U.S. Commerce loosens export control rules

U.S. Commerce loosens export control rules    The U.S. Commerce Department on Thursday published a new regulation as part of the Obama administration's comprehensive export control reform initiative that eliminates the need for companies to obtain export licenses for certain categories of items destined for allies and partner nations.
   Administration officials want to streamline and modernize a cumbersome regulatory regime designed during the Cold War to make compliance easier for U.S. firms, reduce controls on items with limited military usefulness so they have a better chance to compete for sales overseas against international competitors, and increase the interoperability defense systems deployed by the United States and its allies. Controls on a narrow set of the most sensitive technologies will be enhanced to prevent them from being exported or diverted to enemies.
   The effort is strongly supported by the business sector.
   The regulation issued by the Bureau of Industry and Security within the Commerce Department immediately went into effect. It creates a new license exception for up to 3,000 transactions per year for items on the Commerce Control List, involving estimated annual sales of $1.4 billion in goods and technology, when sold to certain nations. Under the Strategic Trade Authorization, the government no longer must be notified for exports of designated items to 44 countries as long as the U.S. company receives certification from the foreign customer that it will not re-export the product outside that group of countries. The U.S. exporter must keep the certification on file, but there is no obligation to file the document on a regular basis.
   A senior official speaking on background to reporters said the government would request documentation as needed and monitor compliance through the Census Bureau's Automated Export System.

Hirschhorn

   'This is a significant step in President Obama’s Export Control Reform Initiative, which enhances our national security and makes U.S. exporters more competitive by easing their licensing burden for exports to partners and allies,” said Under Secretary of Commerce for Industry and Security Eric L. Hirschhorn in a statement.
   Department officials said the license exception, first proposed last December, would allow regulators to focus resources on items that pose a significant national security risk.

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   Among the items eligible for license waivers are electronic components for use on the International Space Station, cameras for search and rescue efforts used by fire departments, components for navigation systems installed on commercial aircraft, airport baggage scanners, and toxins used for vaccine research.
   The Commerce Department is still setting up tiers of items subject to varying levels of control. As it finishes the tier-setting process additional licensing policies will be developed which may move some second-tier items back to Tier 1, but the intent is to decontrol as many items as possible, the official said.
   The new rule also establishes safeguards to help ensure Commerce Department approval is obtained before controlled items exported under the exception are re-exported outside of authorized destinations.
   The administration plans to issue a new regulation in July setting the framework for the transfer of many low-level items on the State Department's Munitions List to the Commerce Control List for items with dual military and civilian applications. The State, Commerce and Defense departments, with oversight from the White House, are working on restructuring those export control lists.
   The July rule will be followed by a series of regulations to implement new controls for items transferred from the more restrictive Munitions List on a category-by-category basis, the official said.
   Officials have ramped up enforcement efforts and continue to develop a single information technology platform for managing license applications, and a consolidated screening list across the government as part of the export reform initiative.
   The regulation was published in the Federal Register. ' Eric Kulisch