Secretary Gates Announces Obama Administration's Plan for Export Control Reform

April 25, 2010

On April 20, 2010, Defense Secretary Gates announced “blueprints” for the Administration’s plans to reform the U.S. export control system. President Obama directed the National Economic Council in conjuction with the National Security Council to launch a broad-based interagency process for reviewing the overall U.S. export control system, including the dual-use and defense trade processes in order to consider reforms to the system to enhance the national security and economic interests of the U.S.

According to Secretary Gates, the Administrations exports reform plan consists of four key changes:

• Single export control list. A single export-control list would make it clear to U.S. companies which items require licenses for export and which do not.
• Single licensing agency.  A single licensing agency, which would have jurisdiction over both munitions and dual-use items and technologies, would streamline the review process and ensure that export decisions are consistent and made based on the real capabilities of the technology. The Administration is currently preparing options for the agency’s location, with a decision expected later in Spring 2010.
• Coordination of enforcement. The coordination of the U.S.’ currently dispersed enforcement resources by one agency would do a great deal to strengthen enforcement, particularly abroad, as well as coordination with the intelligence community.
• Unified IT infrastructure.  A single, unified information technology (IT) infrastructure would reduce the redundancies, incompatibilities, and waste of taxpayer money that the current system of multiple databases produces.

The initiative would ultimately lead to a single export licensing agency. The blueprint includes three phases of reform leading to a single enforcement coordination agency within one year, along with a single licensing agency and the combined control list described above. The first two phases consist of changes that can be made by administration, some immediately; the third phase would require legislative action.

Phase I – Immediate improvements, establish framework - Phase I will make significant and immediate improvements to the existing system and establish the framework necessary to create the new system, including making preparations for any legislative proposals. This phase will include implementing specific reform actions already in process and initiating review of new ones.

Phase II – New system based on current structure - Phase II will result in a fundamentally new U.S. export control system based on the current structure later this year.  This phase will complete deployment of specific Phase I reforms and initiate new actions contingent upon completion of Phase I items.  Congressional notification will be required to remove munitions list controls or transfer items from the munitions list to the dual-use list, and additional funding will be required both for enhanced enforcement and the IT infrastructure.

Phase III – Complete the transition to new system - Phase III completes the transition to the new U.S. export control system. Legislation would be required for this phase.