On November 7, 2011, the Department of State, Directorate of Defense Trade Controls (DDTC) issued proposed rules to amend the International Traffic in Arms Control Regulations (ITAR) modifying Category VIII, the Category of the United States Munitions List (USML) that contains "Aircraft and Associated Equipment." That same day, the Department of Commerce, Bureau of Industry and Security (BIS) issued proposed rules explaining how items removed from the USML will be classified under the Commerce Control List (CCL). The Federal Register Notices containing the proposed rules can be found here and here, respectively. Comments on these proposed rules are due by December 22, 2011.
These proposed changes are part of the Administration's Export Control Reform Initiative, one goal of which is the creation of a single control list. Currently, the Administration is proceeding on a category-by-category basis to make each USML Category more objective and standards based. The most significant aspect of these changes is that the resulting USML Categories should be positive, containing a descriptive list of specific types of parts, components, accessories, and attachment that continue to warrant control on the USML. All other parts, components, accessories and attachments designed for use with a defense article, which are currently subject to the ITAR, would be removed to the controls of the Export Administration Regulations (EAR).
On July 15, 2011, BIS published a proposed rule that set forth a framework for how articles the President determines would no longer warrant control on the USML would be controlled on the CCL. Following the structure set forth in the July 15 notice, BIS' November 7 proposed rule describes how various military aircraft and related articles removed from USML Category VIII would be controlled on the CCL.
Specifically, BIS reviewed and identified the types of articles that would be removed from USML Category VIII under DDTC's proposed rule. This review identified two important categories of items that would remain on the USML: (1) inherently military articles; and (2) articles that possess parameters or characteristics that provide a critical military or intelligence advantage of the U.S. and are almost exclusively available from the U.S. If an article did not meet either of these criteria, it was proposed to be transferred to the CCL, either on the new "600 series" of Export Control Classification Numbers (ECCNs) proposed in BIS' Notice or some other ECCN on a case by case basis.
While there is substantial skepticism over whether these proposed rules will be finalized given the current political climate in Washington, D.C., they remain an important opportunity for manufacturers and exporters of defense articles to submit comments regarding the structure of the proposed rules, the proposed definitions contained therein, or other matters relating to the Administration's Export Reform Initiative.
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