Online, Student Articles — November 13, 2011 at 9:35 pm

A Revamped U.S. Export Control System for the 21st Century

By Manik Suri —

While the United States has built one of the most sophisticated export control regimes in the world, the regime’s Cold War era architecture is outdated and must be transformed to reflect today’s realities and meet tomorrow’s challenges. In August 2009, President Obama directed the National Security Council and National Economic Council to coordinate an interagency review of U.S. export controls with the dual objectives of advancing national security and bolstering key manufacturing and technology sectors. This review culminated a year later with the President’s decision to launch a comprehensive Export Control Reform Initiative to pursue fundamental reform in four areas: (1) what we control; (2) how we control it; (3) how we enforce those controls; and (4) how we manage our controls. The Initiative’s guiding philosophy is to “build high walls around a smaller yard by focusing enforcement efforts on our crown jewels.” Once implemented, these much-needed reforms will mark a vital step toward promoting U.S. national security and industrial competitiveness in the 21st century.

The present system’s weaknesses stem from an overly complicated structure that is rife with redundancy and attempts to protect more than it should. United States exports are currently managed under two control lists administered by separate departments with differing definitions and approaches toward protecting goods. The Department of State manages export of items on the United States Munitions List (USML) under the International Traffic in Arms Regulations, which implement section thirty-eight of the 1976 Arms Export Control Act (22 U.S.C. § 2778). Concurrently, the Department of Commerce controls export of “dual-use” items that have the potential for both commercial and military applications on the Commerce Control List (CCL). It does so through the Export Administration Regulations authorized under the Export Administration Act (P.L. 96-72 (1979)) and, since 2001, through an emergency power pursuant to the International Emergency Economic Powers Act (P.L. 95-223 (1977), 50 U.S.C. § 1701 et seq. (2009)).

The USML and CCL were intended to complement one another. In practice, however, the dual lists have created uncertainty and contributed to lengthy jurisdictional disputes that delay licensing, sometimes for years. Adding to the complexity, three different agencies are responsible for granting licenses, each operating under its own procedures that yield unequal requirements for virtually identical items. Enforcement is left in the hands of numerous bodies with overlapping authority, contributing to inefficient and uncoordinated disciplinary action, while the information technology (IT) systems employed by each licensing or enforcement agency are poorly compatible with one another. Given these shortcomings and the extensive list of controlled items – almost 130,000 licenses were granted in 2010 – it is perhaps unsurprising that the United States government often lacks even the basic capability to determine what it has approved or denied for export.

In recent years, various expert panels, think tanks, and industry groups have submitted proposals to overhaul the export control regime, reflecting growing concerns about the system’s obsolescence. The Obama Administration’s Export Control Reform Initiative aims to incorporate these into a comprehensive framework that advances four major reforms:

(1)  SingleControl List: The key reform involves replacing the two existing export control lists with a single, tiered, “positive” list, which classifies items using objective metrics such as technical parameters rather than broad, open-ended, or subjective criteria. This will reduce uncertainties and disputes that hamper the current system. Items on the new control list will be classified within three tiers: (1) highest tier items provide a critical military or intelligence advantage to the United States and are available almost exclusively from the United States, or are weapons of mass destruction or related items; (2) middle tier items provide a substantial military or intelligence advantage to the United States and are available almost exclusively from our multilateral partners and allies; and (3) lowest tier items provide a significant military or intelligence advantage to the United States but are available more broadly. This streamlined yet flexible approach will enable the government to adjust controls over a product’s life cycle to ensure that they accurately reflect each item’s relative maturity and sensitivity.

(2)  Single Licensing Agency: Licensing decisions will be consolidated within a single licensing agency, which will apply a uniform set of policies to each tier of controlled items. This will ensure clarity and consistency across the system while focusing government review on the most sensitive products. A license will generally be required for items in the highest tier exported to all destinations. Many second-tier items will be authorized for export to allies and multilateral partners under license exemptions or general authorizations. For items in the lowest tier, a license will be required for some, but not all, destinations.

(3)  Single Primary Enforcement Coordination Agency: The President will create an Export Enforcement Coordination Center to strengthen and manage enforcement efforts across all relevant departments and agencies, reducing duplication and eliminating gaps in the current system. Enforcement will also be enhanced through additional end-use assurances against diversion from foreign consignees, increased outreach and on-site visits domestically and abroad.

(4)  Single Information Technology (IT) System: All agencies involved with export control licenses will transition from multiple IT platforms (and, in some instances, even paper) to a single system. American exporters seeking to ensure that they are not violating export controls currently face a maze of forms and protocols across different departments, placing a burden on industry that disproportionately harms small businesses. Going forward, exporters will be able to download a consolidated list of entities with special export requirements from the central website, saving time and expense while increasing industry compliance.

The Obama Administration has adopted a three-phase approach to implement these reforms. Phases I and II are currently underway and involve reconciling definitions and regulations, notifying Congress of changes that will remove controls or transfer items from the more restrictive USML to the less restrictive CCL, and seeking additional funding to upgrade enforcement mechanisms and IT infrastructure. The fully revamped export control system will be rolled out in Phase III, including creation of the single control list, single licensing agency, enforcement coordination center, and unified IT platform.

Last July, the Department of Commerce announced the latest step in implementing these reforms: a regulation that outlines the transfer of less militarily significant items from the USML to the CCL. To demonstrate proof-of-concept, the proposed Commerce rule applies this methodology to one category of the USML, finding that approximately 90 percent of the 12,000 items falling under restrictive munitions controls could be transferred to the more flexible CCL without compromising national security – while simultaneously eliminating nearly 55 percent of licenses currently required. Such clear efficiency gains underscore the need to rapidly implement the final phase of the President’s Export Control Reform Initiative, which will enable American manufacturers to compete aggressively abroad even as the government protects our nation effectively at home. As the United States faces a rapidly changing geopolitical arena in which multiple powers cooperate and compete for influence, our foreign policy demands a sophisticated rebalancing of economic and security objectives. The Obama Administration’s revamped export control system reflects this reality and once established will strengthen American leadership in the new era of global politics that lies ahead.

Image courtesy of NOAA.


  1. Excellent discussion of the ECRI and current developments. Do you feel the Dept. of Com. Proposed Rule actually accomplishes these goals? What about in conjunction with the new Dept. of State Proposed Rule (Nov. 7) proposing specific aerospace items are migrated? What think tanks have made U.S. Export Control reform overhauls? (The “think tank” link is not working, at least for me) Do you have any ideas about how reform will effect humanitarian arms transfer concerns?

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  3. Pingback: A Revamped U.S. Export Control System for the 21st Century « manik suri

  4. Excellent discussion of the ECRI and current developments. Actually export control system on space item is not regulated by international binding law agreement between the countries. do you think international export controls can be regulate by international public law instrument likes other international treaties.

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