The Munitions List consists of defense-related items, services and technology that require an export license issued by the State Department in order to be sold abroad. Many low-level items are being transferred from the Munitions List to the Commerce Department's Commerce Control List (CCL) for dual-use items. Restructuring of the lists is designed to place products into different tiers of controls depending on how sensitive they are. Legislative action will be required to eventually merge the lists into a single control list.
Eric Hirschhorn, head of the Bureau of Industry and Security, said Monday the rationalization of the Munitions List would eliminate the requirement to register with the State Department for many small and medium-size businesses who sell minor elements of defense products currently subject to International Traffic in Arms Regulations (ITAR).
He spoke at the American Association of Exporters and Importers annual conference in New York.
The change in jurisdiction should also solve many problems associated with the 'see-through' rule, which requires an item manufactured offshore and then re-exported to follow licensing requirements even if the item incorporates a small ITAR-controlled part or component, he said.
The smaller Munitions List should also lead to fewer transactions requiring U.S. exporters to obtain approval of complex manufacturing and technical assistance agreements required to share data and services with customers, the Commerce Department undersecretary said.
And it is expected to significantly reduce the time required to determine which regulations apply to parts and components, he added.
The BIS is making room on the CCL to accommodate the Munitions List items. This summer it will publish a proposed regulation establishing new controls for items transferred from the Munitions List that are more in line with their broad availability in the market and national security requirements, Hirschhorn said.
He emphasized that Munitions List items for military use will not be decontrolled, but some may be eligible for license exceptions 'and eventual decontrol is possible as technology advances and comes more widely dispersed. 'So exporters shouldn't expect to immediately send these newly transferred items anywhere they choose.'
The proposal will include a process exporters can use to send those types of products to countries that pose a relatively low risk of unauthorized usage, he added.
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Hirschhorn said fewer parts and components are expected to require Commerce licenses as opposed to a license exception once they join the CCL and exporters will find it easier to sell to overseas customers, especially in allied or partner nations.
BIS is also taking steps to make the CCL more accessible, clear and precise 'so that someone who is not an expert on export control but understands the technology capabilities and characteristics of an item can accurately determine jurisdictional status and classification,' he said.
Hirschhorn credited President Barack Obama for providing the necessary support to make the export reform effort possible. He said the president is so engaged in the process that 'he gave a very prominent foreign leader a short tutorial on commodity jurisdiction issues when that leader visited Washington not to long ago.
'That's pretty extraordinary. I think we've had undersecretaries who couldn't do that. To have a president who can do it, who cares about this, is committed to it, who wants to know (the status) is quite extraordinary. We would not even have begun without that kind of support.' ' Eric Kulisch
