State Department Proposes Rule on International Traffic in Arms Regulation

by Shannon Allen

The Department of State (“DOS”), as a part of the President’s Export Control Reform (“ECR”) initiative, proposes a rule regarding the International Traffic in Arms Regulations (“ITAR”).  The proposed amendment would revise Category XI - Military Electronics of the U.S. Munitions List (“USML”).  The proposal describes more precisely the articles warranting control on the USML and includes “new licensing procedure[s] for the export of items subject to the [Export Administration Regulations (“EAR”)].”

In 2012, the DOS“published proposed revisions to thirteen USML categories and . . . revised four . . . categories to create a more positive control list and eliminate . . . “catch all” controls.” Along with the Department of Commerce (“DOC”) and the Department of Defense (“DOD”), the DOS “reviewed the public comments . . . received on the proposed rules and . . . where appropriate, revised the rules.”  For example, the DOS responded to one public comment noting that while determining whether articles provide “critical military or intelligence advantage” and whether they are “exclusively available” from the U.S. are “important criteria for determining USML control, they are not the only [criteria].” (e.g. many countries make “certain bombs” available, but still “still warrant control on the USML.”)  In addition, the DOS addressed controlling “articles not yet in existence.”  While “such a control is not “positive” in aspect,” the DOS noted, however, it is “good regulatory practice to control as a defense article the fruits of a [DOD] private industry arrangement” with a stated goal of creating a defense article.

Further, “articles . . . removed from . . . the [USML] . . . will still require licensing for export, but from the [DOC].  The DOS, however, does not expect the “change in jurisdiction of these articles” to result in an export difference of $100,000,000 or more, even though the “licensing regime” of the DOC is “more flexible” than that of the DOS.  Also, the DOS does not anticipate the changes will cause significant cost or price increase for “consumers, individual industries, federal, state, or local government agencies, or geographic regions,” or have a major negative impact on “competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and foreign markets.”

The DOS currently seeks “further input from the public on specific matters of concern.”  For instance, the DOS “requests that those who still believe [the proposed rule] captures commercial articles” to offer particular instances of “such articles that would be covered by model or nomenclature.”  Interested parties are invited to submit comments by September 9, 2013, by one of the following methods: 

• Email: DDTCResponseTeam@state.gov with the subject line, “ITAR Amendment—Category XI,”
• Internet: go to www.regulations.gov, search for this notice by using this rule's RIN (1400-AD25), or
• Anonymously: submit comments via www.regulations.gov, leaving fields that identify the commenter blank and include no identifying information in the comment itself.