The US Department of State recently published proposed rules to transfer to the Commerce Control List certain items from Category XII of the US Munitions List controlling fire control, range finder, optical and guidance and control equipment.
On May 5, as part of US President Barack Obama’s ongoing export control reform effort, the Department of State proposed to amend the International Traffic in Arms Regulations (ITAR) to revise Category XII (fire control, range finder, optical and guidance and control equipment) of the US Munitions List (USML) to describe more precisely the exact articles warranting control on the USML. The proposed rules are intended to establish a “bright line” regarding control of these articles between the USML and the Department of Commerce’s Export Administration Regulations (EAR) Commerce Control List (CCL).
For example, USML Category XII, Paragraph (a) is revised specifically to control the following:
In summary, the new USML Category XII, Paragraphs (a) through (f) have been fashioned to be very technically specific and intricate—not easily summarized in a LawFlash. Suffice it to say, if a company has products that were formerly covered by old USML Category XII, it should review the new proposed rule to see if its products remain ITAR-controlled or will transition over to the CCL based on exacting descriptions and technical details of specific products.
Notes proposed to be in the new USML Category XII subparagraph (c) (which covers infrared focal plane arrays, image intensifier tubes, night vision, electro-optic, infrared and terahertz systems equipment, and accessories in Category XII) appear to maintain the gist of the current principle, that is—at least for certain components—when they are incorporated into commercial systems, the commercial system is subject to EAR controls rather than ITAR controls. However, the articles in question will be subject to ITAR controls if exported separately from the commercial system. Note, though, that a new criterion to this principle not currently expressed in Category XII is proposed to be added; for this rule to apply, the component must not be removable from the system “without destruction or damage to the [component] or render the item inoperable.”
Items not specifically described in the proposed new Category XII will transition from USML Category XII to the CCL and will be controlled under the EAR CCL in one of several possible Export Commodity Control Numbers, including 6A611, 6A615, 6B615, 6D615, and 6E615, among others.
The former ITAR Category XII items transitioned under the CCL will require an EAR export license analysis to determine whether or not such items require an EAR license for a particular destination. The transition of an item from the USML to the CCL does not imply that an export license is no longer required. Rather, it likely means a Department of Commerce export license (or license exception) is required rather than one from the ITAR.
The proposed rule can be revised and amended based on the comments submitted by the public. The deadline to file comments is July 6.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Margaret M. Gatti