Despite all the naysayers and skepticism when the effort first began back in 2009, the initial implementation of export control reform is upon us!

Yesterday the Department of Commerce and Department of State published their respective final rules for initial implementation of export control reform. Both rules come with a delayed effective date and come into force October 15, 2013. Put it on your calendars folks!

Here’s a summary of what has changed in the ITAR under this rule:

  • Revision of USML Categories VIII (Aircraft and Related Articles), XVII (Classified Articles, Technical Data, and Defense Services Not Otherwise Enumerated), and XXI (Articles, Technical Data, and Defense Services Not Otherwise Enumerated);
  • Addition of USML Category XIX (Gas Turbines Engines and Associated Equipment);
  • Establishment of definitions for the terms “specially designed” and “subject to the EAR”;
  • Creation of a new licensing procedure for the export of items subject to the EAR that are to be exported with defense articles; and
  • Related amendments to other ITAR sections.

The EAR has numerous changes as well, including:

  • Addition of the “600 Series” to the CCL
  • Transition Period and Dual Licensing
  • De Minimis and Foreign-Produced Direct Product
  • Amendments to various parts of the EAR including adding the definition of “Specially Designed”

Revisions to the EAR can be found in the Federal Register notice here. Similarly, revisions to the ITAR can be found here.

From the FR summary:

As part of the Export Control Reform (ECR) Initiative, the Bureau of Industry and Security (BIS), and the Directorate of Defense Trade Controls (DDTC), Department of State, have published multiple proposed amendments to the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR), respectively, to strengthen national security by fundamentally reforming the export control system. This final rule implements the initial ECR changes by adding a structure and related provisions to control munitions items that the President has determined no longer warrant export control on the U.S. Munitions List (USML) on the Commerce Control List (CCL), specifically aircraft, gas turbine engines, and related items. This rule is being published in conjunction with a Department of State rule that revises the USML so that upon the effective date of both rules, the USML and CCL and corresponding regulatory structures will be complementary. The revisions in this final rule are also part of Commerce’s retrospective regulatory review plan under EO 13563, which Commerce completed in August 2011.

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