State, BIS Propose Changes for Export Controls on Military Electronics; New ITAR Definition for 'Equipment'
The State Department and Bureau of Industry and Security proposed changes for export controls on military electronics in two rules set for publication in the Nov. 28 Federal Register. State’s proposed rule would amend the International Traffic in Arms Regulations (ITAR) to revise Category XI (military electronics) of the U.S. Munitions List (USML) to move jurisdiction for control of certain items to BIS, describe more precisely the articles warranting control, and provide a definition for "equipment." BIS is proposing corresponding changes to the Export Administration Regulations (EAR), as well as changes to implement Wassenaar Arrangement controls on cryogenic and superconducting equipment. Both State and BIS are accepting comments on their respective proposals until Jan. 28.
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Assistant Secretary for Export Administration Kevin Wolf has previously said development of the military electronics rule proposal was complicated because “it is second to aircraft and engines in its impact on industry.” (See ITT’s Online Archives 12071724 for summary of Wolf’s remarks at the opening of the Update 2012 Conference on Export Controls and Policy.)
State Proposes More Positive List, Move of Items to CCL, Definition of “Equipment”
State’s proposal would amend Category XI of the USML to, among other things, (1) specifically enumerate controlled items; (2) move controls on certain items to the BIS Commerce Control List (CCL); (3) harmonize ITAR controls with Wassenaar Munitions List controls; and (4) define “equipment” in the ITAR. Revised Category XI contains, with a few exceptions, a positive list of specific types of parts, components, accessories, and attachments that continue to warrant control on the USML, State said. The exceptions pertain to those parts, components, accessories, and attachments identified as “specially designed.” For the purpose of this proposed rule, reviewers should use the definition proposed on June 19, 2012, it said. (See ITT’s Online Archives 12061802 for summary of the proposed definition of “specially designed.”)
The proposed State Department rule would revise USML Category XI to more accurately describe the articles within the category, and to establish a "bright line" between the USML and the CCL for the control of these articles. Paragraphs on underwater hardware, equipment, and systems, radar systems and equipment, electronic combat equipment, and identification systems and equipment would be amended to more specifically enumerate the articles controlled therein, State said.
Paragraph (a)(6), which controls military computers, would be removed, and the articles controlled therein would be transferred to the jurisdiction of BIS under new ECCN 3A611. A paragraph is added to cover unattended ground sensors, another for electronic sensor systems for anti-submarine warfare or mine warfare, one for electronic sensor systems for concealed weapons, one for test sets "specially designed" and programmed for testing counter radio controlled improvised explosive device electronic warfare systems, and another for equipment to process or analyze Category XI defense articles.
The paragraph on electronic systems or equipment for search, reconnaissance, collection, monitoring, direction finding, display, analysis, or production of information from the electromagnetic spectrum and electronic systems or equipment that counteracts electronic surveillance) would be amended to provide consistency with Wassenaar Munitions List controls.
Identifies items common to MTCR Annex. State also proposed to identify articles common to the Missile Technology Control Regime (MTCR) Annex and the USML with the parenthetical “(MT)” at the end of each section containing such articles, State said. A separate proposed rule will address the sections in the ITAR that include MTCR definitions.
Proposes ITAR definition for “equipment.” State’s proposed definition for “equipment” in Section 121.8(h) of the ITAR is as follows: “Equipment is a combination of parts, components, accessories, attachments, firmware, or software that operate together to perform a specialized function of an end-item or a system.”
BIS Proposes New ECCNs for Military Electronics, Cryogenic Equipment
The BIS proposed rule would create new ECCNs for items moving from the USML to the CCL, as well as new ECCNs for cryogenic and superconducting equipment for military vehicles and related items. Military electronics and related test, inspection, and production equipment and software and technology, currently controlled by USML Category XI but moving from the USML to the CCL, would be controlled by new 600-series ECCNs 3A611, 3B611, 3D611, and 3E611. The proposed 3X611 series, except for 3X611.y, would be controlled for national security (NS1), regional stability (RS1), antiterrorism (AT1), and United Nations embargo (UN) reasons. ECCNs 3X611.y would only be controlled for AT1 reasons.
Analog-to-digital converters usable in missiles would be controlled by ECCN 3A101, which currently refers readers to the ITAR for analog-to-digital converters identified on the Missile Technology Control Regime Annex, rather than the new 3A611 to make it easier to identify, classify, and control such items, BIS said. ECCN 4A003 would also be amended to control for MT reasons items that meet or exceed the parameters described in ECCN 3A101.a.4.
The proposed rule would preclude use of License Exception STA (Strategic Trade Authorization) for software and technology (other than build-to-print technology for (1) Helix traveling wave tubes; (2) transmit/receive or transmit modules; (3) microwave monolithic integrated circuits; and (4) discrete radio frequency transistors that would be controlled by ECCN 3A611. For these items, software and technology are more significant than the commodities that are developed or produced from or that utilize such software or technology, BIS said.
CCL controls for cryogenic and superconducting equipment. Proposed ECCNs 9A620, 9B620, 9D620, and 9E620 would apply NS1, RS1, AT1, and UN reasons for control to cryogenic and superconducting equipment described in Category ML020 of the Wassenaar Arrangement Munitions List and to test, inspection and production equipment, software and technology for such items. BIS said it believes that such equipment is used in experimental or developmental vehicle propulsion systems that employ superconducting components and cryogenic equipment to cool those components to temperatures at which they superconduct, it said, and no trade exists in such items. But to the extent that exports do exist, the items would be subject to the license requirements of the USML Category that controls the vehicle into which the equipment would be installed, such as USML Categories VI, VII, VIII, and XV.
Corrections to existing ECCNs. Finally, the proposed rule would make corrections to ECCN 5A001, 7A006, and 7D101, and create cross-references to alert readers that computers, telecommunications equipment, as well as parts, components, accessories and attachments “specially designed” for such items, would be controlled by ECCN 3A611 if they are specially designed for military use. The new cross references would appear in CCL Categories 4, 5 (Part 1), and 6.
State proposed rule (FR Pub 11/28/12) available here.
BIS proposed rule (FR Pub 11/28/12) available here.