'Specially Designed'

A senior Commerce Department official has publicly acknowledged that the continued use of the catch-all phrase "specially designed" for military use to control items on the Commerce Control List (CCL) and the U.S. Munitions List (USML), albeit with a new definition, falls short of a key goal of the export control reform initiative. As Inside U.S. Trade reports:

That goal has been to create a "positive" control list that identifies items by their technical performance capabilities and their characteristics.

"The use of 'specially designed' is . . . not in keeping with our ultimate goal of creating truly positive, objective lists of controlled items," Assistant Secretary of Commerce for Export Administration Kevin Wolf said in his July 17 opening speech to the export control Update Conference hosted by the Bureau of Industry and Security (BIS). "We want to control items of concern, not intentions."

But the term is by its nature a catch-all control and the new definition of "specially designed" proposed in June does to some extent still rely on design intent in two out of five elements of the proposed rule. The rule is structured to capture items as "specially designed" in a broad definition and then creates five carve-outs that release them.

The first carve-out to rely on design intent would allow someone to prove through documentation that a part or component that was or is being developed for both a commercial and military purpose should be exempt even if it is being used exclusively in a military end item. The second carve-out would provide an exemption if it can be proven that an item has been originally developed for a general, commercial purpose even though it is used almost exclusively in a military application.

Wolf said it has been difficult to come up with a good definition for specially designed because the term is used in so many different ways throughout the export control system. For example, it is used as a control and a decontrol parameter, he said.

It also applies to parts and components with particular characteristics but also to parts and components designed for another item regardless of performance characteristics. It is a term that is applied to end items, raw materials, systems and software, Wolf said.

On top of that, the term is used in four different multilateral export control regimes with different applications, including the Wassenaar Arrangement This makes it difficult to completely eliminate the undesirable term even in the midst of a major overhaul of the export control system, he said.

But Wolf emphasized that BIS is taking a further step toward its ultimate goal of doing away with the term "specially designed" for military use. He pointed to the advanced notice of proposed rulemaking BIS issued last month to collect comments on the feasibility of enumerating components on the CCL that are now captured by the "specially designed" term.

Comments on that notice are due by Sept. 17, and should address whether it would be possible to enumerate items subject to controls outside the new 600 series of Export Control Classification Numbers (ECCNs) by their technical parameters or characteristics. The 600 series ECCNs are being created to hold most items that will be transferred from the revised USML categories as part of the reform effort.