Changes to Vehicles, Subs, Miscellaneous Items and Electronics Next Export Control Reform Step
Final rules on U.S. Munitions List edits to military vehicles, submarines, military vessels and miscellaneous items -- plus another proposed rule on changes to electronics -- will be the next steps in the Obama administration’s Export Control Reform initiative, Assistant Secretary for Export Administration Kevin Wolf said June 4.
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The final rules, now in the Congressional notification stage, should be published around the second week of July, said Wolf, speaking at the President’s Export Council Subcommittee on Export Administration meeting. For military vehicles, Category VII of the USML, “basically well north of 90 percent of all parts and components of military vehicles [will be] moving to the jurisdiction of Commerce,” he said. Category XX, which covers submarines, will see very few changes, Wolf said.
The final rules will have a 180-day delayed effective date, per industry requests. The delay will give companies time to adjust their procedures, and the government time to “train and educate” on the USML-Commerce Control List edits. Wolf said the Bureau of Industry and Security is already “doing a significant amount of training and outreach, resources permitting.” He pointed to recent BIS webinars, a sequester-friendly way to spread the message about export reform.
By the end of June, the BIS plans to publish another proposed rule on USML Category XI, military and space electronics. BIS finished sifting through all published comments about six weeks ago, Wolf said, and through industry comments discovered the way the rule was written incorrectly described an item as “commercial use.” For more on the initial proposed Category XI rule, see 12112616.
The next set of rules to appear later this summer will be a combination of Categories IV, V, IX, X and XVI. Those categories include missiles, explosives, protective personal equipment, training equipment and nuclear weapons. For missile items and explosives, Categories IV and V, there will be limited changes, Wolf said. BIS is mainly “aligning our controls more cleanly with the missile technology control regime.” Edits to Category XVI, nuclear weapons, will resolve jurisdictional issues between the Departments of State and Energy, Wolf said.
BIS is still working “interagency” on the proposed rule to Category XII -- fire control, optical and guidance equipment -- and Category XIV, which covers toxicological agents and radiological equipment. “All of [the rules] will be out sometime this year,” Wolf said. “I don’t have any promises on dates.”
Other BIS rules, though not related to Export Control Reform, will also be forthcoming this summer. Wolf said a final rule on Wassenaar Arrangement changes should be published in the Federal Register before the end of June. BIS is also working on a “gaggle of [Export Administration Regulations] specific changes,” including a “clean-up rule” that won’t involve substantive changes to the CCL, Wolf said. The rule will target “inconsistencies, structure and definitions and word choice that have crept in over the years,” he said. The rule could be published as early as July.
Proposed Rule on USML-CCL Changes to Satellites Praised at Meeting
Wolf encouraged industry to submit comments on the most recent Export Control Reform rules, which cover spacecraft and related items (see 13052318). BIS and State published the rules May 24. PECSEA members affected by the proposed rule praised its changes at the June 4 meeting, during a presentation on satellite control reforms. The reforms are greatly needed, since the current practice of all satellites being controlled through the USML can “prevent us, as a U.S. satellite manufacturer, from bidding on a level playing field,” said subcommittee member Steve O’Neil, who works in Boeing’s commercial satellite manufacturing division.
The satellite industry is growing and gaining new customers in new countries, O’Neil said. “What I’m seeing more and more as the entrants come into the marketplace is less tolerance for [International Traffic in Arms Regulations], less tolerance for trying to figure out the complexity here.” Placing satellite controls solely under ITAR has even led to a drop in business for U.S. satellite companies, he said. "There's a direct correlation between the requirements placed on the satellites and the reduction in the U.S. manufacturing market share." O'Neil commended the proposed changes, including the expansion of license exceptions that he said will help recognize the value of the entire satellite supply chain.