State, Commerce Publish Final ECR Rules to Amend Category XI, Makes Additional Aircraft Changes
The State and Commerce Departments published concurrent final rules that transfer certain use items from the U.S. Munitions List (USML) Category XI (Military Electronics) to the Commerce Control List (CCL). The final rules also make changes to controls for wing-folding systems in Category VIII, and make conforming changes to Categories VIII and XIX of the USML. With these final rules, the Obama administration has published revisions to 15 of the 21 USML categories as part of its Export Control Reform initiative.
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State oversees the USML in accordance with the International Traffic in Arms Regulations, whereas Commerce oversees the CCL in accordance with the Export Administration Regulations. The agencies unveiled both final rules on June 30 (see 14063028). The rules enter the Federal Register on July 1 and take effect on Dec. 30.
State and Commerce changed some language and content of the final rules based on industry comments. The agencies released the most recent Category XI proposal in July 2013, following a proposal in November 2012 (see 13072421). The final rules do not impact USML defense article imports that are permanently regulated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, State said in its rule (here).
The State rule aims to more precisely describe the items that continue to warrant control on the USML, including electronic sensor systems or equipment for non-acoustic antisubmarine warfare or mine warfare, certain test sets specially designed for testing defense articles, and certain direction finding equipment specially designed for articles in select paragraphs of USML Categories IV (Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, and Mines) and VIII (Aircraft). The rule also puts into effect many conforming changes to the format of USML Category IV, along with other clarifications. State aims to periodically review Category IV to ensure the controls are appropriate, but “the exact details of such a reevaluation process have yet to be articulated,” said State.
The State rule amends Category VIII to ensure wing folding systems for commercial aircraft are not controlled as defense articles. The amendment to Category VIII takes effect on Aug. 15. Software and technology for the “development” of certain wing folding systems for aircraft powered by gas turbine engines will be brought onto the CCL, the Commerce rule says (here). The U.S. is also seeking to have such software and technology added to the dual-use list of the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (Wassenaar Arrangement). The State and Commerce final rules also remove certain paragraphs in USML Categories VIII and XIX (Gas Turbine Engines and Associated Equipment) because they are superseded by the provisions in Category XI.
The Commerce rule adds to the CCL military electronics, technology and software for certain wing folding systems, certain superconducting and cryogenic equipment, and related items that the Obama administration determines no longer warrant USML control. The addition of software and technology for certain wing folding systems to the CCL takes effect on July 1. Commerce is also amending the CCL to apply “missile technology” justification for control only to items on CCL that are also on the Missile Technology Control Regime Annex. The cryogenic and superconductive equipment transferred to the CCL through these concurrent rules are currently now controlled by “catch all” provisions in USML Categories VI (Vessels of War and Special Naval Equipment), VII (Tanks and Military Vehicles), VIII (Aircraft), and XV (Spacecraft Systems and Associated Equipment).
Among dozens of revisions to the Commerce final rule in response to comments on the two previous proposals for this rule, the final rule changed the provisions in the proposals to create a “more complex, tailored regulatory structure” by incorporating a type of a single .y list so that less significant controls are imposed on the less significant items listed. Commerce expects most of the items that will be appropriate for .y treatment are electronic in nature.
(Federal Register 07/01/14)