State Dept’s FY 2011 Budget Request Includes New DDTC Positions

On February 1, 2010, the President submitted his fiscal year 2011 budget request (October 1, 2010 through September 30, 2011) to Congress. The FY 2011 budget request for the State Department is $16.4 billion, an increase of $819 million over what was enacted in FY 2010.

Highlights of the State Department’s FY 2011 budget request include:

12 New DDTC Positions Proposed to be Funded with Registration Fees

The Directorate of Defense Trade Controls (DDTC) proposes to fund 12 new positions with registration fees paid by manufacturers, exporters, and brokers of defense articles, defense services, or related technical data (as defined on the U.S. Munitions List of the ITAR)¹.

Current legislation limits fee funding to compliance and information technology positions related to compliance; however, the State Department has requested legislation to expand the use of registration fees in order to fund 100% of DDTC costs with fees.

Climate Change Assistance and MCC Requested Funding

The State Department’s FY 2011 budget request also includes:

Climate change - $1.4 billion to help developing nations adapt to climate change and pursue low-carbon development with the assistance of U.S.-built clean energy technologies and increased sequestration of carbon stored in soils, plants, and trees.

Millennium Challenge Corp. - $1.3 billion for new Millennium Challenge Corporation compacts in eligible countries, such as Indonesia and Zambia, to reduce poverty and stimulate economic growth. This is a 15% increase over what was enacted in FY 2010.

WCO and WTO Requested Contributions and Proposed Priorities

Included in the State Department’s FY 2011 budget request are contributions to various international organizations, highlights of which include:

WCO - The State Department’s budget proposes a $4.7 million contribution to the World Customs Organization, a 5% increase over what was enacted for FY 2010. The State Department’s current and future priorities for the WCO include:

• increasing global efforts to protect intellectual property rights, such as the Strategy Targeting Organized Piracy (STOP) initiative;
• promoting global implementation of the WCO SAFE Framework through the Columbus Capacity Building Program;
• continuing progress on the third U.S. proposal to incorporate the Importer Security Filing requirements into the WCO SAFE Framework;
• continuing progress in the [supply chain] mutual recognition arena. Currently the U.S. is engaged in discussions with the EU, the Republic of Korea, and Chinese Taipei with the goal of recognizing their respective customs-to-business partnership programs; and
• continuing development of a draft strategy and action plan in relation to the Customs in the 21st Century document, in order to implement the 10 building blocks for enhancing Customs operations globally.

WTO - The State Department’s budget proposes a $24.4 million contribution to the World Trade Organization, a 0.15% increase over what was enacted for FY 2010. The State Department’s current and future WTO priorities include:

• opening additional markets for U.S. producers of goods and services. For example, Russia’s accession will open a $740 billion market. Russia has indicated a desire to complete accession in 2010. China’s succession to the WTO Government Procurement Agreement would guarantee U.S. access to a market worth $55.6 billion.

International Bureau for the Publication of Customs Tariffs

The State Department’s FY 2011 budget proposes a $183,000 contribution to the International Bureau for the Publication of Customs Tariffs, an increase of 9% over what was enacted for FY 2010. The State Department’s current and future priorities in this area include:

• continuing translation and publication of international customs tariffs in the International Customs Journal² and translating U.S. tariff schedules into other languages; and
• continuing to collaborate with member states to standardize their tariffs, helping them adapt the translation of their national texts to customs terminology in accordance with the Harmonized Commodity Description and Coding System.

FY 2011 Request Would Fund Initiative to Counter Piracy Off Coast of Somalia

The FY 2011 budget request includes $186,000 (including 2 positions) for the State Department’s Counter-Piracy Initiative.

(In January 2009, the State Department launched the Contact Group for Piracy Off the Coast of Somalia, which has become the primary international forum for coordination of counter-piracy operations, policies, and programs.)

¹Registration primarily serves to inform DDTC of who is involved in certain manufacturing and exporting activities and does not confer any export rights or privileges. Registering is a precondition for the issuance of any license or other approval for export. DDTC currently maintains a three-tier registration fee schedule which runs from $2,250 to over $2,750 per year.

²The International Customs Journal, published by the International Customs Tariffs Bureau, covers duties indexed by HS numbers for individual countries. The timeliness of the tariff schedules varies from country to country (i.e., new schedules are not published in consistent time intervals). Schedule volumes can be purchased from the National Technical Information Service (NTIS) at http://www.ntis.gov/.

State Department’s FY 2011 budget justification document available by emailing documents@brokerpower.com.