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Proposed Transfer of Guidance and Control Equipment to Commerce Control List Revised

Friday, February 19, 2016
Sandler, Travis & Rosenberg Trade Report

The Bureau of Industry and Security has revised a proposed rule describing how fire control, laser, imaging, and guidance and control equipment that the president determines no longer warrant control under category XII of the U.S. Munitions List would be controlled under the Commerce Control List. Concurrently, the State Department’s Directorate of Defense Trade Controls has redrafted its proposed rule to revise USML category XII to describe more precisely those types of such articles that warrant continuing control on the USML. Comments on these proposed rules are due no later than April 4.

The updated BIS proposed rule would do the following.

- revise ECCN 7A611 and add new ECCNs 7B611, 7D611 and 7E611 for military fire control, laser, imaging, and guidance and control commodities, software and technology

- for certain dual-use infrared detection items, expand export and reexport controls for certain software and technology, eliminate the use of some license exceptions, revise licensing policy, and expand license requirements for certain transactions involving military end users or foreign military commodities

- harmonize provisions within the Export Administration Regulations by revising controls related to certain quartz rate sensors and uncooled thermal imaging cameras

BIS states that it is also proposing a number of changes from its original proposed rule to address concerns expressed by commenters and further harmonize and simplify the EAR. These include (a) eliminating a proposed new worldwide regional stability control for dual-use items but maintaining a new worldwide RS control for certain military technology in ECCN 7E611.a, (b) eliminating proposed controls for certain maintenance, repair or overhaul software or technology related to certain dual-use infrared detection commodities that would likely have resulted in extensive license requirements for purely commercial activities such as civil automotive repair, and (c) creating only one set of 600 series ECCNs corresponding to USML category XII rather than two. Further, BIS is proposing new revisions to the EAR not included in the original proposed rule, such as removing controls specific to QRS-11 sensors.

DDTC states that comments on its original proposed rule led it to reevaluate USML category XII in its entirety and draft this second proposed rule. The most significant change, DDTC states, is that certain articles would be controlled based on the design intent of the manufacturer. This proposal would also amend USML categories VIII, XIII and XV to reflect that items now described in those categories would be in the revised category XII.

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