Industrial Base Should Prepare for Export Control Reforms.

• Author: Stagg, Christopher
• Position: Viewpoint

The State Department's directorate of defense trade controls, the agency responsible for administering the International Traffic in Arms Regulations (ITAR), a body of export control rules that generally covers many military and other critical items, recently made public a slew of intended and upcoming regulatory reforms.

These developments are notable as the last significant revisions to the ITAR took place in early 2020 when many civilian type firearms and related components were moved to the Commerce Department's export control regulations. As such, the regulations have been relatively stable over the last few years, especially when compared against the almost-constant updates to the Commerce Department's export control regulations or to the Treasury Department's economic sanctions laws.

As part of the announced reforms, most significantly, the State Department intends to engage in a thorough review of the U.S. Munitions List (USML), which is a listing of 21 categories that enumerates or otherwise describes the items--such as hardware, software, services, and data--that are subject to the ITAR. That review will primarily consider the "technology frontier" to determine whether any "critical and emerging technologies" should be included to the list and therefore subject to the ITAR.

The State Department is expected to announce that broad technology-based review formally in the Federal Register sometime this year.

For industry, it is important to understand that for an item to be included on the USML, the applicable policy standard should be whether it provides a critical military or intelligence advantage, or if the item is inherendy military. Moreover, the State Department previously advised that "critical" means the item is considered a "crown jewel"--as the government's stated intention is to include only those types of items on the USML rather than less sensitive items.

Historically, the last major revision to the munitions list regarding an emerging technology took place in 2002, when a dedicated category for directed energy weapons was added. Since then, the list has included "developmental" entries for certain types of items, and most of those controls are in context of where the Defense Department is providing any funding for the item. In those situations, the State Department presumes such items are emerging technologies unless an exception applies, such as by requesting a formal government determination--via the ITAR's commodity...