Yes, They Are Serious

Written by: George Reed, GTM Governance

For those who have been in the “export compliance world” for a long period of time, a strange phenomenon has been unfolding over the last few years: Export Control Reform. “ECR”, as it has been labeled, has been in the trade news during the Obama administration and featured at each Commerce Department Annual Update Conference. It has been the topic of weekly industry briefings hosted by the Bureau of Industry and Security. This regulatory reform initiative was justifiably greeted with a certain degree of skepticism, especially at the outset. After all, there was a decades-long history of dividing the U.S. export control world into two very distinct camps: International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR). On one side, there was the State Department Directorate of Defense Trade Controls(DDTC), closely linked to the Defense Technology Security Administration( DTSA), dealing with military and space. On the other side there was the Commerce Department Bureau of Industry and Security (BIS) regulating dual-use commercial commodities. These two separate camps even extended into the export compliance community, often having industry compliance managers who were experts in navigating the ITAR environment or the domain of the EAR, but not equally conversant in both tongues.

For decades, the Munitions List was very different from the Commerce Control List (CCL). It was brief and described commodities and technology at a high level; less specific, inclusive in its control language, broad in scope whereas the CCL was much lengthier, providing detailed technical descriptions, key parameters and extensive notes to guide the reader. The ITAR was relatively short, and required much interpretation. In comparison, the EAR was clearer, lengthy and very detailed. Years ago, no one would have dreamed that the CCL would include purely military items once found on the Munitions List. Yet, with the advent of reform, this cultural divide has been diminishing.

At a recent Bureau of Industry and Security (BIS) Annual Update Conference, in November 2015, a status report on ECR activity was presented, as it has in recent years. Interagency work on revising the Munitions List moves closer to completion. The majority of Munitions List categories have already been updated and made more specific. The industry is getting used to the idea of “600-series” less-sensitive military commodities finding their place on the CCL. Export Compliance managers have been gradually getting used to the idea that they cannot abide in the ITAR camp exclusively, and must learn the language of the EAR. Interacting with BIS as well as DDTC has become a part of work life, even if it is not equally comfortable. In Government, the reform initiative has brought these two camps, ITAR and EAR, towards greater cooperation in finding middle ground in lieu of coexistence. DDTC, DTSA and BIS appear together at public forums with greater frequency. When observed by long-term export compliance managers, it still seems out of the norm. We remember the long-standing tradition.

This time around, in November, the conversation at the BIS Conference went beyond revamping the two control lists. It moved into dialog around creating one single export licensing organization, using one portal for electronic submissions from exporters and one set of application templates. Efforts to agree on common definitions for key terms in both the ITAR and EAR will be addressed in the near term. Beyond this, we have finally heard mention of the idea of collaborating upon creation of one singular set of U.S. export regulations. This would be the crowning touch upon ECR. Yes, this is real, and it looks to be possible. They are serious!

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