EXPORT CONTROL REFORM: REMARKS BY STATE DEPARTMENT OFFICIAL

FROM:  U.S. STATE DEPARTMENT 
The Path Forward on Export Control Reform
Remarks
Tom Kelly
Acting Assistant Secretary, Bureau of Political-Military Affairs
Center for Strategic and International Studies
Washington, DC
February 4, 2014

Good morning, great to the here with you today. As Acting Assistant Secretary for Political-Military Affairs, I lead the Bureau charged with implementing most of the State Department’s part of the Export Control Reform initiative.

When it comes to implementing ECR, the Administration is focused on creating an export control system that keeps pace with new technologies and supply chain globalization. At the same time, we don’t want this process to sacrifice critical national security and foreign policy objectives, from nonproliferation to supporting human rights.

ECR will streamline U.S. Government decision-making on strategic exports and create a more transparent, predictable system. What it will not do is alter the primacy of foreign policy in the decision-making process for arms exports. Our Foreign Military Sales program, Direct Commercial Sales authorizations, and all exports of munitions from the U.S. will continue to be authorized based on a coordinated review of the foreign policy risks and rewards associated with the transaction. Our newly revised and publicly available Conventional Arms Transfer Policy guides this review. It affirms that the U.S. does not simply allow arms to flow from its borders in response to global demand; we authorize exports that support U.S. foreign policy and national security objectives.

Over the past four months we achieved the first milestones in implementing ECR. In October 2013, the first major revisions to our export control lists went into effect, transferring controls on certain aircraft and gas turbine engines as well as their parts and components from the control of the Department of State to the Department of Commerce. These two categories potentially represent more than $20 billion in annual exports. And this January, new controls on military vehicles and ships went into effect.

Our allies and partners are responding positively to these changes and see many of their concerns related to security of supply addressed by these reforms. The U.S. defense export community is also supportive.

I do want to take this opportunity to – once again – dispel the myth that ECR equals decontrol of arms exports. Any item that is no longer controlled on the U.S. Munitions List is now controlled on the Commerce Control List.

The goal is an agile, dynamic export control regime responsive to today’s and tomorrow’s national security and foreign policy challenges. These new controls reduce bureaucracy, accelerate goods to market for our close allies and security partners, and still maintain a high level of scrutiny over arms exports. Though the full measure of success remains ahead of us, we’re confident that we are on the right path.

STATE DEPARTMENT ISSUES NEW RULES REGARDING TRADE IN SENSITIVE TECHNOLOGIES

FROM: U.S. STATE DEPARTMENT
Export Control Reform: First Final Rules Mark Major Milestone
Media Note
Office of the Spokesperson
Washington, DC
April 16, 2013

The Department of State and the Department of Commerce have issued the first set in a series of final rules that redefine how the U.S. Government protects sensitive technologies and regulates exports of munitions and commercial items with military applications. Modernizing U.S. export controls is a key component of the President’s Export Control Reform Initiative announced in 2009, which has brought together key experts from across the U.S. Government to overhaul the Cold War-era system of controls on exports of U.S.-manufactured defense articles to better meet current and emerging U.S. national security challenges and foreign policy objectives.

These rules, which define items regulated for export under the U.S. Munitions List’s Category VIII – Aircraft and Associated Equipment, and Category XIX – Gas Turbine Engines, are extremely important to the aerospace industry and represent more than $20 billion in annual exports. These are the first of 19 categories of the U.S. Munitions List categories that will be revised under Export Control Reform.

Based on a multi-year series of technical and policy reviews by representatives of the Departments of State, Defense, Commerce, and other agencies, these reforms will move less sensitive items, such as parts and components, from the State Department’s U.S. Munitions List to the Commerce Control List. The revised control lists have been developed in close consultation with the private sector and Congress. Each revised category will become effective 180 days after it is published in the Federal Register to allow companies and their customers time to adapt their internal business practices to the new controls. Work on the remaining categories is ongoing and they will similarly be notified to Congress and published over the coming months.

These reforms will allow the U.S. Government to better focus on controlling the export of sensitive technologies remaining on the U.S. Munitions List while streamlining exports of defense-related items to U.S. Allies and partners around the world, which will contribute to the health and competitiveness of the U.S. defense industrial base, an important national security imperative.

Over the longer term, the Administration remains committed to fundamental reform of the U.S. export control system, including the consolidation of export licensing functions under a single control agency and the creation of a single export control list.