Single Export Agency Not Likely During Obama Administration, Say BIS Officials

The Bureau of Industry and Security is still striving to create a single export licensing agency with harmonized applications and terms in the coming years, but that effort won’t happen during the Obama administration, said Assistant Secretary of Commerce for Export Administration Kevin Wolf, at the 2015 BIS Update conference on Nov. 2. BIS officials have repeatedly touted the merits of that harmonization (see 1507220021), claiming existing differences between the International Traffic in Arms Regulations and the Export Administration Regulations create an arbitrary burden on traders.

Wolf and his superior, Under Secretary of Commerce for Industry and Security Eric Hirschhorn, offered different interpretations, however, on the need for legislative action to meet that single agency goal, which BIS officials refer to as Phase III of the administration’s Export Control Reform. Wolf said BIS and the State Department’s Directorate of Defense Trade Controls currently have the statutory authority to move forward with that effort. But Hirschhorn said "a single licensing agency would definitely require legislation." At a "minimum it would require restoring the president’s reorganization authority, which lapsed about 30 years ago and has not been renewed,” he said at a roundtable discussion with press, referring to an authority that expired in 1984 (here). “At a maximum, it would require specific legislation to create a single agency. Obviously we don’t know if that’s going to happen.”

Next Steps for Export Control Reform

BIS is targeting a separate final rule to harmonize regulatory terms between ITAR and EAR as the first matter of priority in the coming weeks and months, Wolf said. Commerce and the State Department proposed that rule in June, and industry was given until August to comment (see 1506020016).

The agencies are also planning to move forward with transfers of items from the U.S. Munitions List to the Commerce Control List. BIS is aiming for a proposal on Category USML XII (Fire Control, Range Finder, Optical and Guidance and Control Equipment), said the officials. The next priority will then fall on USML Categories VIII (Military Aircraft) and XIX, which the agencies say controls military gas turbine engines. The Obama administration unveiled initial proposals for those categories in March (see 1503110020).

BIS plans to then tackle another proposal for Category XIV (Toxicological Agents), followed by a subsequent proposal for a harmonized destination control statement proposal, initially floated in May (see 1505210063). The National Customs Brokers & Freight Forwarders Association of America criticized that proposal, saying it would burden industry at no benefit (see 1507090021).

Increased Use of STA License Exception

Since 2013, U.S. exporters have dramatically increased use of the Strategic Trade Authorization license exception and that rise is expected to continue, said the two BIS officials, along with BIS Deputy Assistant Secretary Matt Borman. More than 600 U.S. companies have used STA since then, exporting more than 20,000 shipments worth over $1 billion.