At the beginning of Tolkien’s popular The Lord of the Rings trilogy, Frodo is given a mysterious ring which has the power to control the whole world. Today, the U.S. export control community was handed a similar prophecy by Defense Secretary Robert Gates.
Speaking to members of the Business Executives for National Security, Gates said the United States must totally revamp its Cold-War era export laws and regulations. He said the current controls actually harm U.S. national security, and he outlined a series of plans to occur within the next year, which – once in place – will give U.S. export regulations a much-needed facelift.
“The United States is thought to have one of the most stringent export regimes in the world, but stringent is not the same as effective,”Gates said.
Among other things, the Secretary of Defense outlined a plan focused on four key reforms to current U.S. regulations:
1. The creation of one list of controlled items, which will replace the current two lists – the United States Munitions List (USML) and the Commerce Control List (CCL)
2. The creation of one agency responsible for export licensing. Currently, licensing responsibilities reside with both the Directorate of Defense Trade Controls (DDTC) and the U.S. Bureau of Industry and Security (BIS).
3. One agency responsible for U.S. export enforcement and coordination.
4. One information technology system to help manage the work. (It’s unclear what this means right now, but it’s possible that Gates is talking about the consolidation of the DTrade and SNAP-R online systems.)
Gates went on to describe a tiered system of controls. In this system, the U.S. would place tighter controls around its most sensitive technologies (“the crown jewels” as Gates calls them), while – at the same time – creating lower “walls” of security around less sensitive items. In theory, this will make it easier for the U.S. to share capabilities with its allies and partners around the world.
Most of these reforms – including the creation of a new control list – are expected within the year. However, some require congressional approval and may take longer.
Export Solutions will follow these reforms closely, and keep our clients up-to-date on all the important changes to export laws and regulations. To borrow a line from Lord of the Rings, it appears today that U.S. exporters are on track to receive:
One List to rule them all, One Agency to license them
One Agency to enforce the rules, and One IT System to bind them
Tom Reynolds is the Vice President of Operations for Export Solutions, a consultancy firm which specializes in ITAR and EAR compliance.