President Bush Issues Directives to Modernize Export Controls

On January 22, 2008, President Bush announced presidential directives aimed at modernizing export controls under both the ITAR and the EAR. In a brief statement, the White House said the package of directives would promote a "more efficient and transparent export licensing process."

With regard to the State Department, President Bush recommended:

More Effective U.S. Export Licensing
·    Additional financial resources and intelligence support will be made available for the timely adjudication of defense trade licenses.
·    Guidelines will be issued that require a decision by the U.S. Government on defense trade export license applications within 60 days, absent a strong reason for additional time, such as a requirement for Congressional notification. Initial efforts in this regard have resulted in a nearly 50 percent reduction since April 2007 in the number of export license applications pending with the Department of State.
·    The electronic licensing system will be upgraded to permit the submission of all types of defense trade licenses and to enable all agencies to access the same electronic information.
·    The Secretary of State will update U.S. controls on exports involving dual and third country nationals from NATO and other allied countries.

A More Efficient Dispute Resolution Mechanism
·    A formal interagency dispute mechanism will be created to allow for timely resolution of licensing jurisdiction issues involving the Departments of State and Commerce under the Commodity Jurisdiction (CJ) process. The National Security Council will also undertake a review to make sure the CJ process is efficient and timely.

Enhanced Enforcement
·    A multi-agency working group will be established to improve procedures for conducting export enforcement investigations.

With regard to the Commerce Department, the Presidential directive recommended:

· Maintaining a Validated End User program to ease exports to "reliable foreign companies," while imposing additional scrutiny on exports to less favored foreign buyers.
· Conducting regular updates of the export controls on dual-use items.
· Revising rules on intra-company transfers of sensitive items.
· Revising rules restricting the export of encryption products.
· Reviewing re-export controls.
· Increasing transparency by publishing advisory opinions on the Internet and listing foreign parties that warrant higher scrutiny.