Administration Close to Key Regulatory Changes in Export Control Overhaul

June 8, 2010

Last week, a senior administration official reported that they were in close to achieving an interagency agreement on key regulatory steps for implementing the first two phases of the administration’s export control reform initiative. The first two phases of the initiative, unveiled by Defense Secretary Gates in April, focus on immediate changes the administration can make and establishing a framework for a new export control system.

According to the official, the departments of State, Commerce and Treasury are close to an agreement on a decision tree that will be used to determine which items are vital for the U.S. to control. Once an agreement is in place, the Departments can begin reviewing the Commerce Control List (CCL) and the U.S. Munitions List (USML) to ultimately decide which items may be decontrolled.

Additionally, administration officials will be working from this decision tree to develop a positive control list that specially identifies products requiring licenses. Although the current CCL and USML have positive sections, they also consist of paragraphs describing attributes of covered items using vague language.

The departments also appear to be close to agreement on a single application form for exports of controlled items. Currently, Commerce’s Bureau of Industry and Security (BIS), State’s Directorate of Defense Trade Controls (PMDDTC), and Treasury’s Office of Foreign Assets Control (OFAC) have separate application procedures. A unified application process should cut down the amount of paperwork required by exporters to apply for a license.

The administration has also decided that the Defense Department’s IT system will be used as a single point of entry for all export control license applications, enabling officials from multiple departments to view all current license applications. According to sources, the Defense Department system had several advantages over the other departments’, including being the most modern and well funded.

Once these steps are complete, the administration plans to begin developing legislation for creating a single export licensing agency. It has been speculated that administration may begin putting legislation together as early as August, but officials have maintained that there is no firm timeline in place for completing these steps.