Nov
7
Microwave Power Modules Added to CCL
Posted by Clif Burns at 12:43 am on November 7, 2007
Category: BIS • DDTC
Almost a year after the last plenary of the Wassenaar Arrangement approved and adopted changes to the Wassenaar List of Dual-Use Goods and Technologies, the Bureau of Industry and Security (“BIS”) yesterday released a final rule implementing those changes on the Commerce Control List (“CCL”). A number of changes have been made, including the addition of some items that were not previously on that list. The list of changes is too long (and in some case too tedious) to fully detail in a blog post, but I did want to discuss briefly the addition of microwave power modules to the CCL which appears to be yet another item which could pose overlapping export control jurisdiction between BIS and the Department of State’s Directorate of Defense Trade Controls (“DDTC”)
Microwave power modules are a recent technology that combines solid-state and vacuum electronics to provide highly efficient and powerful amplifiers with very low signal-to-noise ratio and extremely compact size. MPMs are also known for their rapid turn-on times. These properties have made them attractive for use in military applications such as radar, communications, and unmanned aerial vehicles (“UAVs”). In particular, MPMs have been used in the Predator and Global Hawk UAVs for both satellite and line-of-sight communications to and from the remote pilot. Commercial uses for MPMs include civilian satellite communications, wireless communications, and high power RF sources for laboratory use
The new ECCN for MPMs is 3A001.b.9. The controls on the new ECCN are NS2 and AT controls. The NS2 controls mean that licenses will be required for all countries other than those classified on those in Country Group A:1 on the Country List. License requests to any country other than one in Country Group D:1 will be subject to a general policy of approval unless there is evidence of a possibility of diversion to a country in Country Group D:1. License requests for a country in Country Group D:1 are subject to a case-by-case examination and will be approved if BIS determines that the item will not be used for military purposes. AT controls mean that license requests for exports or re-exports to Cuba, North Korea, Iran, Sudan and Syria are subject to a general policy of denial.
ECCN 3A001.b.9 sets forth certain performance requirements for an MPM to be covered. These include the unit’s turn-on time, the size of the unit as a function of its output power, and a measure relating to the unit’s instantaneous bandwidth.
A large number of MPMs are explicitly identified by their manufacturers as designed for military use, in which case they are covered under Category XI (Military Electronics) of the United States Munitions List (“USML”) or possibly Category XV (Spacecraft Systems and Associated Equipment). Interestingly, the related controls section of ECCN 3A001 only references, and excludes, MPMs covered under Category XV. This leads, of course, to an interesting question of overlapping or conflicting jurisdiction.
Consider, for example, an MPM designed for a military terrestrial communication system which therefore is covered by USML Category XI(a)(4)(iii). If that MPM meets or exceeds the performance characteristics of ECCN 3A001.b.9, then it would also be covered by that ECCN because only items covered by USML Category XV are excluded from the ECCN. Do you file a commodity jurisdiction request for that MPM? Or should you simply file for export licenses from both BIS and DDTC? Given the length of time it takes for a commodity jurisdiction request to be decided, the answer, of course, is to file for licenses from both agencies. To avoid this result, BIS should add to the “related controls” section of ECCN 3A001 an exclusion for MPMs covered by USML Category XI.
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10 Comments:
Clif,
On more than one occasion I have been informed by DDTC and BIS officials that if an EAR item requiring an export license is made a component in an ITAR system, an ITAR license for the system would trump the need for a BIS license. If in your example above, the MPM is being exported separately from the “system” wouldn’t the item remain EAR until incorporated into the system? Would you expect either BIS or DDTC to RWA one of the applications?
Clif,
The ITAR and EAR can not have concurrent jurisdiction over a commodity. If the commodity was “designed for a military” anything, it is ITAR-controlled, unless DDTC cedes control over the commodity to the EAR and BIS (See 22 CFR 120.3 and 120.4). While the ITAR qualifies automatic ITAR designation with language pertaining to “predominant civil applications” (120.3(a)(i)) and “performance equivalent to those… for civil applications,” (120.3(a)(ii)) the heavy presumption is that commodities designed for a military purpose are controlled under the provisions of the ITAR. The most obvious reason being that an item which has been specifically designed for a military purpose has been so designed because the commodities in existence and in use in civil applications were insufficient to step into the shoes of the military need.
Until a manufacturer has received a Commodity Jurisdiction (CJ) decision from DDTC ceding jurisdiction over the commodity to the controls of the EAR and BIS, the commodity remains ITAR-controlled. The manufacturer does not treat the item as though it is concurrently controlled by both the ITAR and EAR while the CJ is pending. While the CJ is pending, the commodity is ITAR-controlled. I have heard that one of the quickest ways to make enemies at DDTC and BIS is to submit duplicate license applications to both agencies for the same commodity.
I agree with you that BIS could have been more thorough in the related controls section, but I understand that BIS offers the related controls sections as a courtesy – not an absolute and definitive statement of all related controls on similar technologies and commodities.
For me, it is clear that MPMs designed for a military application remain ITAR-controlled until released from the controles of the ITAR via finalized CJ. The murkier question lies ahead for those manufacturers who have, in the past, found themselves under the controls of the ITAR and USML XI despite designing the MPM for a civil application. What to do now with the next generation of the manufacturer’s MPMs which are very similar to their ITAR-designated predecessors? Here again, I’d recommend geting at least a few CJs finalized and in favor of ceding jurisdiction to the EAR under 3A001 before jumping lock, stock, and barrel over to the EAR.
Actually, Matthew, BIS and DDTC can have concurrent jurisdiction over a commodity. BIS says so explicitly in section 734.6:
Exporters should note that in a very limited number of cases, the categories of items may be subject to both the ITAR and the EAR. The relevant departments are working to eliminate any unnecessary overlaps that may exist.
That same section, when talking about specially designed military components says “in many instances” they “may” fall under DDTC jurisdiction. It doesn’t say in all instances it will be controlled by DDTC.
Kndl – I’ve heard the same interpretation with respect to CCL parts in a USML item. This is apparently based on section 770.2(b)(1) which says that parts of a component are covered by the license for the component. So the example above only covers separate export of the MPM.
Clif,
I read 734.6 to mean that there is category overlap. With respect to a specific commodity, (in other words, “this MPM right here in my hand”), jursidiction is exclusive. For example, the EAR controls some Night Vision Goggles (NVG), but the ITAR controls other NVG. This is category overlap. As it pertains to a specific set of NVG, the commodity itself will always fall under either the jurisdiction of the EAR or ITAR, but not both.
The point is, Matthew, if the item in your hand meets the criteria of both the USML and the EAR, then how do you determine which license to get? Nothing in the EAR says that USML trumps the CCL, so an overlap in the category is necessarily an overlap in jurisdiction.
Clif,
I am not sure that you concede the point that if an item is designed for a military purpose, it is controlled under the provisions of the ITAR unless and until released by a finalized Commodity Jurisdiction (CJ).
If you accept this premise, there will be no overlap or concurrent jurisdiction issues. One simply looks to the purpose for which the item was designed. If military (and, in limited cases, certain specialized civil purpose – See below), it is ITAR-controlled.
As I read it, in the Related Controls language of 3A001, BIS reminds us that some commodities designed for certain civil purposes (those civil purposes specifically called out in USML Category XV) are still ITAR-controlled. USML Category XI contains no language pertaining to controls over commodities designed for civil purposes. USML Category XI only pertains to electronics designed for a military purpose. I take it for grnated that items designed for a military purpose are always ITAR-controlled unless and until released by DDTC via finalized CJ.
If you do not agree with me that an item designed for a military purpose is controlled under the provisions of the ITAR until released by DDTC via finalized CJ, you will continue to find overlapping jurisdiction. And at that point, we can simply agree to disagree.
The problem with your position, Matthew, is that nothing in the EAR says that items that are specially designed military components are exclusively USML. Indeed § 734.6 says that such items “in many instances” are DDTC controlled; it doesn’t say always. Certainly your position would be something which as a matter of policy BIS should adopt. However, there’s nothing in the EAR to suggest that they have. So, let’s say that you ship something that is controlled by both, what section of the EAR will you cite when BIS claims that you shipped the item without a BIS license?
Clif,
The ITAR states that items designed for a military purpose are ITAR-controlled.
The EAR, at 734.3(b)(1)(i), states that items controlled under the ITAR are not subject to the EAR.
So, if BIS comes for me, I’d cite 734.3(b)(1)(i) and I’ll show them my DDTC license.
I interpert that those instances alluded to by negative inference in 734.6 are where DDTC has ceded control over the items to BIS.
That’s not what 734.3(b)(1)(i) says Matthew. It says items “exclusively” controlled by ITAR aren’t subject to EAR. “Exclusively” is what creates the problem in relying on that section, particularly given that 734.6 says that there are things that are covered by both EAR and the USML.
When BIS wants to cede jurisdiction in the EAR to DDTC it does it explicitly in the “related controls” portion of the EAR, as it does, for example, in ECCN 6A005, where it directly says that lasers modified for military use aren’t controlled. The term “exclusively” in 734.3(b)(1)(i) is, in my view, a reference to ECCNs like 6A005 where exclusive jurisdiction is explicitly ceded by BIS.
Clif,
Again, I think your interpretation is off, but we can agree to disagree, and I’m okay with that.
I see 734.6 as speaking to overlap of jurisdiction with regards to categories, like Night Vision or Space-Qualified technologies (See, for example, https://www.bis.doc.gov/news/2003/AnnualReport/chapter1p.pdf – Page 3). As such, 734.6 does not advance an argument for concurrent licensing jurisdiction over a specific commodity. In my opinion, it says that in a given bundle of widegets, some widgets may be ITAR-controlled and other widgets may be EAR-controlled. They apologize for any confusion that may be caused, and assure us they’re trying to work it out – to separate the widgets into piles. But I do not believe 734.6 says that with regard to a specific widget, DDTC and BIS will both claim jurisdiction over the same widget at the same time.
Additionally, I read 734.3(b)(1)(i) as BIS deference to the exclusive jurisdiction over USML items to DDTC. The word “exclusive” in this context is not a qualifier. Rather, it is evidence that BIS has ceded jurisdiction over most items which have been designed or modified for a military purpose to DDTC – in the interests of national security (See, for example, http://library.findlaw.com/1998/Jul/1/130640.html). Those military items which are EAR-controlled are those items for which DDTC has ceded specific jurisdiction to BIS.
The related controls information in the CCL is provided as a courtesy to industry. BIS does not cede jurisdcition to DDTC in the related controls paragraphs. It has already done so in 734.3(b)(1)(i). This makes good sense. Since DDTC controls the international traffic in arms – an important national security concern – BIS should pay great deference to DDTC controls and jurisdiction.
The above analysis leads to a system which vests exclusive licensing jurisdiction over commodities with the appropriate USG agency, which is the type of licensing jurisdiction trumpeted by all BIS and DDTC folks with whom I’ve come into contact. And this is also important. A practioner must have some insight into the law behind the law. For example, while you will not find the “See-through Rule” memorilaized in the ITAR, most practitioners understand it and adhere to its tenants. BIS and DDTC acknowledge its impact on licensing jurisdiction. As such, I need not fear BIS reprisals for the export of the 99% of the system which was controlled under the dual-use provisions of the EAR. The 1% which is ITAR-controlled is sufficient to vest control over the entire system exclusively with DDTC.
Similarly, I’d be interested to know if anyone has ever spoken with anyone at BIS or DDTC who recommended treating a widget as though BIS and DDTC shared concurrent licensing jurisdiction over the widget? I have not. Exclusivity of licensing jurisdcition over widgets has been a basic premise and ruling guide of practice since before I struck the first keystroke of a Commodity Jurisdiction request. I’d be surprised at this late stage in the game to find that I’d been using a checkerboard to play Parcheesi all this time.
