President Signs Package of Export Control Directives

The following are highlights of fact sheets issued by the Bureau of Industry and Security and State Department which address the steps they are directed to take as a result of the President's directives.

BIS Directed to Take Steps to Enhance Focus of Dual-Use Export Control System

According to a BIS fact sheet, in order to enhance the focus of the dual-use export control system, the President has directed steps be taken on the following:

Dual use controls will focus on foreign end-users (including VEUs). The dual-use export control system will increasingly focus on foreign end-users of U.S. high technology products. The focus on foreign end-users includes the Validated End User (VEU) program for reliable foreign companies and imposing additional scrutiny of exports to foreign parties with a record of activities contrary to U.S. foreign policy and national security interests through expansion of the Commerce Department's Entity List.

(See ITT's Online Archives or 06/28/07 news, 07062815, for BP summary which highlighted BIS' final rule on Authorization VEU. See ITT's Online Archives or 10/03/07 news, 07100330, for BP summary on India's eligibility for Authorization VEU.)

Reassessment of export controls to maintain competitiveness. The U.S. needs to ensure that export controls are constantly reassessed to ensure that the most sensitive items are controlled to sustain U.S. economic competitiveness and innovation. The focus on U.S. competitiveness includes developing a regular process for systematic review of the Commerce Control List, revised controls on intra-company transfers, revised controls on encryption products, and a review of reexport controls.

Publication of advisory opinions, etc. U.S. exporters need sufficient information to support U.S. security and competitiveness goals. The focus on transparency includes publication of advisory opinions on the Commerce Department's Web site, as well as lists of foreign parties warranting higher scrutiny.

State Directed to Improve Defense Equipment, Services, Data Export Licensing

The State Department has issued a press release stating that the package of export reforms required by the President's directives will improve the manner in which the State Department licenses the export of defense equipment, services and technical data, enabling the U.S. Government to respond more expeditiously to the military equipment needs of U.S. friends, allies, and particularly coalition partners.

According to the State Department, the President's directives mandates the commitment of additional financial and other resources, as well as procedural reforms, that will expedite the processing of export license applications for items controlled by the U.S. Munitions List. In addition, the State Department notes that license processing times will be reduced as a result of the President's directives.

Export licensing, dispute resolution, and enforcement actions. According to a State Department press release, the specific actions directed by the President include:

o Additional financial resources and intelligence support will be made available for the timely adjudication of defense trade licenses.

o Guidelines will be issued that require a decision by the U.S. Government on defense trade export license applications within 60 days, absent a strong reason for additional time, such as a requirement for Congressional notification. Initial efforts in this regard have resulted in a nearly 50% reduction since April 2007 in the number of export license applications pending with the State Department.

o The electronic licensing system will be upgraded to permit the submission of all types of defense trade licenses and to enable all agencies to access the same electronic information.

o The Secretary of State will update U.S. controls on exports involving dual and third country nationals from NATO and other allied countries.

o A formal interagency dispute mechanism will be created to allow for timely resolution of licensing jurisdiction issues involving the Departments of State and Commerce under the Commodity Jurisdiction (CJ) process. The National Security Council will also undertake a review to make sure the CJ process is efficient and timely.

o A multi-agency working group will be established to improve procedures for conducting export enforcement investigations.

White House statement on U.S. Export Control Reform Directives (dated 01/22/08) available at http://www.bis.doc.gov/pdf/us_export_control_reform_directives.pdf.

BIS Fact Sheet on Dual-Use Export Control Initiative http://www.bis.doc.gov/pdf/nspd_fact_sheet_1-16-2008.pdf.

State Department fact sheet (No. 2008/044, dated 01/22/08) available at http://www.state.gov/r/pa/prs/ps/2008/jan/99562.htm.