Export Reforms Update

Realizing that the current export control systems were not effective or efficient, the government has taken action to create a better system. In April, Defense Secretary Gates unveiled the plans to simply the export process by consolidating export functions. These changes included combining the CCL and USML, creating a single licensing agency to have jurisdiction over defense and dual-use items, creating a single agency to enforce export controls and implementing a new information technology system.

In Washington, D.C. this week, the Bureau of Industry & Security is holding a conference – Update 2010 Export Controls in Transition. It should be no surprise to see export reform as a key topic for this conference.

President Obama presented opening remarks concerning export reform via video. Similar to the information presented in April, the President reiterated the commitment to a single control list, a single set of licensing policies and a single information technology system. Although much of the reform requires new statutory authority approval by Congress, work is underway to put these processes in place. Slightly different from the initial announcement of a single agency to enforce export controls, the President announced the creation of the Export Enforcement Coordination Center to coordinate and strengthen enforcement activities and eliminate gaps and duplication between the relevant agencies. This leaves the question, will there be one enforcement agency or multiple enforcement agencies operating under the new EECC? From the comments in April, it sounded like one agency, but the use of the "coordination" language may mean something different is in store.

Commerce Secretary Gary Locke focused on the benefits of the new system, such as placing more focus on the high-risk dual-use technologies posing the highest risk to the U.S. and less scrutiny on an expanded list of items that carry little or no risk. Locke noted that reforming the licensing system will free up resources, such as enforcement agents who can focus on the on interdicting the high-risk exports. The main goal of the new initiative is to allow U.S. companies to be more competitive by reducing some of the time consuming government processes while allowing the government to focus on enforcement to keep America safe.

Stay tuned for more information on the progress of export reform!

It's Time For A Change - Export Reforms

Just when the Wizard figured out when to consult the BIS and the DDTC along with the differences between the CCL and the USML, all the rules are going to change. While some might not be happy about all of the changes, others will probably find the consolidation much easier to understand.

This week, Defense Secretary Gates unveiled plans to simplify the export process by consolidating the export functions. This proposed unification would take place in three stages to allow for regulatory changes along with the required legislative approvals and other challenges.

The proposed reform includes changes to:

1. Export Control Lists
The Commerce Control List (CCL) would be combined with the U.S. Munitions List (USML)

2.Licensing
A single licensing agency would be created to have jurisdiction over defense and dual-use items and technologies.

3. Enforcement
A single agency would be created to enforce export controls currently shared by the Commerce Department, Department of Homeland Security and the FBI.

4. Information Technology
A new I.T. system would be implemented for licensing and enforcement.

While there are numerous hurdles involved in accomplishing these goals, the outcome should produce a more efficient trade friendly agency. The trade community should continue to watch for updates. The proposed reforms will affect the way companies do business. The new export process will require changes to procedures, internal processes, training and many other activities.