Industry Group Urges Changes to AUKUS ITAR Exemption Rule

The State Department’s proposed rule exempting Australia and the U.K. from International Traffic in Arms Regulations under the Australia-U.K.-U.S. (AUKUS) security partnership is too restrictive and should be revised to remove barriers to defense trade among the three countries, the Aerospace Industries Association (AIA) told the agency last week.

Although the proposed rule “reflects real intent to liberalize defense trade among the countries,” it needs a host of changes to make it workable for industry and ensure it achieves its intended result, AIA wrote in its 31-page submission. “The most important theme of AIA’s comments is that the department must give full faith and credit to the fact that the Australian and U.K. export control systems will have been deemed ‘comparable’ to the ITAR” under AUKUS.

The association, which represents more than 300 companies in the aerospace and defense sector, also released a two-page summary of its recommendations.

AIA told the State Department that while the proposed rule limits transfers to the physical territories of the three countries, the association would expand the authorization to deployed locations to ensure AUKUS armed forces can receive critical services, including maintenance, repairs and overhauls.

AIA also said it would simplify and streamline the authorized user enrollment process; remove the non-transfer and use assurance requirements for significant military equipment; and clarify that defense articles made in Australia or the U.K. are not subject to ITAR if they contain U.S.-origin technical data or defense services exported through the AUKUS exemption.

Several suggestions address the excluded technologies list (ETL), which consists of items that would require an ITAR license regardless of the exemption. AIA said exclusions should be limited to defense articles restricted by law, international obligations or specific national security concerns. It would remove certain exclusions for unmanned aircraft, and it would narrow exclusions to build infrastructure for nuclear-powered submarines in Australia.

AIA would further revise the ETL to omit technologies required for Pillar II, which calls for jointly developing artificial intelligence, quantum computing, hypersonics and other advanced technologies. AIA urged the State and Defense departments to create a process to quickly adjudicate ETL questions, and it called for formally reviewing the ETL at least every two years to ensure it stays up to date.

For defense articles and services not covered by the exemption, AIA would expand expedited export licensing to include retransfers, reexports and temporary imports among and within AUKUS nations. It would also expand expedited licensing to non-AUKUS partners that are supporting an AUKUS end-user.

The State Department released the proposed rule April 30, and public comments were due May 31 (see 2404300050). The FY 2024 National Defense Authorization Act, which President Joe Biden signed into law in December 2023, authorized the ITAR exemption (see 2312070054).