President Obama Advances Reform of U.S. Export Controls

Space News reported that in a presidential directive signed on December 21, 2009, President Barack Obama has directed his administration to provide a comprehensive set of recommendations to create a new U.S. export control regime. 

The recommendations, which are due on January 29, 2010, must be based on the findings of interagency review of U.S. regulations that govern exports of unclassified military and dual use technologies and that was announced by the White House on August 13, 2009. In his directive, the President requires that the recommendations include statutory and regulatory steps necessary for implementation. 

The review is being conducted by a joint task force established by National Security Adviser and National Economic Council Director, and includes staff members of the National Security Council. The establishment of the review on August 13, 2009, was the first official indication that Obama would develop export control reform. 

Some U.S. industries may benefit from a complete transformation of the current export controls system. The U.S. space industry's market share declined since increased restrictions on U.S. commercial communications satellite exports in 1999, when Congress made all commercial satellites subject to International Traffic in Arms Regulations (ITAR) following allegations that China's military was benefiting from launches of U.S. spacecraft. Prior to this legislation, the Commerce Department had export licensing authority over all commercial communications satellites, with the exception of the most sophisticated ones. 

Defense News reported that 19 industry lobbying groups, representing hundreds of U.S. companies from warplane manufacturers to software encoders, have relaunched a campaign for export controls reform. 

Specifically, the groups seek to de-emphasize current reliance on munitions and dual use technology lists, and instead want to base export decisions on factors such as whether an item can be bought from a foreign country, whether it is widely used outside of defense industry and whether the buyer is a trusted partner. 

A key factor in the reform would be consideration of "foreign availability" in deciding whether an item can be exported. According to the lobbyists, if weapons technology can be bought from other countries, there may be little gain in terms of security by restricting U.S. export of those items or technology. 

Furthermore, the groups seek that export rules be more specific: e.g., unarmed unmanned aerial vehicles (UAVs) and blimps should not be controlled in the same way that missiles are. Similarly, commercial satellites should not be treated as munitions. 

The lobbyists argue that the U.S. Munitions List should be edited to remove items no longer controlled, and a more concrete process should be established for qualifying goods as defense items. One of the lobbying groups seeks that the Commerce Department's dual-use technology list would be completely erased, after which the Commerce Department would provide reasons for why any one item should be placed on the list. 

The groups also recommend that export controls should be switched from a transaction-based approach to a trusted partner process. Accordingly, licenses would not be required for each sale if items were sold to companies and countries that are designated trusted partners. 

Current push for reform is likened to a group effort in 2007 to convince Bush administration to reform U.S. export control regime. As a result of the 2007 process, licensing procedures were improved and waiting periods for export licenses were greatly decreased.