On July 15, 2011, the Bureau of Industry and Security (“BIS”) published an important proposed rule regarding its plans for implementing the Export Control Reform Initiative. The proposed rule introduces the following:
BIS is very interested in receiving public comment regarding this proposal.
In 2009, President Obama directed the administration to conduct a broad based review of the export control systems of the United States. As a result of this review, the Departments of State and Commerce have proposed to review and revise the United States Munitions List (“USML”) and the Commerce Control List (“CCL”) into an aligned, positive and tiered structure with the goal of combining the two into a single control list. This notice proposes certain changes to the CCL that are needed to achieve the goals of the Export Control Reform Initiative.
Establishment of a New Classification “Reason for Control Group” for items transferred from USML to CCL
The Export Control Classification Number (“ECCN”) consists of several elements. The first digit (current values 0-9) corresponds with one of 10 “categories”; the second digit (current values A-E) is product “grouping”; the third digit (current values 0-3, 9) is associated with the reason for control.
Mechanism for Authorizing the Use of the STA Exception to Items Transferred From USML To CCL
In June 2011, BIS published a final rule establishing the STA license exception, which authorizes the export, re-export and transfer (in-country) of specified items to destinations that pose relatively low risk of unauthorized uses or diversion.
New Temporary “Holding” ECCN
New Definition of “Specially Designed”
A core element of the positive USML review is to avoid using design-intent based control, but BIS recognizes that this may not be possible in all situations. Accordingly, BIS proposes to define a “specially designed” item (other than a part or component) to be one “that is enumerated on the CCL and, as the result of “development,” has properties peculiarly responsible for achieving or exceeding the controlled performance levels, characteristics, or functions of the referenced item identified in the CCL.” The proposed definition includes several refining characteristics. This new definition is used with the goal of:
Transfers an Initial Tranche of Items From USML Category VII to CCL
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