Could Satellites Finally Spin out of the ITAR Orbit?
Posted by Clif Burns at 8:48 pm on October 16, 2012
Category: Arms Export • BIS • CCL • USML
According to this article in Aviation Week, one aspect of export reform has at least some chance of eeking through the lame duck Congress that will convene after the upcoming elections. The locus of this hope is bipartisan language in the House version of the defense authorization bill that would permit the President to move commercial satellites from the United States Munitions List to the Commerce Control List. One effect of such a change is that commercial satellites, which can’t be exported to China while listed on the USML, could be exported to China pursuant to a license from the Department of Commerce once moved to the CCL.
The Senate version of the defense authorization bill does not contain that language but there appears to be some possibility, according to a Senate Democratic aide, that the Senate, in order to get the bill passed, will consider a pre-conferenced version of the bill with the House language included. A Republican Senate staffer has suggested that Senate Republicans would not oppose such an approach.
UPDATE: A reader sent me a copy of the language from the House version of the NDAA. That language, which can be found in section 1241, as currently written, would prohibit Commerce from granting licenses for the export of any “commercial satellite or related component or technology” to China.
What an Uncool Thing To Do!
Posted by Clif Burns at 6:58 pm on September 5, 2012
Category: BIS • CCL • DDTC • USML
According to an article last week in Bloomberg Businessweek, the Pentagon is seeking to add uncooled thermal imaging devices to the United States Munitions List. Putting that technology on the USML, as opposed to the Commerce Control List administered by the Bureau of Industry and Security (“BIS”), would require licenses for all exports of such technology and would prohibit exports to countries, such as China, subject to U.S. arms embargos.
Thermal imaging devices typically have to be cooled to prevent them from being “blinded” by their own internal circuitry. This results in more expensive devices as well as devices that need to warm up (or more accurately cool down) before they can function. Uncooled thermal imaging, while offering lower resolution under current technology than cooled thermal sensors, are less expensive and easier to operate. Uncooled thermal imaging has a number of non-military applications, such as collision-avoidance cameras used in new automobiles and investigation of heat leaks in homes. A contractor investigating leaks from exterior walls into my house used one. (Useless application: the camera viewfinder showed thermal paw prints left by my dog several minutes earlier!)
As the Bloomberg article points out, uncooled thermal imaging devices are produced by companies outside the United States, including Ulis in France; SemiConductor Devices in Israel; NEC Avio Infrared Technologies Co. in Japan; and Zhejiang Dali Technology Co. in China. The uncooled thermal imaging camera used by my contractor was made by Sonel in Poland (a similar model of which is pictured at right.)
The proposal to add uncooled thermal imaging to the USML is currently undergoing interagency review. A revised USML including that technology could appear as early as this month according to an anonymous DOD source cited by the Bloomberg Businessweek report.
Happy Days Are Here Again
Posted by Clif Burns at 5:00 pm on July 21, 2011
Category: BIS • CCL
Back in February, this blog lamented the change in the format of the Export Administration Regulations (“EAR”) on the website of the Bureau of Industry and Security (“BIS”). The agency deleted the PDF version of the regulations, which was clearly organized and could be easily downloaded and/or printed.
The PDF version was then replaced with the e-CFR version which, among other things, put the entire Commerce Control List (“CCL”) on one HTML page, making it very difficult to navigate to and from the various ECCNs. The e-CFR version also could not be downloaded or printed. This difficulty was further exacerbated by the notoriously slow response time of the Government Printing Office servers, meaning that you could often read War and Peace from cover to cover before a requested page loaded. Worse yet, statements from BIS staff suggested that the new format was easier for the agency to maintain and was here to stay.
Well, I am happy to report that recently — I don’t know exactly when — the old format has returned. Click here to see for yourself. Better yet, the old PDF version had the search function disabled, but you can freely search throughout these new PDF versions. Also, the ECCN references appear to be hyperlinked to the ECCNs themselves, although those hyperlinks are not currently working. If the export community is appropriately grateful, and if we all think good things about BIS for this happy reversion, maybe those ECCN hyperlinks will be activated and start working sometime down the road.
If, for some reason, you became unaccountably attached to the e-CFR version of the EAR and the CCL, you can still find it here.
New Rule Would Make It Harder to Export Spare Parts without Licenses
Posted by Clif Burns at 5:21 pm on July 15, 2011
Category: CCL • Export Reform • USML
As noted in yesterday’s post dealing with the proposed rule by the Bureau and Industry and Security (“BIS”) on the transfer of United States Munitions List (“USML”) items to the Commerce Control List (“CCL”), parts and components of USML items may be transferred to the CCL while the item itself remains on the USML. In those cases, the parts, which will be covered under the new series 600 ECCNs, can be exported under BIS’s license exception RPL. However, that license exception requires that the exported spare parts be one-for-one replacements for parts of an item that had been previously exported pursuant to a license issued by the Directorate of Defense Trade Controls.
The problem here is that those parts now may only be exported without license using the overly restrictive conditions of RPL which require that the parts be a one-to-one replacement and cannot be shipped to be held in inventory for future repairs. This has been a much criticized aspect of BIS regulations which makes American goods less competitive by holding repairs hostage to the shipping delays that the one-to-one replacement rule inherently causes.
If the parts remained on the USML, they would be entitled to the license exemption in ITAR section 123.16(b)(2), which does not contain the burdensome one-to-one replacement requirement. That exemption permits the unlicensed export of repair parts if they are valued at less than $500, provided there are no more than 24 shipments per year to each approved end user. In those many instances where spare parts needed for repairs are relatively inexpensive, this rule provides much more flexibility to exporters; but it will now be lost for those parts that are transferred to the CCL.
Perhaps, the new license exception STA will be used to ameliorate this hardship somewhat. However, for each of the transferred USML parts, STA eligibility will depend on a one-time eligibility determination that may not have been made yet for the particular part at issue. And it won’t apply to exports of parts to countries not eligible for license exception STA. Those wishing to comment on the proposed rule might consider requesting that the provisions of 123.16(b)(2) be written into the revised RPL for the new series 600 ECCNs.
Oh Where, Oh Where, Has My CCL Gone?
Posted by Clif Burns at 9:23 pm on February 10, 2011
Category: BIS • CCL
Let’s say that you were an agency like the Bureau of Industry and Security (“BIS”) and you had a huge and complex list of sensitive items that needed a license for export. Now, unless your administrative goal was to collect a bunch of fines for illegal exports, you would make that list easily and readily available, wouldn’t you? You would think.
But sometime in the past several days our friends at BIS removed the old Commerce Control List (“CCL”) that was linked on their site, and replaced it with a new one that is, kindly put, an unusable mess. Imagine the CCL as one big file with all the ECCN’s smushed together with no index, no table of contents, no links, no page numbers, no bookmarks, nothing but a gigantic run-on webpage. Well, you don’t have to imagine. Click here and behold the new format of the CCL on the BIS website
One mortified exporter, who was kind enough to bring this mess to my attention called BIS, imagining that this was just some temporary mistake that would soon be fixed. The exporter spoke with a BIS Export Counselor who explained that the new format was here to stay. He also conceded that the new format was less easy to use for people trying to classify items. Oh, great.
However, all is not lost. You can find the CCL in its original online format here at Export Law Blog by clicking on the link to the EAR in the right column or clicking here. We can’t guarantee how long the GPO will keep this version of the EAR up-to-date, but for the moment you can still consult the CCL in the format you’ve come to know and love. You can also, for a paltry $191, buy the 2010 dead tree edition from GPO here. Having a hard copy of the entire EAR in your office is sure to impress your friends who probably have no idea just exactly how large it is.