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Definitions, Other Changes Made to Defense, Dual-Use Export Regulations

Friday, June 03, 2016
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security and the State Department’s Directorate of Defense Trade Controls have issued separate final rules to revise various definitions in the Export Administration Regulations and the International Traffic in Arms Regulations to make them more consistent with one another. These rules, which will be effective as of Sept. 1, are part of the Export Control Reform Initiative and are designed to enhance U.S. national and economic security, update and facilitate compliance with export controls, and reduce unnecessary regulatory burdens on U.S. exporters.

Definitions. The EAR and the ITAR each control the export, reexport and in-country transfer of commodities, products or articles, technology, technical data, software and services to various destinations, end users and end uses for similar national security and foreign policy reasons. However, the two sets of regulations have been issued pursuant to different statutes, have been administered by different agencies with missions that are distinct from one another in certain respects, and have covered different items (or articles). BIS states that because many parties' export, reexport and transfer transactions are regulated by both the EAR and the ITAR, particularly now that regulatory jurisdiction over many types of military items has been transferred from the ITAR to the EAR, using common terms and definitions to regulate the same types of items or actions will facilitate enhanced compliance and reduce unnecessary regulatory burdens.

As a result, the BIS rule will revise the EAR to include the definitions of "access information," "technology," "required," "foreign person," "proscribed person," "published," results of "fundamental research," "export," "reexport," "release," "transfer" and "transfer (in-country)" to enhance clarity and consistency with terms also found in the ITAR. Similarly, DDTC is updating the ITAR definitions of "export" and "reexport or retransfer" and creating definitions of “release” and “retransfer.” Comparable ITAR provisions pertaining to "technical data," "directly related," "public domain" and the results of "fundamental research" will be the subject of a separate proposed rule.

BIS notes that while these two rules address only a portion of the terms and phrases that warrant harmonization, they are a significant step toward accomplishing one of the ultimate objectives of the ECR initiative, which is the creation of a common export control list and common set of export control regulations.

Other Changes. The BIS rule amends the “Scope” part of the EAR to update and clarify the application of controls to electronically transmitted and stored technology and software, including by way of cloud computing.

The DDTC rule (1) creates new sections in the ITAR detailing the scope of licenses and unauthorized releases of information, (2) revises the section on exports of technical data to U.S. persons abroad, and (3) consolidates regulatory provisions on the treatment of foreign dual and third country national employees within one exemption.

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