ITAR 121.8) has properties that (i) distinguish it for certain predetermined purposes, (ii) are directly related to the functioning of a defense article, and (iii) are used exclusively or predominantly in or with a defense article identified on the USML.”

(BIS subsequently published on July 15, 2011, for public comment, the Administration’s proposed definition of “specially designed” that would be common to the CCL and the USML. The public provided more than 40 comments on that proposed definition on or before the September 13 deadline for comments. The Departments of State, Commerce, and Defense are now reviewing those comments and related issues, and the Departments of State and Commerce plan to publish for public comment another proposed rule on a definition of “specially designed” that would be common to the USML and the CCL. See ITT's Online Archives 11071519 for summary of the July 2011 BIS proposed rule for new definitions for "specially designed" end items, parts, etc.; the proposed rule also covers an EAR control structure to transfer less significant items from the USML to the CCL, the transfer of an initial traunche of items from USML Category VII to the CCL, etc.)

BIS Proposed Rule

Five New 600 Series ECCNs Are Reproposed

The BIS proposed rule revises and re-proposes five new "600 series" Export Control Classification Numbers (0A606, 0B606, 0C606, 0D606 and 0E606) for the CCL that were initially proposed on July 15, 2011. The revised ECCNs are the result of continued deliberations of BIS, State, and the Department of Defense, and recommendations of commenters on the July 15 proposed rule.

BIS has adopted some of the recommendations in the comments to the July 15, 2011 proposed rule and incorporated them into this reproposed rule. BIS states it will continue to consider some of those comments and will make a decision whether or not to adopt their recommendations in any final rule concerning those new ECCNs.

State proposed rule (FR 12/06/11, Public Notice 7702) available here. BIS proposed rule (FR 12/06/11, D/N 110310188-1621-02) available here.