BIS Updates Materials Processing Advisory Committee on Export Reform, Etc.
At the August 25, 2010 meeting of the Bureau of Industry and Security’s Materials Processing Technical Advisory Committee (MPTAC), BIS officials gave updates on the Administration’s export control reform efforts, recent Wassenaar regime-based activities, etc.
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Highlights include:
Update on the Administration’s Export Reform Progress
BIS officials provided the following update on the Administration’s progress on export reform:
Phases 1 and 2 have resulted in BIS and DDTC rules. Phases 1 and 2 of the Administration’s export reform efforts have resulted in two rulemakings so far: (i) BIS’ interim final rule on encryption, and (ii) the State Department’s proposed ITAR exemption for inter-company transfer to dual or third-country nationals.
(See ITT’s Online Archives or 06/25/10 and 06/19/10 news, 10062539 and 10062951, for BP summaries of BIS’ interim final rule on encryption. See ITT’s Online Archives or 08/11/10 news, 10081120, for BP summary of DDTC's proposed ITAR exemption for intra-company transfers to dual or third-country nationals.)
Phase 2 is ongoing. The Administration is currently in the second phase of its alignment of the U.S. Munitions List (USML) and Commerce Control List (CCL). Phase 21 involves rewriting the current USML and CCL export controls into positive controls2 that will lend themselves to eventually being combined.
Phase 2 began with a rewrite of USML Category 7 (Tanks and Military Vehicles). A working draft of USML Category 7 rewritten as a positive control has been completed. A second USML category is currently being examined and will be rewritten as a positive control. Although a BIS official declined to name the USML category under revision, an attendee at the August 12, 2010 Materials Technical Advisory Committee meeting suggested that USML Category 6 (Vessels of War and Special Naval Equipment) was likely to be the next to be written as a positive control.
Identification of licensing policy. Also underway is the Administration’s effort to identify the licensing policies that would apply to a new three-tiered export control structure. (As currently envisioned, Tier 1 would be comprised of items that are the most sensitive, Tier 2 would be comprised of items that are less sensitive, and Tier 3 would be comprised of items that the least sensitive.) One official noted that the placement of an item in a particular tier would likely be influenced by its foreign availability.
Work on single IT system continues. Work continues on the development of a single information technology system. (One of the goals of the Administration’s export reform is to implement a single, enterprise-wide IT system for both licensing and enforcement.)
Legislative strategy under consideration. The Administration continues to consider legislation to implement Phase 3 of its export reform. The official noted that the legislative strategy will be developed by the White House.
(The Administration has previously announced that Phase 3, which will complete the transition to the new U.S. export control system by implement a single licensing agency, consolidate certain enforcement activities into a primary enforcement coordination agency, and implement a single IT system, will require legislation to implement.)
Update on Wassenaar Regime-Related Activities
The update on the Wassenaar Regime-related activities included:
Two issues resolved. During the spring 2010 Wassenaar sessions, two relatively simple issues were resolved. Agreement was reached to clarify the language in (i) the note in 2B1 (2B001 in the EAR) and (ii) paragraph (g) in 2B5 (2B005 in the EAR).
According to BIS, the language modifying 2B001 in the EAR is not expected to be changed until early 2011. The timing of implementation of the 2B005 change was not discussed.
Bearing, used machine tool and other proposals still under consideration. The Wassenaar Regime currently has several proposals under consideration, including:
Antifriction bearings. A proposal regarding the decontrol of antifriction bearings (AFBs) is still under Wassenaar consideration.
Used machine tools. A proposal regarding used machine tools is currently under consideration. According to a BIS official, some countries think that the treatment of used machine tools should be codified -- to indicate that used machine tools are considered the same as new machine tools.
1The Administration’s export reform process is divided into three phases. Phase I consists of immediate improvements within the existing system. Phase 2 consists of the development of a new U.S. export control system based on current structure. Phase 3 is the complete the transition to new export control system (Phase 3 would require the enactment of legislation).
2In recent remarks, National Security Advisor General Jones noted that the CCL is generally a positive list, which means that an item is only controlled if it is on the list. However, the USML is not considered a positive list as it is based on broad general descriptions, which results in capturing every nut, bolt, and screw of a munitions item.