FUTURE TRENDS IN EXPORT CONTROLS -- US

1. FUTURE TRENDS IN EXPORT CONTROLS -- US David Hamon Analytic Services (ANSER), Inc david.hamon@anser.org www.anser.org

2. The views contained herein are personaland not those of ANSER Inc. or its clients

3. ChallengesSuppliers and Control • Circumvention strategies (new ways to beat the system e.g. KHAN) • Structural limitations of regimes (bureaucratic, how to control people & know how, control lists limits) • Process weakness of regimes (consensus, weak end user verification, information sharing across regimes) • National Implementation (laws and commitment, weak regulatory structure

4. ChallengesSuppliers and Control[2] • Technology change and globalization • Industry and academic attitudes • Politics (internal affairs vs. common good; north-south differences on impact) • Control of raw materials

5. Background • Threat from extremist groups and WMD proliferation • Looking ahead means looking back • Was: higher fences around fewer things • Now: No tolerance for risk, maintain ability/option to break things, kill bad guys whenever and where ever necessary • Transition from regulatory, compliance and law enforcement emphasis to military and intelligence—these are new drivers • Focus on competing interests, groups • Not always understood by other governments, analysts, public • Observe and note their behavior • Not always clear what the agendas are

6. Background[2] • 110th Congress: • While unknown will exert political influence • Will possibly define new security policy initiatives through new legislation • Exercise power through the authorization and appropriation processes • Changes likely: • International regimes • Coalitions • Greater oversight and auditory functions

7. “ The polar star that should guide all our export control decisions in a world at war must be national security”Assistant Secretary of State John Hillen

8. Policy and Operational Actions • Strengthen international controls • Who is the enemy? • Emphasize intersection of economy, technology, and security—work harder at adapting to changes in technology • Possible Regime consolidation? • Bring more countries under international standards • Ensure defense cooperation and alliance interoperability • More allies get access to more defense articles faster

9. Policy and Operational Actions[2] • Maintain the Global Defense Industrial Base (once was US Industrial base) • AIA promoting new legislation next year • Improve tracking speed • Efficiency, predictability • Bring in non-traditional partners • Lower the Congressional notification threshold • What to do about illicit networks • Issue: worried about more AQ Khans, esp. bio • Impact: more intelligence assets devoted to surveillance • Focus on hidden proliferation pathways and criminal orgs. • What to do about intangible transfers? • Issue: control the export and re-export of technical data traveling over networks • Impact: Expect a new initiative on this

10. Policy and Operational Actions[3] • End User Monitoring • In 2005 45% of export license applications the user could not be confirmed—expand data basesi • Defense pressure to strengthen EUM • Build more government to government program • Vet transfers prior to sale—track transfers afterwards

11. Wild Cards • Rare earth & critical commodities • Issue: mining, transfer and trade of critical raw materials essential to the manufacture of things vital to national security • Impact: Future initiative? • Manage flow of knowledge and information • Issues: no clear boundaries between military and commercial research [esp.bio]. Also tension between universities and government over control of the spread and accumulation of knowledge, scholars • Driving universities out of the Government R&D business • Commercial Supply Chain • Growing recognition on the part of firms they have responsibilities in export controls