Client Alerts

Proposed Rule May Add Confusion to Already Complex Export Control Regulations

August 09, 2011

Scott M. Flicker, Ellen Walz Holmes & Dana M. Parsons

The United States has some of the most comprehensive and robust export controls on Earth, yet many are holdovers from the Cold War era that no longer adequately address the unique national security threats of the twenty-first century. In August 2010, President Obama launched an Export Control Reform Initiative to identify reforms to the current export control system that would better protect the United States against modern threats like the proliferation of weapons of mass destruction.

An interagency task force conducting the review determined that the current regime is overly complicated, redundant, and attempts to protect too much. To address these criticisms, the Department of Commerce Bureau of Industry and Security (BIS) issued a Proposed Rule on July 15, 2011 to remove certain items from the United States Munitions List (USML) where they are administered under the stricter International Traffic in Arms Regulations (ITAR) and move them to the Commerce Control List (CCL), subject to the Export Administration Regulations (EAR). This proposal is a first step in a much bigger plan to harmonize both control regimes, to create a list based on positive technical specifications and performance and eventually to combine them into one list administered by a single agency. While the CCL has historically been less restrictive than the USML, the Proposed Rule would still impose enhanced restrictions for defense items and other articles with an inherent military nature. The goal is to provide a more flexible system of controls, providing restrictions where needed while allowing exports of defense articles to NATO and other partner nations.

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