By: John Black
In the January 2, 2014 Federal Register the departments of Commerce and State published notices shifting export control jurisdiction over certain military items and technologies in the US Munitions List (USML) in the International Traffic in Arms Regulations (ITAR) to the Commerce Control List (CCL) in the Export Administration Regulations (EAR). This is the third group of items that has undergone the shift from the USML to the CCL as part of the US Export Control Reform initiative. The changes published on January 2, 2014 do not enter into force until July 1, 2014.
The Directorate of Defense Trade Controls revised the USML so that this list shift applies primarily to four categories in the USML. Those categories and the highlights of the changes are:
Category IV, Launch Vehicles, Missiles Rockets, Torpedoes, Bombs and Mines
DDTC clarified the scope of Category IV by enumerating the items controlled in paragraphs (a) and (b). DDTC also shifted demolition blocks, blasting caps and military explosive excavating devices to the CCL in the EAR (for example, ECCN 0A604.b for military explosive excavating devices). DDTC also moved ablative materials from paragraph (f) to Category XIII(d).
The new IV(h) controls specified systems, subsystems, components, parts, accessories, attachments and associated equipment. IV(h) controls certain items using the “specially designed” approach and other items using an enumerated approach. IV(h)(28) enumerates controls on pneumatic, hydraulic, mechanical, electro-optical or electromechanical flight control systems (including fly-by-wire systems) and attitude control equipment for rockets and missiles—interestingly, IV(h)(28) does not specify attitude control equipment for teenagers as such items are not known to exist. If attitude control equipment for teenagers were developed, I would expect the US Government would apply a 0y521 control to it.
Category V: Explosives, Energetic Materials, Propellants, Incendiaries
A significant change here is that DDTC enumerated specific controlled items and replaced the former catch-all approach in Category V. As a result certain spherical aluminum powder and hydrazine and its derivatives shift to the CCL.
Category IX: Military Training Equipment
DDTC’s objective in Category IX is to establish a bright line between the items the USML controls and the items the CCL controls. The newly enumerated paragraph (a) identifies training equipment, including, for example, towed targets and models or mockups used for maintenance or ordinance disposal training. The new paragraph (b) identifies simulators including system simulators that replicate the operation of an individual crew station, a mission systems or a weapon of a controlled end-item, and simulation software.
Category X: Personal Protective Equipment
DDTC’s objective in Category X is to establish a bright line between the items the USML controls and the items the CCL controls. Protective shelters shifted from the USML to the EAR in ECCN 1A613. Anti-gravity suits, pressure suits and atmosphere diving suits also shifted to the EAR. Equipment for producing Category X items shifted to EAR ECCN 1B613. Finally, DDTC clearly narrowed the scope of Category X controls on parts and components to focus on things such as ceramic or composite body armor plates, laser protective lenses and other items.
Category XVI: Nuclear Weapons Materials
DDTC clarified that neither the ITAR nor Category XVI apply to most of the items described in Category XVI prior to this notice because those items and technologies are under the jurisdiction of the Nuclear Regulatory Commission or the Department of Energy. This category will continue to control tools that model or simulate the environments generated by nuclear detonations.
In addition to the changes described for the individual categories above, DDTC, as it has done with past list shift rules, added a new paragraph (x) to each category, which will be used to identify CCL controlled items on DDTC license applications.
The 31-page Commerce Department notice created many detailed, new ECCNs and revised existing ECCNs. In addition, Commerce revised License Exception TMP in EAR 740.9(a)(11) and License Exception BAG in EAR 740.14(h) to authorize exports, reexports and transfers of personal protective equipment classified under 1A613.c or d. in a fashion similar to the existing ITAR exemption for exports of personal protective equipment.
These new and revised ECCNs require careful review, especially if you are involved in the areas shifted off the USML. The following summary is not a substitute for analyzing the new EAR controls, but it may be a useful road map.
Commerce created new 600 series ECCNs to receive the items shifted off the USML. New ECCNs 0A604, 0B604, 0D604, 0E604 9A604, 9B604, 9D604, 9E604 control items shifted off USML Categories IV and V, with the new ECCNs in Category 0 controlling the shifted explosives/propellant-type stuff and related items and the new ECCNs in Category 9 controlling the items related to missiles and launch vehicles. Commerce created ECCNs 0A614, 0B614, 0D614 and 0E614 to receive military training equipment and related items. ECCN0A614.a controls equipment specially designed for military training that is not controlled by Category IX. 0A614.x controls specially designed parts and components in the standard 600 series fashion. Interestingly, there is no y. paragraph in 0A614.
Commerce revised existing ECCN 1A005 for body armor and added several new 1Axxx ECCNs to control devices to initiate charges, devices containing energetic materials, charges, and other armored and protective equipment. Corresponding changes were made to ECCNs in sub-categories B, C, D, and E in Category 1.
Finally, Commerce made revisions and conforming changes to many existing ECCNs.
Even though the rules do not enter into force until July 1, 2014, export compliance personnel should find time soon to take a look at the changes to the USML and CCL. After an initial review, you may find that you will need to work with technical experts to make specific decisions as to how the changes impact the export control classifications of your products and technologies. This is an important, and, in some cases, difficult task. The bad news is that, based on my initial analysis, this export control list shift does not seem to offer the benefit of moving as many items into EAR No License Required (NLR) eligibility as was the case for past changes for aircraft, gas turbine engines, land vehicles, surface vessels and submersible vessels.
As with past reform changes, after you determine how this impacts your classifications, you need to decide your strategy for using existing ITAR approvals, transitioning to EAR approvals, and determining what type of EAR approvals you will need. In addition, if your EAR expertise is not at the level of your ITAR expertise, you need to increase your EAR knowledge.
July 1 will be here before you know it.