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Coalition Seeks Completion of Export Control Reform Efforts, Eyes Long-Term Changes

Thursday, March 31, 2016
Sandler, Travis & Rosenberg Trade Report

In a March 25 letter, the Coalition for Security and Competitiveness applauded the “significant progress” made toward the goals of the Export Control Reform Initiative and urged the Obama administration to “tackle the remaining critical issues … and consider carefully how a future administration can build on this important initiative.”

The CSC, which says it represents small and large manufacturers in every industrial sector that drives U.S. leadership in advanced technology, said that in the short term the administration should pursue the following measures.

- complete the review and reconciliation of the U.S. Munitions List and the Commerce Control List by publishing the remaining proposed rules and moving toward finalizing the proposed changes

- complete the harmonization of definitions in the Export Administration Regulations and the International Traffic in Arms Regulations (noting that the Department of Commerce is already working on harmonizing a limited number of definitions)

- complete the transition to a single information technology system(USXports), which has been underway for four years; expedite efforts to provide a single licensing form and a single application portal and to simplify the application process and make it easier for exporters to use; and provide an opportunity for licensing agencies to streamline application review

- renegotiate the 2013 Wassenaar Arrangement agreements on controls for cybersecurity items like intrusion software and network surveillance systems

- devote more attention to improving the efficient processing of license applications by the departments of State and Commerce

The letter also supported meeting the following objectives over the longer term.

- develop and implement a workable comprehensive licensing framework and appropriate license exemptions to expedite exports of defense and security technologies that support U.S. government, military and intelligence interests abroad:

- pursue a program license model for commercial technologies controlled on the CCL that encompasses situations where multiple U.S. companies are exporting to a vetted overseas end-user or a single company has multiple export transactions with a vetted overseas end-user

- implement an effective and efficient intra-company transfer license exception that allows trusted companies to exchange technology freely within their own organizations (with certain conditions) and pursue a deemed export ICT license exception that allows U.S. parties that adopt reasonable, practicable screening and technology control programs to release technology controlled under the EAR to non-U.S. employees in the U.S.

- develop simplified, recalibrated export controls on encryption that restrict only a narrow positive list of encryption-related items

- update intellectual property terms and revise ITAR and other export control regulations so that innovative commercial hardware and technology are not inadvertently captured by the ITAR

- develop a cooperative information-sharing program in which the government would provide companies with information on potentially risky end-users and companies would provide the government with information on entities seeking to purchase controlled goods or technology

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