Monthly Archives: September 2017

Export Control Reform Moving Along: A Report from DTAG

The Defense Trade Advisory Group (DTAG), an advisory group of defense trade representatives, held a public meeting this month to discuss policies, regulations, and technical issues in defense trade.  Here are some of the highlights:

  • Export Control Reform has driven a 55% reduction in licensing volume since 2013 for the State Department’s Directorate of Defense Trade Controls (DDTC).
  • DDTC is still working to move USML Categories I, II, & III (firearms, larger guns, and ammunition) to the CCL in the next year.  These categories currently represent around 30% of DDTC license applications, so the move would drive another significant reduction in their licensing volume.  One source of delay is Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” which directs agencies to repeal two existing regulations for each new significant regulation.  The new Commerce Department rules would be considered new regulations, requiring additional offsetting repeals of regulations.  The State Department operates under an exception for “regulations issued with respect to a military, national security, or foreign affairs function of the United States.”
  • The State Department will also consider revisions to the definition of defense services, U.S. persons abroad, and other definitions.
  • The State Department is considering whether UAVs should remain in Category I of the MTCR (Missile Technology Control Regime) Annex, as opposed to less-sensitive Category II, is also under review and will be discussed at the October MTCR plenary.
  • The State Department is working on revisions to the UK & Australia Treaty implementation regulations.  Both treaties have helped to decrease licensing volume, but improvements can be made.
  • An interagency group involving the Departments of State and Defense is working on a rewrite of the ITAR.  There has not been a wholesale rewrite of the ITAR since 1984.  Overall, they are seeking to restructure for gaps and inconsistencies, add definitions, shorten the ITAR where possible, consider incorporation of guidance documents, and lead to a format that is conducive to a single control list (an end goal of Export Control Reform).
  • In IT modernization, DDTC is currently on track for a December roll-out of a single case management system, to be followed by a single license form.

The DTAG is expected to meet again next spring.

(None of the information is intended to be authoritative official or professional legal advice. Consult your own legal counsel or compliance specialists before taking actions based upon this blog or other unofficial sources.)

State Department Amends Category XI(b) to Continue Current Text

The State Department’s Directorate of Defense Trade Controls (DDTC) published an amendment to USML Category XI(b) (82 FR 41172).  The amendment continues the current text as follows:

*(b) Electronic systems, equipment or software, not elsewhere enumerated in this subchapter, specially designed for intelligence purposes that collect, survey, monitor, or exploit, or analyze and produce information from, the electromagnetic spectrum (regardless of transmission medium), or for counteracting such activities.

This text was scheduled to be replaced on August 30, 2017, but with the amendment the replacement will be delayed until August 30, 2018.  At that time, unless otherwise amended, Category XI(b) will read:

*(b) Electronic systems or equipment, not elsewhere enumerated in this subchapter, specially designed for intelligence purposes that collect, survey, monitor, or exploit the electromagnetic spectrum (regardless of transmission medium), or for counteracting such activities.

The change now scheduled for 2018 removes “software” as well as the capability to analyze and produce information from the electromagnetic spectrum.

The current language is meant to maintain control of “certain intelligence-analytics software” until a long-term solution is developed.  The rule gives the government additional time “to review USML Category XI in full and publish proposed and final rules.”

(None of the information is intended to be authoritative official or professional legal advice. Consult your own legal counsel or compliance specialists before taking actions based upon this blog or other unofficial sources.)