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BIS chief says U.S. export control reform must be ongoing

In the final months of the Obama administration, officials at the Commerce Department’s Bureau of Industry and Security said they remain as busy as ever on the reform of the nation’s export control system.

   In the final months of the Obama administration, officials at the Commerce Department’s Bureau of Industry and Security (BIS) said they remain as busy as ever on the reform of the nation’s export control system.
   President Obama mandated in August 2009 that the mostly Cold War-era U.S. export controls, which are administered by the Commerce, State and Defense departments, be updated to reflect current national security threats and economic realities.
   A hallmark of this effort has been the in-depth review by the administration of the State Department’s U.S. Munitions List (USML), which is part of the International Traffic in Arms Regulations (ITAR), and the shift of less sensitive components and technologies, including commercial satellites, from that list to the Commerce Control List (CCL).
   With the reform’s changes so far, the United States now has much better “interoperability” between federal agencies in charge of export oversight, as well as the country’s NATO and other allies, and reduced the licensing burden for the U.S. export industry, Eric Hirschhorn, Commerce’s undersecretary for industry and security, told attendees at the BIS Update conference in Washington Monday.
   This summer, Commerce and State published the so-called “definitions” rule, which harmonized definitions for key regulatory export terms found in both the Export Administration Regulations (EAR) and ITAR, such as “export” and “reexport,” among others.
   Hirschhorn said a key to the export control reform initiative is that it will remain ongoing, even after the Obama administration departs. The rules should be “regularly revisited in the future” by both the agencies and export industry, he added.
   For example, as a result of comments received from a March 2015 notice of inquiry, Hirschhorn noted BIS and the State’s Directorate of Defense Trade Controls (DDTC) in February published proposed revisions to USML Categories VII (military aircraft) and XIX (military engines). He explained that revisiting those two categories was the result of continued changes in technology and the need to further clarify the original rulemaking’s language for transferring certain items from those USML categories to the CCL. Hirschhorn has previously stated that both BIS and DDTC plan to issue similar notices of inquiry for other revised USML categories after they have been in effect for 18 to 24 months.
   However, Hirschhorn warned the reform doesn’t mean an easing of enforcement against those who violate the export control regulations. “Without strong enforcement, people that comply with the rules are put at a disadvantage by those who flout the rules,” he said.
   A significant goal for the U.S. export reform initiative is to establish a single agency that will use one information technology system to process all export license applications. This aspect of the reform is expected to carry over into the next administration.
   Meanwhile, Hirschhorn, and his counterpart at the agency, Assistant Secretary for Export Administration Kevin Wolf, are widely credited within the Obama administration, as well as by the export industry, for leading the charge on export control reform within the Commerce Department for the past seven years.
   “All of us in this room will miss [Hirschhorn’s] leadership when he departs. But he will leave you in the capable hands of BIS’s experienced and talented career staff, including Deputy Undersecretary Dan Hill, Deputy Assistant Secretary Matt Borman, and Deputy Assistant Secretary Rich Majauskas. Now and into the next administration, I have great confidence in this team,” said Commerce Secretary Penny Pritzker in her keynote speech at the Update conference.