Export Controls Reform Initiative
At the direction of the President, the Federal export control agencies (Bureau of Industry and Security (BIS), Directorate of Defense Trade Control (DDTC) and Office of Foreign Assets Control (OFAC)) have undertaken an effort to substantively revise and modernize the US export system. Although reform is certainly needed, it does mean a period of even greater uncertainy for exporters, including institutions of higher education, until the new regulations and associated guidance documents are finalized. The Office of Export Controls is monitoring the reform efforts and will be preparing institutional responses to proposed changes likely to impact university activities.
UVA faculty, staff and students interested in or concerned about proposed changes to US export controls are encouraged to provide comments to the Office of Export Control at firstname.lastname@example.org or x2-5725.
Four primary goals have been identified for the reform initiative:
- Single Control List (merger of the Commerce Control List (CCL) of the Export Administration Regulations (EAR) with the US Muntions List (USML) of the International Traffic in Arms Regulations (ITAR))
- Single Licensing Agency (at minimum, consolidation of BIS, DDTC and OFAC)
- Single Primary Enforcement Coordination Agency
- Single IT System
While legislation will be required to ultimately consolidate the control lists and create a single licensing agency, the administration is taking steps to prepare for this eventuality including revising the current control lists to ensure that they are positive lists that contain a bright light to facilitate exporters' ability to make jurisdictional determinations and assign technology to the appropriate part of the relevant list. By structurally aligning the lists the administration hopes to be able to easily merge them when and if authorized to do so by the legislature. The administration has also directed the agencies to move toward a single IT system, including a single application form, to better coordinate the interagency review process and provide greater transparency within the government. Brian Nilsson announced at the July 2010 plenary session (minutes) of the Defense Trade Advisory Group (DTAG) that the single IT licensing system would be DoD's USXports. The agencies are moving to this system gradually but this will be largely invisible to the exporting community since each agency will maintain its own interface system (SNAP-R and D-Trade) for the present.
The administration has created a Consolidated Screening List to make it easier for exporters to check for restricted, denied or sanctioned parties in their transactions. The Consolidated Screening List includes the following agency specific lists:
- Denied Persons List (BIS)
- Unverified List (BIS)
- Entity List (BIS)
- Nonproliferation Sanctions (Department of State, Bureau of International Security and Non-proliferation)
- AECA Debarred List (DDTC)
- Specially Designated Nationals List (OFAC)
Note: UVA personnel are advised to continue using Visual Compliance (a web-based screening tool offered by eCustoms) for all restricted party screenings. For more information on Visual Compliance or to register for a user account, contact the Office of Export Controls at email@example.com or x2-5725.
To date, the bulk of the effort expended on export control reform has been on attempting to align and update the current control lists (USML and CCL). This has been done through the issuance of paired Federal Register notices of proposed rule-making from DDTC and BIS associated with individual US Munitions List categories. The following USML categories have been issued as of 12/28/2012: V-XI, XIII, XIX and XX; at this time none of these proposed changes have been finalized. The remaining categories are expected to be released for public content in early 2013.
The Export Enforcement Coordination Center (E2C2) was created by Presidential Executive Order 13558 on 11/9/2010. The E2C2 will be administered by the Department of Homeland Security and coordinate enforcement activities among the Departments of State, Treasury, Defense, Commerce, Energy, and Homeland Security as well as the Office of the Director of National Intelligence and the other executive branch departments, agencies, or offices designated by the President.
BIS and DDTC have also made progress toward adopting common terms and agreeing to consistent definitions and interpretations. However, as of 12/28/2012 only the definition of "specially designed" has been released for public comment via Federal Register notice. DDTC also released a proposed definition of "equipment" as part of the Federal Register notice proposing changes to Category USML XI and to update the "defense service" definition and provide additional clarifying definitions. BIS has released several proposed rules dealing with the transition of items from the USML to the CCL, created a new license exception (Strategic Trade Authorization), and issued a variety of proposed changes and clarifications following its Retrospective Regulatory Review.