In August 2009, President Obama directed the National Security Council and the National Economic Council to conduct a review of the U.S. export control system. The resulting reform effort is taking place in three phases. The U.S. Government is currently in the second phase of implementing Export Control Reform (ECR) through the publication of various proposed and final rules. After several years of intensive inter-agency consultations, the Departments of State and Commerce published in April 2013 final rules in the Federal Register codifying the first changes.
These final rules include the revision of U.S. Munitions List (USML) Category VIII (Aircraft), the creation of USML Category XIX (Gas Turbine Engines) and the companion Commerce Control List (CCL) entries in the newly established “600-series” Export Control Classification Numbers (ECCNs). The final definitions of specially designed for the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR) were also provided in these final rules as well as transition guidance for industry. The effective date for the first rules is October 15, 2013.
The Departments of State and Commerce published the second implementation rules on July 8, 2013 with an effective date of January 6, 2014. The second rules include the revision of USML Category VI (Ships and Vessels), USML Category VII (Ground Vehicles), USML Category XIII (Materials and Miscellaneous Articles) and USML Category XX (Submersible Vessels) and the companion CCL entries. The state rule also added definitions for levels of maintenance to ITAR §120.38.
The staff of Goforth Trade Advisors LLC (GTA) were central players in advancing the President’s ECR initiative with input into all facets of the effort. The GTA staff was intimately involved in the review of public comments received on the proposed revisions to the U.S. Munitions List and the companion changes to the CCL. Additionally, they worked extensively on the formulation of the definition of “specially designed" which is a critical element to the revision of the U.S. Munitions List and the success of the ECR effort. The transition guidance provided to industry on the licensing policies pre and post-transition was drafted by GTA staff in collaboration with colleagues at the Departments of State and Commerce.
In the training sessions identified below, the GTA staff will provide invaluable insight into the intent of the U.S. Government and best practices for companies in complying with the new regulations.
U.S. Munitions List Revisions: Overview of the new U.S. Munitions List structure; applying the “order of review” and on-line tool from the Department of Commerce; analysis of completed U.S. Munitions List categories and the companion CCL entries.
Specially Designed: Overview of both the ITAR and EAR definitions; identifying when the definition applies; how to apply the definition; on-line tool from the Department of Commerce.
Transition Guidance: Overview of the transition guidance; reviewing current and pending authorizations to determine necessary actions; applicability of issued Commodity Jurisdiction determinations; assessing requirements for items already exported.
Dual Licensing and the “x” Paragraph: Reviewing current authorizations; identifying the U.S. Munitions List “x” paragraph is applicable and how to use it; identifying when dual licensing is required and how to effectively obtain required authorizations.
“600-series”: Understanding the structure of an ECCN; locating items which have transitioned to CCL control; determining licensing requirements; identifying the appropriate licensing mechanism for a transaction.
In addition to providing training on particular ECR topics, the GTA staff will work with customers to design company-unique action plans to implement the new regulations. These action plans will include: