Export Control Reform has reached Category XI: Good News and Bad News

on Tuesday, 29 July 2014. Posted in Export Control Reform

 

Export Control Reform has reached Category XI:

Good News and Bad News

 

by Francis Sutschek

Senior Consultant

 

The good news. For those of us, like myself, who have lived our professional life in the USML, welcome to the Commerce Department’ BIS and the world of ECCNs. Any of your products that were Category XI and are in use on current US war-fighter equipment like the Joint Strike Fighter, Bradley Fighting Vehicles, or US Navy ships of the line, are most likely still Category XI. Prior Category XI products for equipment no longer used by US forces, but still in use by other countries either friendly to us or at least not seen as hostile to us, may have transitioned to BIS / EAR control from DDTC / ITAR control. So what do we do? We suggest you read the ITAR parts 120.2, 120.3, 120.4, 120.6, 120.9 and 120.10 and see if your product still fits. The key words are found in 120.3 (b), determining whether your product give our side an edge. If not, even if still in use by US forces, it may no longer be ITAR-controlled.

If you are unsure, but leaning toward EAR control request a CJ from DDTC   Do include a proposed ECCN for your product, but do not include a potential USML Category. In your CJ submittal, include a white paper explaining why you feel your product, which may provide the user with an essential capability, does not give our forces a military advantage. In the paper do explain why the function of your product is essential, Include history of the product with civil equivalent examples if any, and stress the general availability of the basic technology and functionality your product provides. I suggest you do not have your marketing people write this paper as they will tend to make it sound like the answer to someone’s dreams, while you are trying to sell DDTC on the fact that this is everyday capability that you just provide with good value to the end user.

An example would be military aviation radio Communications and Navigation (Com-Nav) equipment. Military aviation Com-Nav operates in the UHF Radio Frequency (RF) band. There is also Civil aviation Com-Nav which operates in the VHF RF band. The reason is at the end of WW II, it was clear to all that he RF spectrum needed to be managed as demand for its use was growing with all the technology developed during the war, so military aviation was allocate a block of UHF frequencies and civil aviation a block of VHF frequencies. A purely arbitrary decision, but if you are building a radio for a military aircraft it will be UHF. Also at the end of WW II the need to control air traffic was recognized, so agencies such as US FAA developed the “Airways Air Route Structure” which defined overland flight paths from one ground radio aid to navigation to another. Civil aviation developed VOR in the VHF frequencies for that purpose in the 1940s and the military developed TACAN in the UHF frequencies for the same function in the 1950s so they could comply with FAA requirements. The technical functional requirements for both are in the public domain and there is no military significance for either system. If a functional equivalent is available to all from a foreign source also specify that including the source.

Now the bad news. The three agencies most involved here, DDTC, BIS, and DTSA, have been given no additional resources to effect this change. Category XI is by nature highly technical, so technical review is a big and time consuming item. DDTC by its own admission has no technical expertise and relies on DTSA. DTSA as part of DoD is farming some of the workload out to other Pentagon agencies. The DoD people doing many of the reviews will be military officers with engineering degrees, but who have not been working as engineers for several years, they have been flying aircraft, driving tanks, or running ships. They understand the math and physics, but do not know what is leading edge vs what you can buy at Radio Shack.   Put an extraordinary workload on top of that and you are at risk to have your product over controlled. That is an item that should transition to EAR control may not make the jump from ITAR, or if it does, it will fall into the new 600 series of ECCNs which are item regarded as still significant to national security, when in fact they should be seen as normal commercial goods available world- wide. This is the significance of a well written, clear, brief and to the point white paper. I suggest you include a technical point of contact with people skills for any questions the reviewer may have.

 

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