White House Moves Forward With Export Control Reform

President Obama issued a new Executive Order on March 8 updating delegated authorities related to export and import controls.  He also notified Congress of the first in a series of changes to the U.S. Munitions List (USML).  The Aerospace Industries Association (AIA) praised the Administration’s announcement.

The Obama Administration has been a strong proponent of export control reform, including for commercial satellites, and took several steps in the President’s first term.  A White House fact sheet summarizes these latest two actions.  The new Executive Order (EO) supersedes EO 11958 from January 1977 and amends EO 13222 of August 2001, consolidating all brokering responsibilities with the Department of State, eliminating possible double-licensing requirements, directing the Department of Commerce to establish procedures for congressional notification of approved export licenses for certain items, and making other updates.

The changes to the UMSL that were notified to Congress concern Aircraft and Gas Turbine Engines.  Additional changes will be made to other categories on the USML throughout 2013 and eventually will update every category of items on the USML.

Exports of commercial satellites are currently regulated under the USML and its International Traffic in Arms Regulations (ITAR) because of language in the 1999 National Defense Authorization Act (NDAA).  Congress passed that language because it concluded U.S. satellite manufacturers aided China in developing missile technology in the 1990s, a period of time when U.S.-built satellites could be exported to China for launch.  U.S. satellite manufacturers argued strongly that the strict export controls make them less competitive in the global marketplace.  The Aerospace Industries Association (AIA) and the Satellite Industry Association (SIA), in particular, lobbied for more than a decade to relax the restrictions.  They succeeded at the very end of the 112th Congress with language included in the FY2013 NDAA.  Satellite exports to China and certain other countries continue to be prohibited, however.

Passage of the law is just the first step.   AIA issued a press release lauding the Administration’s March 8 announcement, saying it “marks the final steps required before formal launch of our recommended reforms can occur.”   AIA and SIA also issued a joint fact sheet explaining the many steps that lie ahead.