Magazine article National Defense

Officials Can See End of the Long Road to Export Reform

Magazine article National Defense

Officials Can See End of the Long Road to Export Reform

Article excerpt

For the past two years, federal officials have been methodically revising the lists of U.S. defense technologies that require special export licenses.

The goal has been to remove goods or services that no longer pose a threat to U.S. forces if they should fall into the wrong hands, and to maintain safeguards for sensitive items that do.

Former Secretary of Defense Robert Gates proposed overhauling the system at the outset of the Obama administration. He eschewed the overly broad, catch-all system that was both failing to keep sensitive technologies from making their way to overseas rivals and putting restrictions on those that were no longer cutting edge, which in turn made U.S. industries less competitive.

"We were wasting our time and resources tracking technologies you could buy at Radio Shack," he said in an April 2010 speech.

Since then, officials at the two main departments tasked with granting export licenses, State and Commerce, have been deliberately moving through the munitions list category by category in order to "rationalize" the system.

Items and services in the munitions list fall under the International Traffic in Arms Regulation regime, and therefore require the approval of the State Department's directorate of defense trade controls to export. Technologies that give U.S. forces an edge in battle are denied licenses.

Running afoul of the law and shipping such sensitive technologies to foreign countries can result in stiff fines for companies.

The Defense Department advises the two departments but doesn't ultimately decide what can and can't be exported, or to whom.

The reform process has sought to turn the broadly defined munitions lists into specific ones, said Kevin Wolf, assistant secretary of commerce for export administration at the Commerce Department.

There has been "incredible transparency and openness and interaction with the public," during the process, Wolf said at the Satellite 2014 conference in Washington, D.C.

The two departments, with input from Defense and other interested federal agencies, have been rolling out the revised lists since last year. First up were ships, military vehicles and engines. The new rules and definitions of what items were still sensitive and what could be moved to the less restrictive Export Administration Regulations regime--administered by Commerce--were finalized in early January.

To reach that point, the agencies first came together with their proposals for what should be on or off the list. After those were released, then came the public comment period.

This is where the fine details were hashed out, Wolf and other officials speaking at the conference said.

"For these new regulations to make sense, it does require as much input as possible from industry," he added.

Officials from all the interested federal agencies and departments gathered in one room and put each public comment up on a screen. Each point was discussed until a consensus was reached on whether it had merit or not, Wolf said.

After the public comment period was finished, the final rules were released. A six-month grace period where industry had time to absorb and adjust to the new regulations followed.

Export licenses that have already been granted are grand-fathered in for two years, or until the license reaches its natural expiration date.

The missiles and explosives category is currently in this six-month phase. There were few changes there, Wolf said. "Those are not the kinds of things that have widespread commercial applications."

Next will be the highly anticipated new rules on satellites and spacecraft.

This category is a special case because in 1999 Congress passed a law placing all rockets, spacecraft and their components on the more restrictive munitions list.

It was reacting to charges that satellite manufacturer Space Systems/Loral had been passing on technical information and other sensitive components to China, when that country was launching U. …

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