Tuesday, November 1, 2011

White House To Unveil Rules for Aircraft Exports

As part of its ongoing export control reform initiative, the Obama administration is preparing to introduce new guidelines for the export of military aircraft, according to government and industry sources.
Proposed new export rules for aircraft and associated equipment should come late this week or early next week, an Obama administration official confirmed. (Pierre Verdy / AFP via Getty Images)
Proposed new export rules for aircraft and associated equipment, which fall under Category VIII of the U.S. Munitions List (USML), should come late this week or early next week, an administration official confirmed.
In July, the White House introduced a rule that outlined how the administration plans to move items off the USML, which is administered by the State Department, and onto the Commerce Control List (CCL), overseen by the Commerce Department.
"Moving militarily less significant parts and components from the USML to the CCL is a major step in implementing the Administration's common sense approach to export controls," William Daley, the White House chief of staff, said in a July 19 statement.
Items on the USML - from aircraft to generic parts and components - are all subject to the same controls. However, the CCL's controls are tailored to what the item is and where it is being exported.
For military aircraft and associated parts, the State Department will publish a more detailed category for what the administration proposes stays in Category VIII on the USML, while the Commerce Department will publish what the administration proposes should move to the Commerce list.
There are 21 categories of items controlled by the USML. In July, the Obama administration released details for the first category - Category VII: tanks and military vehicles - as a test case of sorts to demonstrate how such transfers could take place.
Since July, the government has been accepting feedback from industry and Capitol Hill about how to improve these transfers.
"We received a lot of good, worthwhile feedback from industry and Capitol Hill," Andrew Shapiro, assistant secretary for political-military affairs at the State Department, said in a September interview.
"As a result, we're really focusing on what are the things we can do most quickly," he said. "We are engaged in what we call a bright line exercise - of going through the various categories and figuring out which items should go on the CCL and which items belong on the USML as a way to offer guidance to industry about what the requirements are, and eliminate some of the ambiguity and confusion that exists under the current lists."
The new aircraft rules also will have a public comment period, in which the government will accept public feedback.
The State and Commerce departments also have been hard at work on Category XV - spacecraft systems and associated equipment - which includes the thorny issue of commercial satellites.
The 1999 National Defense Authorization Act transferred export-licensing jurisdiction over commercial satellites and related components to the State Department, making them the only items on the USML for which licensing jurisdiction is explicitly mandated by law.
The move was instigated by concerns on Capitol Hill that China had obtained secret U.S. technology through a commercial deal to launch U.S. commercial satellites into space using Chinese rockets.
There has been a growing push to ease restrictions on commercial satellites and to provide some relief to the U.S. space industry, whose ability to compete in the global market has been hampered by U.S. export laws.
According to an industry source, the Obama administration is expected to soon release draft Category XV rules along with the long awaited, congressionally required "1248" report on satellites.

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