Administration Notes Delays in Export Control Reform Initiative

July 23, 2010

Recently, National Security Council official Brian Nilsson acknowledged before the Defense Trade Advisory Group that the administration would not complete the first two phases of its export control reform initiative before its August 1, 2010 target date. However, Nilsson did note that the administration was nearing completion of several “deliverables.”

For example, he said that the Departments of State, Commerce, and Treasury reached a preliminary agreement on a single licensing form. This agreement, once finalized, will help the administration transform the Defense Department’s electronic licensing system into a platform for applying for all types of export control licenses.

Additionally, Nilsson said that the administration will finish by August 1^st its test of positive control list criteria on the new U.S. Munitions List (USML) Category 7 (military land vehicles), which may have the effect of removing some items to the Commerce Control List (CCL). The positive control list criteria is being developed under a “bright line” test to differentiate which items should be controlled as munitions or as dual-use items. This involves a significant conversion of several vague terms from the current USML into specific performance parameters.

Simultaneously, the administration has been dividing the USML & CCL into three tiers, with the most sensitive technologies/munitions being paced in top tier facing the strictest controls. Nilsson noted that in combination with the positive control list criteria and “bright line test,” the tier structure would eliminate the commodity jurisdiction process fights between State, Commerce and Defense, but create new fights over commodity tier classification. He expects this problem to be resolved by an upcoming executive order outlining a new dispute settlement process.

The administration hopes to complete all three phases of its initiative, which will culminate in a single export control agency, by April 2011. However, the administration’s failure to complete the first two phases which consist almost entirely of regulatory changes not requiring Congressional action, has cast doubt among many DTAG members that the administration will be able to achieve its April 2011 goal.

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