State, BIS Propose Rules to Revise USML Cat IX & CCL for Military Training Equipment, 'Tiering' on Hold, Etc.

Written comments on both proposed rules are due by July 30.

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 eventually they can be combined into a single control list. State said these remain the Administration’s ultimate Export Control Reform objectives, but their concurrent implementation would be problematic in the near term. As a result, the Administration 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 IX

The State Department's proposed rule would revise USML Category IX, covering military training equipment, to more accurately describe the articles within the category in order to establish a clear bright line between the USML and the CCL. The proposed revision would change the title of the category, remove broad catchalls (replacing them with a listing of specific materials that warrant ITAR control caught by current catchalls), move certain items to the CCL, and remove controls on all generic parts, components, accessories, and attachments. Proposed changes include:

Title reflects move of training services. The title of Category IX would be changed to “Military Training Equipment”, removing the phrase “and Training” from the title to indicate that it covers training equipment only. State said training on a defense article would be a defense service covered under the category in which the defense article is enumerated.

Removal of catchall categories. State’s proposed rule would replace broad catchall categories for training equipment and simulation devices with lists of specific articles. For example, paragraph (a) of Category IX currently reads “training equipment specially designed, modified, configured or adapted for military purposes, including but not limited to weapons system trainers, radar trainers, gunnery training devices…,” etc. State’s proposed revision would instead list the specific articles covered under Category IX.

State said that, in conjunction with its proposed list of specific simulation devices at paragraph (b), it would also move radar target generators to Category XI(a) and infrared scene generators to Category XII(c).

Tooling and production equipment. “Tooling and equipment specifically designed or modified for the production of articles controlled by this category,” currently controlled at paragraph (c) of Category IX, would be moved to the CCL in proposed ECCN 0B614.

Parts, accessories, etc. State’s proposed revision does not contain any controls on all generic parts, components, accessories, and attachments (currently captured in paragraph (d)) that are in any way specifically designed or modified for a defense article. Instead, State said these items are to be subject to the new 600 series controls in category 0 of the CCL. Parts, components, accessories, or attachments of a simulator that are common to the simulated system or end-item are to be controlled under the same USML Category or CCL ECCN as the parts, components, accessories, and attachments of the simulated system or end-item.

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 proposed rule should be used, said State. 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 by the September 13 deadline. State and the Department of 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, which is currently under review by the Office of Management and Budget. 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 tranche of items from USML Category VII to the CCL, etc.)

BIS Proposed Rule

Proposed Revisions to the CCL

BIS’ proposed rule describes how military training equipment and related items that the President determines no longer warrant control under Category IX (Military Training Equipment and Training) of the USML would be controlled under the CCL, as follows:

Four new 600 series ECCNs. The BIS proposed rule would create four new “600 series” Export Control Classification Numbers (0A614, 0B614, 0D614, and 0E614) for the CCL that the President determines no longer warrant control under USML Category IX. All such items, except for those in ECCNs 0Y614.y would be controlled for national security (NS1), regional stability (RS1), and anti-terrorism (AT1) reasons.

Items controlled under ECCNs 0A614. & 0B614, 0D614.y, and 0E614.y, which would control specific parts, components, and accessories and attachments that are specially designed for relevant commodities, software, or technology, respectively, or USML Category IX, would be controlled for only AT1 reasons.

ECCNs 0Y614 would also contain a paragraph y.99 that would control any item that (i) has been determined, in an applicable commodity jurisdiction determination issued by State to be subject to the EAR; and (ii) would otherwise be controlled elsewhere under one of the Category 0 “600 series” ECCNS, because, for example, the item was “specially designed for military use.

Proposed availability of STA for 0A614 and 0B614. BIS said this proposed rule would allow the use of the Strategic Trade Authorization license exception for end items classified under 0A614 and 0B614.

State proposed rule (FR Pub 06/13/12) available here. BIS proposed rule (FR Pub 06/13/12) available here.