First steps toward implementation of U.S. export control reform announced

On December 9, 2010, President Obama announced proposed changes to the U.S. export control system and requested public comments. The administration’s goal is to streamline the export process, update export controls to account for the global availability of currently regulated items, institute new licensing mechanisms, seek and apply input from manufacturers, and focus limited government resources on sensitive items, i.e., those items and technology that are significant to U.S. national security. The proposed changes would establish new export control criteria; create a new export license exception for dual use items, i.e., items that can be used for both commercial and military use; and make other changes to transform the export control system to be more efficient, transparent, and effective. The announcement is part of the administration’s Export Control Reform (ECR) Initiative that is intended to improve national security, strengthen the industrial base, and increase the competitiveness of America’s manufacturers.

IPC members worldwide can benefit by the proposed changes that will update the U.S. export control system to current global conditions and assist U.S. companies’ ability to compete internationally. By eliminating cumbersome regulations, the changes may enable foreign customers to more easily purchase products or designs currently regulated by U.S. export controls directly from U.S. companies.

The government is requesting input on items controlled by the Commerce Control List (CCL) that are indigenously developed, produced or improved almost exclusively in the U.S. or in certain countries. Comments are also sought on:

· How to describe currently controlled defense articles in a “positive” manner.

· Descriptions of controlled items on the CCL.

· The global availability of CCL-listed items. This information will help the government determine the appropriate level of regulations controlling the export of these items.

· Recommendations for each defense article’s proposed placement in a tier of control. The government proposes establishing new criteria and procedures to determine whether a product is subject to export controls. The proposed criteria would create three tiers of export controls based on an article’s significance to U.S. national security and availability.

· Creation of a new dual-use export control license exemption. A proposed new license exception for certain dual-use items would allow exportation of those items to 37 countries that are members of the four multilateral export control partners and other partners that also are members of the North Atlantic Treaty Organization (NATO). The new license exemption is projected to authorize exports, re-exports, and transfers to destinations that pose little risk of unauthorized uses. According to the proposed rule, the dual-use license exemption would allow the U.S. government to focus export controls on the most critical national security priorities.

· Identification of any current defense article that does not meet any of the tiered export control criteria

Information on the proposed changes and how to submit comments can be viewed at www.export.gov/ecr.

IPC members are encouraged to review the proposed changes carefully and share their thoughts, concerns, and recommendations with IPC staff or directly to the government. To get involved, contact Ron Chamrin, IPC manager of government relations, at ronchamrin@ipc.org or +1 703-522-3964. For more information about IPC’s efforts on U.S. export control, visit www.ipc.org/export-reform.

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