Updates on Export Control Reform (ECR)

1. Updates on Export Control Reform (ECR) Todd E. Willis Director Munitions Control Division Bureau of Industry and Security U.S. Department of Commerce

2. ECR Initiative • In August 2009, the President directed a broad-based interagency review of the U.S. export control system. • The Administration determined that fundamental reform of the current system is necessary to enhance our national security by • (i) focusing resources on the threats that matter most; • (ii) increasing interoperability with our Allies; • (iii) strengthening the U.S. defense industrial base by reducing incentives for foreign manufacturers to design out and avoid using U.S. parts and components.

3. Four Singulars of ECR • In April 2010, Secretary of Defense Robert Gates identified four singulars for reform: (1) Single IT system; (2) Single control list; (3) Single law enforcement coordination agency; (4) Single licensing agency.

4. ECR Focus • The Administration is recalibrating the controls and licensing requirements on items that pose a low risk to national security • This is not a decontrol but a common sense, good government prioritization of our controls. • The reform initiative will enhance, not ease, the prohibitions on destinations like Cuba, Iran, North Korea, Sudan and Syria, and will enhance, not ease, U.S. policy of not supporting China’s military modernization program. • The President’s entire national security team supports a comprehensive overhaul of the system to meet the current and anticipated U.S. national security and foreign policy objectives of the 21st century.

5. ECR Plan The Administration has deployed a three-phase implementation plan. Phases I and II: Progress to date: • Developed and published the methodology for rebuilding the control lists, and will be implementing these regulatory changes on a rolling schedule. • 20 categories, published 9 (18 proposed rules, 1 each for State and Commerce per category) • 3 more (6rules) in the OMB clearance process. • That leaves 4 more (8 rules) to move to OMB for publication. • Begin AECA requirement, 38(f) Congressional notification process summer 2012. • Start publishing final rules fall 2012. Note: Categories: XV, XVI, XVII, XVIII; separate reviews

6. ECR Plan Phases I and II: Progress to date: • Executive Order 13558 created the Export Enforcement Coordination Center (E2C2). • The Administration and Congress partnered to pass legislation, the Comprehensive Iran Sanctions, Accountability, and Divestment Act (CISADA), to increase the disparate criminal export enforcement penalties to a standardized maximum. It also provided the Department of Commerce with permanent law enforcement authority that had been in lapse. • An electronic consolidated list of parties was developed to assist small- and medium-sized companies screen transactions to ensure items are exported in compliance with licensing and other export control requirements. • Four departments – Commerce, Defense, Energy, and State – are already migrating to a single secure licensing IT system administered by Defense; other departments will follow. Phase III will require legislation to implement a government reorganization that would consolidate the current system.

7. Anatomy of a “600 series” ECCN Last two characters (i.e. numbers) will generally track the WAML xY6zz CCL Category 0-9 Product Group A-E The “600 series” derives its name from the 3rd character (i.e., number) of the ECCN.

8. License Requirements for “600 series” “600 series” items will generally be controlled for the following reasons for control: • National Security column 1 (NS1); Regional Stability column 1 (RS1); Anti-terrorism column 1 (AT1). • License required for export or reexport to all countries except Canada (excluding certain items controlled for MT, CB1 & FC reasons) • Regime controlled items retain regime control. • STA (ultimate government end-use), GOV, RPL Specific parts, components, accessories and attachments identified in .y paragraphs. • Anti-terrorism column 1 (AT1) • Restrictions on certain military end-uses in the PRC in §744.21, and other end-use and end-user controls as applicable.

9. USML F-16 F-16 Specific USML Items Other Aircraft USML Items Illustrative List Only • Assembled engines • Weapons pylons • Mission systems • Bomb racks • Missile launchers • Fire control computer • Radar • Radar warning receiver • Radar jammer • Laser/Missile warning system • Countermeasures dispensing system • Aerial refueling receptacle • Helmet mounted displays/Sights • Aircraft wing folding systems and parts & components • Tail hooks and arresting gear and parts and components • Missile rails, weapon pylons, pylon-to launcher adapters, UAV launching systems, and external stores support systems and parts and components • Damage/failure-adaptive flight control systems • Threat-adaptive autonomous flight control systems • Air-to-air refueling systems and hover-in-flight refueling (HIFR) systems and parts and components • UAV flight control systems and vehicle management systems with swarming capability Reference Federal Register / Volume 76, No. 215 / Monday, November 7, 2011 / Proposed rules, page 68697

10. ECCN 9A610 - F-16 Illustrative List Only • Internal & Exterior fuel tanks • Engine inlets and ducting • Wing box • Flaperon • Static structural members • Exterior skins, Fairings, Radomes, Access doors Leading edge flap • Landing gear • Technology associated with above items • Wings, Rudder, Fin, Panels • Fuselage – Forward, Center, Aft • Cockpit structure • Forward equipment bay • Horizontal stabilizer • Conformal fuel tank • Cartridge Actuated Device, Propellant Actuated Device (CAD/PAD) • Control surfaces, activation & control systems Reference Federal Register / Volume 76, No. 215 / Monday, November 7, 2011 / Proposed rules, page 68689

11. THANK YOU MCD Contact Information Todd Willis (202) 482-1477 Todd.Willis@bis.doc.gov Dale Alford (202) 482-3413 Dale.Alford@bis.doc.gov John Cuyler III (202) 482-3475 John.Cuyler@bis.doc.gov Thomas Defee (202) 482-3365 Thomas.Defee@bis.doc.gov Rey Garcia (202) 482-3462 Reynaldo.Garcia@bis.doc.gov Karen DiBenedetto (202) 482-4524 Karen.DiBenedetto.bis.doc.gov