The BIS Annual Update Conference Sheds Light on the Commerce's Proposed Rule To Address Future Controls Over Items Removed From the USML

Last week, the Bureau of Industry & Security ("BIS") held its annual Update Conference. Among the many topics of interest were the continued efforts by the Commerce Department to implement the President's initiative aimed at reforming export controls. Central to that effort is the eventual merging of the United States Munitions List ("USML") and the Commerce Control List ("CCL"). For its part, BIS published a proposed rule, 76 Fed. Reg. 41958, which would create a structured approach for addressing items to be removed from the USML where continued control under the Export Administration Regulations ("EAR") is necessary.

While BIS's proposed rule is a step toward the eventual single export control list, what Assistant Secretary of Commerce for Export Administration, Kevin Wolf, revealed in his opening remarks at the Update was that the proposed rule was just one of a number of recent steps in a larger coordinated effort by the Commerce Department, State Department, and Department of Defense towards export control reform.

Assistant Secretary Wolf indicated that BIS's proposed approach for migrating USML items to the CCL was designed in concert with the recent STA license exception and the State Department's recent proposed revisions to Category VII of the USML.  In addition, Assistant Secretary Wolf indicated that similar USML Category revisions would be released in the near future with Categories VI and VIII most likely to be next.

These three revisions and the future USML Category rewrites have been designed by the three agencies to provide a clear path to eventually merging the two export control lists.  As envisioned by Assistant Secretary Wolf, an item written out of a USML category, but still designed for a military end item or military end use would be migrated under the proposed revisions to the EAR into a series 600 Export Control Classification Number ("ECCN").  Once controlled under the CCL, most of these items would be eligible for license exception STA.  While BIS is still accepting comments on its newest proposed rule and the USML rewrite of Category VII has yet to be implemented, it is under this basic framework that Assistant Secretary Wolf and his counterparts at the State and Defense Departments intend to proceed with President Obama's export control reform initiative.

Kevin Wolf's comment at the BIS Update shed light on the larger, interagency plan.  With less than sixty days remaining to provide comment on the proposed EAR revisions, hopefully exporters will now have enough information to provide meaningful comments and assist shaping effective and meaningful export control reform.