Export Controls

Don't assume that the Obama administration's ongoing review of export control policy will lead to the easing of licensing requirements, according to a State Department official.

National security considerations will dominate the review, Robert Kovac, the head of the State Department’s Directorate of Defense Trade Controls (DDTC), emphasized last week. As Inside U.S. Trade reported:

“Take this to the bank -- the litmus on this ((interagency review)) is going to be U.S. national security,” Kovac said in a Sept. 30 session at the Update Conference on Export Controls and Policy. “There are going to be all kinds of other factors, but the one that is going to be paramount is going to be national security.”

He also made the point that the outcome of the review is not necessarily a decision to decontrol items now subject to licensing.

According to Kovac, there are no “preconceived conclusions” about the review that would influence officials’ findings. Therefore, export control requirements could be tightened or they could be loosened, he said.

The administration’s review is divided into short- and medium-term steps meant to clear out languishing export control decisions as well as a fundamental review to shape an export control system for the future, according to Acting Deputy Assistant Commerce Secretary for Export Administration Matthew Borman.

Borman participated with Kovac and other administration officials in the opening panel of the conference organized by the Bureau of Industry and Security (BIS).

Kovac downplayed the extent to which a fundamental change in U.S. export controls could be achieved administratively. “We keep tinkering around the edges, ((but)) fundamental change will probably require legislation,” he said.

Kovac said he was “very excited” about the export control review because today’s commercial realities of global research and development or international defense production are not reflected in the laws underlying U.S. export controls.

Those laws are the Arms Export Control Act governing munitions exports and the expired Export Administration Act that governs dual-use exports.

As an example of how defense production realities have overtaken the statutory framework of the Arms Export Control Act, Kovac cited the Joint Strike Fighter. He said it is being co-designed and developed by nine countries and involves 52 major companies, not counting the subcontractors.

Kovac said he hoped that the administration could get Congress on board with whatever recommendations the review will produce. “We are going to involve Congress in this ((review)) early and often,” Kovac said.

He said an important part of the administration’s review will be the review of the export control lists and deciding what should remain controlled or taken off the list.

Representing the Defense Department at the panel was Anthony Aldwell of the Defense Technology Security Administration (DTSA). He emphasized that Defense Secretary Robert Gates is “fully pledged” to examining export controls in a “very comprehensive” way in an effort to improve the current system.

The review, which he said was still at the “very early stages,” will be the number one priority for DTSA this fall, he said.