First Export Control Reform Rule Follows IPC Advocacy for PCB Enumerations

On Tuesday, April 16, the U.S. Departments of Commerce and State published rules implementing initial Export Control Reform. The rules will amend the ITAR (International Traffic in Arms Regulations) by revising USML (U.S. Munitions List)  Categories VIII (Aircraft and Related Articles), XVII (Classified Articles, Technical Data, and Defense Services Not Otherwise Enumerated), and XXI (Articles, Technical Data, and Defense Services Not Otherwise Enumerated). It will add USML Category XIX (Gas Turbines Engines and Associated Equipment). Both rules are effective October 15, 2013.                                

The State Department rule specifically identifies the continued ITAR coverage of PCBs by establishing controls for “specially designed for defense articles in this category.”  This is a significant win for IPC which has advocated for the specific enumeration of PCBs on the USML to clarify and highlight the importance of ITAR protections for PCBs in ITAR controlled defense articles.  In our January 2013 comments, IPC stated, “In order to fully protect defense electronics and the defense articles into which they are integrated, PCBs must be controlled in the same manner as the defense electronics for which they are designed.”

The State Department rule states that PCBs “specially designed” (see definition of this term in this rule) for articles in USML Category XIX, as well as for articles in all other USML categories, are controlled in USML Category XI and their related designs or digital data are controlled as technical data, per ITAR § 120.10. The State Department rule notes that PCBs are to be enumerated in the revised USML Category XI. In the meantime, USML Category VIII and Category XIX contain a temporary enumeration of PCBs.

The State Department’s Initial Implementation Rule FRN is here, and the State Department’s press release is here. Additional provisions of the rule include definitions for the terms “specially designed” and “subject to the EAR” and will create a new licensing procedure for the export of items subject to the EAR (Export Administration Regulations)  that are to be exported with defense articles.

In addition to adding a new control structure for items that no longer warrant control on the USML, the rule creates new “600 series” ECCNs to control the first items moving from the USML to the CCL: aircraft and gas turbine engines, related parts, components, accessories, attachments, software, and technology.

The Commerce Department’s Federal Register Notice implementing the initial Export Control Reform changes is available here. This rule is being published in conjunction with the State Department’s rule so that upon the effective date of both rules, the USML and CCL and corresponding regulatory structures will be complementary.

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