On April 16, 2013, the U.S. Department of State (“DOS”) and the U.S. Department of Commerce (“DOC”) published final rules in the Federal Register implementing export control reforms under the Obama Administration’s Export Control Reform (“ECR”) initiative. These final rules, which will go into effect October 15, 2013, mark the first changes to items from the U.S. Munitions List (“USML”) of the International Traffic in Arms Regulations (“ITAR”) that may shift to the Commerce Control List (“CCL”) of the Export Administration Regulations (“EAR”).
1. Amendments to the USML and the CCL
Revisions to USML Category VIII (Aircraft), Category XVII (Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated), Category XXI (Miscellaneous Articles) and Category XIX (Gas Turbine Engines and Associated Equipment) go into effect on October 15, 2013. The changes will affect the classification of items that fall under any of these categories, thereby reshaping their export requirements.
These changes are just the beginning of the ECR initiative, and many more amendments to the USML and CCL will be finalized in the near future. Other upcoming changes that may affect the categories of the USML include:
– Category IV (Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines);
– Category V (Explosives, Propellants, Incendiary Agents and Their Constituents);
– Category VI (Vessels of War and Special Naval Equipment);
– Category VII (Tanks and Military Vehicles);
– Category XIII (Auxiliary Military Equipment);
– Category IX (Military Training Equipment);
– Category X (Protective Personnel Equipment);
– Category XI (Military Electronics);
– Category XV (Spacecraft Systems and Associated Equipment);
– Category XVI (Nuclear Weapons Design and Test Equipment); and
– Category XX (Submersible Vessels, Oceanographic and Associated Equipment)
2. The Major Reforms to USML Categories VIII and XIX
The foundation of the ECR reform is to relocate jurisdiction of less-sensitive military items that are currently controlled by the ITAR to the EAR. First, the final rules will amend Category VIII by narrowing its scope. Certain items will be removed from Category VIII and will become either subject to the CCL or to Category XIX of the USML. Category XIX, which will be created by the reform and added to the USML, will control certain military gas turbine engines under the ITAR.
3. The Creation of the CCL 600 Series
Military items, and most “specially designed” parts and components for such items deemed to be no longer controlled by the USML, will shift to the CCL under the newly-created 600 Series of Export Control Classification Numbers (“ECCNs”). The 600 Series ECCNs are to be included in each CCL category. Items falling under the 600 Series will be presumed to have a military end-use and will generally require a license, unless an exception is applicable.