President Bush signed Jan. 22 a package of directives reforming U.S. dual-use export control policies and practices. According to a White House press release, these directives are intended to clarify and strengthen the ability of the U.S. government to monitor and deny U.S.-controlled goods, services and technologies to potential enemies. They also aim to promote U.S. competitiveness by advancing a more efficient and transparent export licensing process, enhancing dispute resolution mechanisms and ensuring proper levels of control.
Information released by the administration indicates that the directives address the following.
Foreign End-Users. To adapt to the changing threat environment and the globalization of technology and markets, the dual-use export control system will increasingly focus on foreign end-users of U.S. high technology products. This focus will facilitate trade to reliable foreign customers through initiatives such as the validated end-user program. It will also use measures such as the expansion of the Entity List to deny access to sensitive technologies to proliferators, international terrorists and other foreign parties acting contrary to U.S. national security and foreign policy interests.
Competitiveness. To sustain its economic competitiveness and innovation, the U.S. needs to constantly reassess its export controls to ensure that the most sensitive items are controlled. This focus includes developing a regular process for systematic review of the Commerce Control List, easing controls on intra-company transfers, revising controls on encryption products and reviewing re-export controls.
Transparency. The focus on transparency includes the posting of advisory opinions on the Department of Commerce’s Web site as well as the publication of lists of foreign parties warranting higher scrutiny.
Defense Trade. With respect to exports of items controlled on the U.S. Munitions List, the directives provide that:
• additional financial resources and intelligence support will be made available for the timely adjudication of defense trade licenses;
• guidelines will be issued that generally require a decision on defense trade export license applications within 60 days;
• the electronic licensing system will be upgraded to permit the submission of all types of defense trade licenses and to enable all agencies to access the same electronic information;
• U.S. controls on exports involving dual and third-country nationals from NATO and other allied countries will be updated;
• a formal interagency dispute mechanism will be created to allow for the timely resolution of licensing jurisdiction issues involving the departments of State and Commerce under the commodity jurisdiction process;
• the National Security Council will undertake a review to make sure the CJ process is efficient and timely; and
• a multi-agency working group will be established to improve procedures for conducting export enforcement investigations.
According to press sources, the directives incorporate the majority of the recommendations made last March by the Coalition for Security and Competitiveness. In a letter to President Bush, the coalition outlined a number of administrative changes it said could be implemented under current law in order to “protect our sensitive military technologies from our adversaries and rivals while also maximizing the benefits of trade and technology cooperation with our allies and friends.” With respect to dual-use items, these recommendations included creating a license exception for the transfer of controlled items within companies, certifying foreign end-users with strong compliance programs for favorable treatment, streamlining complex controls on products with encryption features, ensuring timely updates of the CCL to reflect market availability and expanding the factors used to determine foreign availability of controlled items. Concerning USML-listed goods, the coalition called for changes such as keeping items on the CCL until after a final CJ determination is made; implementing more efficient, effective and transparent licensing procedures and technology disclosure review processes; and accelerating the implementation of a more robust electronic system for processing and tracking license applications.
World Trade/Interactive
