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American Shipper

?Aggressive? steps, without tripping

æAggressiveÆ steps, without tripping

      The Obama administration maintains an 'aggressive' export control reform agenda, and plans to have much of the new regulatory framework in place by the end of the year, a senior official told members of the Aerospace Industries Association in an insightful speech on June 30.

      The reform, announced by Defense Secretary Robert Gates on April 20, marks the biggest change in more than 30 years to how the federal government keeps certain U.S.-made technologies out of the hands of overseas adversaries.

      'The bottom line is that the world has changed dramatically,' said. Gen. James L. Jones, national security advisor. 'Procurement patterns have changed, markets have changed, the threats we face are different, and the economy is global.

      'What has not changed, however, is the basic structure and premise for our export control process,' he said.

   Jones explained that over the years the United States has attempted to respond to changes in export controls with a 'patchwork' of fixes. 'As a result, our system today is made up of a number of antiquated systems cobbled together over time, leaving us with a seriously fractured overall approach to export controls,' he said.

      The administration will conduct its export control reform in three phases.

      In the first phase, which is underway, the government has developed criteria to form a tiered control list structure, with the 'crown jewels' and weapons of mass destruction in the top tier and then 'cascading down the tiers as the technology or product cycle matures,' Jones said.

      He said the tiered process would help the government prioritize how it processes license applications. 'All items are not equal, yet our current licensing processes are very much like a production line, each license application processed in the order it is received,' Jones said.

      Today, export controls come under a cumbersome system of multiple agency jurisdictions, mainly governed by the Commerce Department's Commerce Control List and the State Department's Munitions List.

      By the second phase of the reform, the administration would further align the agency systems by putting in place licensing policies tied to the new control list tiers. 'By the end of Phase II, we will see a complete transition to standardized licensing systems based on the two mirrored control lists that will result in a more timely, transparent and predictable processes,' Jones said.

      Also, as part of the first two phases, the administration has established the framework for a so-called Export Enforcement Fusion Center, a permanent standing office staffed by employees from all of the export enforcement entities and intelligence community.

      'This is another area in which considerable work has been done, mapping out the terms of reference that are being used to prepare an executive order to formally create the center,' Jones said.

      The second phase will include the emergence of a single information technology platform. The administration has already decided to migrate the Commerce and State departments' licensing processes to the Defense Department's USXPorts system.

      'As a first step, the State Department's munitions licensing organization is already in the process of migrating,' Jones said. 'Follow-on steps will migrate Commerce and Treasury and other departments and agencies that participate in the interagency review of license applications.

      'We are also standing up a review to build a single interface for exporters to use, rather than the two different electronic systems maintained by Commerce and State, and the paper process used by Treasury,' he said. 'Our IT experts are already at work with our licensing team, which is developing the single application platform.'

      The third and final phase of this reform will require some legislative action. In this phase, the administration's goals are:

      ' Merge the two 'mirrored lists' into one.

      ' Merge the licensing agencies into a single, harmonized agency.

      ' Combine the Commerce Department's Export Enforcement office and ICE's Counter-Proliferation Program into a single dedicated export enforcement unit.

      ' Deploy an enterprise-wide IT system to track an export from the filing of the license application until it leaves the port.

      The administration has already made some key decisions on its vision for the third phase.

      'For the Single Licensing Agency, as we're calling it, the administration supports the creation of an independent entity, governed by a board of directors comprised of the Cabinet officials of the current departments with export control responsibilities, which reports to the president. We anticipate that leadership of the SLA would be nominated by the president, with the advice and consent of the Senate,' Jones said.

      So far, the industry remains upbeat about the Obama administration maintaining its momentum toward export control reform and keeping it informed of its progress.

      'This is a welcome sign to the trade community that export control reform is real, and something we may actually see in the next few months,' said Marianne Rowden, president and chief executive officer for the Washington-based American Association of Exporters and Importers, in a statement. 'President Obama has a clear understanding of the connection between national security, innovation and job creation by tackling the technical regulatory impediments to exporting goods from the United States.'

      While the Obama administration basks in its accomplishments to rid the nation's exporters of Cold War-era regulatory controls, it must ensure that the institutional experience, both in terms of licensing and enforcement, is not lost in transition.

      Across the various agencies in charge of export enforcement ' namely the Commerce Department's Bureau of Industry and Security, the Directorate of Defense Trade Controls at the State Department, and the Defense Department's Defense Technology Security Administration ' are many licensing officers and agents who are highly experienced in their work. There are also numerous personnel within these agencies nearing retirement.

      What the administration cannot afford is a wholesale exodus of their most qualified staff as it moves toward a single licensing agency directly reporting to the White House and melds enforcement within the Department of Homeland Security's Immigration and Customs Enforcement.

      The loss of knowledgeable government personnel would only serve to trip the reform's momentum. ' Chris Gillis

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