Export Controls

The Commerce Department is announcing long-awaited reforms to the federal export control system at a conference this week, something applauded by the Aerospace Industries Association in a statement released this morning:

"We are very pleased by the progress the administration is making in reviewing the U.S. Munitions List," said AIA President and CEO Marion C. Blakey. "The restructured list shows great promise in assigning the appropriate level of protection to technology exports across all levels of risk." 

In particular, the completed review of Category VII of the USML -- Tanks and Military Vehicles -- shows that about 74 percent of the 12,000 items licensed last year could have been safely processed under the less restrictive Commerce Control List. This indicates substantial potential savings in time and compliance costs to U.S. exporters in the future, with enormous benefits for our military and closest allies.

"The clarification and eventual consolidation of the Munitions and Commerce Control lists will have a dramatic impact on small- and medium-sized companies," Blakey said. "These companies rarely have the resources to ensure compliance with the current export control regime. Simplifying the system offers them the opportunity to be more competitive in the international marketplace."

The president's initiatives also include consolidating licensing policies, export enforcement and information technology systems to make the export control licensing system more efficient.

"These initiatives will greatly improve our national security," Blakey said. "Enhanced interoperability with friends and allies will increase our ability to defend our common interests, and better controls for truly sensitive items will help keep them out of the hands of our adversaries."

The current system was established during the Cold War, when many key war-fighting technologies were developed first by the United States and primarily by the government, White House National Security Adviser James Jones writes in an op-ed in today's Wall Street Journal. "Today, our military is more dependent on technology initially developed by private companies for commercial purposes. It is therefore critical to our national security that our export control system enhances, not undermines, the competitiveness of U.S. industry," he adds. Furthermore:

. . . The current system is the product of layers upon layers of regulations adopted over the last few decades, with very little distinction between relatively low-tech and widely available items and the most advanced proprietary technology. Going forward, our goal is to focus our efforts on the most critical technologies and items needed to defend ourselves against current and anticipated threats, and to place more emphasis on protecting them effectively.

The foundation of our new system will ultimately include a single control list that distinguishes in tiers between the most sensitive items and technologies and everything else; a single licensing policy to be applied across all agencies; a center to better coordinate the many agencies involved in export-control enforcement; and a single IT system to make sure decisions are fully informed.

The development of a single, tiered, positive control list will allow us to closely and efficiently scrutinize the export of our most sensitive items and more effectively deny exports to those who mean to do us harm.

At the same time, such a system will allow the export of other items under less restrictive conditions, helping to ensure that the U.S. government can move quickly to respond to the needs of allies and coalition partners. The current system often makes it difficult for allies and partners to have the key items necessary for today's operations. We can do better. For example, if we decide to share a weapons system with our partners, we shouldn't require them to seek a license for every spare part.