Manufacturers: Export Control Reform is Continuous Process

By January 14, 2014Economy, Trade

The Export Control Reform Initiative marked a second major milestone last week, with the implementation of new controls for ships, submersibles, tanks, military vehicles and auxiliary military equipment. The text of the new rules was published six months ago by the Departments of State and Commerce, with a delayed effective date.

Earlier this month, the State Department published the third major final rule implementing the Export Control Reform Initiative, outlining changes to five additional USML Categories. Those revisions will take effect in June. In all, the State Department has published proposed revisions for 13 of the 19 USML Categories – building significant momentum for the initiative. An earlier tranche of revisions, impacting controls on aircraft and gas turbine engines, went into effect in October 2013.

Manufacturers have long advocated for a new approach to export controls, aimed at today’s threats rather than yesterday’s Cold War, and the NAM is pleased to see these important steps toward a modernized U.S. export control system. The changes now underway will help strengthen the industrial base, enhance national security and improve economic competitiveness. But while the Administration’s work to update the USML and the Commerce Control List (CCL) is a positive development in the President’s Export Control Reform Initiative, these modifications are really only the first step.

“With continued leadership from the White House, and from the Cabinet, the Export Control Reform Initiative will achieve the broad objectives laid out nearly five years ago,” said Paulson Manufacturing Corporation President and NAM Board Member Roy Paulson. “Many of the infrastructure improvements required to implement these reforms have been completed, yet there is so much more to do. If the initiative halts here, the system won’t be fundamentally better for exporters. Export Control Reform needs to be thought of as a continuous process, one that is always evolving to the needs of the stakeholders and the requirements of National Security.”

Looking ahead, the NAM has urged the Administration to take an innovative approach to identifying and addressing those unilateral export controls that are ineffective at achieving foreign policy goals and stifle U.S. competitiveness in the global economy. We also strongly support much-needed management reforms – including an effective program license framework, a truly connected IT system across licensing agencies, an efficient intra-company transfer license for trusted companies and simplified encryption controls – that would further streamline licensing and system administration. Further, addressing regulatory and statutory barriers to civil nuclear exports would further boost U.S. security and competitiveness.

In 2009, President Obama announced an Export Control Reform Initiative that was intended to fundamentally reform the U.S. export control system and rationalize U.S. export laws. As part of this process, the State Department is transferring some less sensitive items from the USML to a new section of the CCL maintained by the Commerce Department, and the agencies are adopting a number of additional regulatory changes. The Commerce Department has also produced a series of tools to help exporters, as well as new tool that will guide exporters in the use of the license exceptions. The NAM provided extensive input on the proposals and on the framework of the transition period, and we will continue to work with the Administration to ensure a smooth transition over the next few months.

Lauren Wilk

Lauren Wilk

Director of Trade Facilitation Policy at National Association of Manufacturers
Lauren Wilk is the Director of Trade Facilitation Policy for the National Association of Manufacturers (NAM). In that capacity, Lauren works with NAM member companies to develop and advocate the association’s position on export controls, sanctions, export credit and financing, international investment, trade facilitation and customs issues, export promotion and other policies related to national security and global competitiveness. She currently serves on the steering committee of the Coalition for Security and Competitiveness and the Exporters for Ex-Im Coalition.
Lauren Wilk

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