DDTC Preparing USML Review, Assessing More ‘Complex’ Ukraine Licenses
The State Department’s Directorate of Defense Trade Controls is preparing to publish several new export control rules, including one that will request feedback on U.S. Munitions List categories and another that will consolidate exemptions under the International Traffic in Arms Regulations. DDTC is also starting to review a more complex set of Ukraine-related export licenses after moving through some of the more straightforward applications earlier this year.
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The agency soon will publish a proposed rule to solicit industry feedback as it reviews various categories of the USML, a government official said June 29 during the Bureau of Industry and Security’s annual update conference. The agency is specifically looking for feedback on Category XI military electronics, which has been one of the “hardest ones to certainly review as part of export control reform,” the official said, speaking on background as part of a conference policy for certain career personnel. The official also said technologies within the category change "dramatically year by year.”
Feedback on each of the categories under review is crucial, the official said. “I want to foot-stomp that it’s incredibly important that industry provides input to these rulemaking processes,” the official said. While some DDTC officials are “experienced in working in particular technology areas, they have not been working in industry for some time, and getting that perspective is very essential to ensuring that our review continues to maintain the pace of technology.”
The agency also hopes to publish “shortly” the next rule in its effort to reorganize the ITAR, the official said. The rule will aim to consolidate exemptions in the ITAR, the official said, and follows the agency’s March rule that reorganized and consolidated definitions, guidance and authorities in the ITAR (see 2203220013), which some companies said still need clarification (see 2205160026).
The upcoming rule will ask for feedback on the ITAR’s existing exemptions. “Are they clear? Are there other things that they should be covering?” the official said. “What should we know? What should we change?”
DDTC also is getting closer to starting its open general license pilot program (see 2204290032), the official said, which the agency is “particularly excited about.” The license would allow U.S. exporters to ship to certain trusted U.S. trading partners without having to apply for a specific license and would build on the “positive aspects” of defense cooperation treaties, the official said. “It will put it into a framework that really allows us to take advantage of an approved list of countries and a vetted list of technologies that we feel comfortable” with. The official said the license pilot program will be published in the Federal Register.
Although the agency is preparing several FR notices, it has also been “incredibly focused” on Ukraine, the official said. DDTC has approved “millions” of dollars worth of exports to Ukraine since January, the official said, many involving retransfer requests from third countries for U.S. items destined to Ukraine.
Many of those applications have been relatively straightforward, the official said, and the agency is now starting on the more complicated license requests. “We did the easy licenses the first few months, and now we're getting down to the harder ones, the ones where you have brokers that are looking to potentially take advantage of the situation there,” the official said. Although the applications are “certainly more complex,” the agency is still hoping to expedite decisions on those licenses. “Our licenses are still moving, usually in a matter of days,” the official said, “if not a week.”
To help with the workload, DDTC is planning to add more resources, the official said, including to help with its commodity jurisdiction process. The official said DDTC recently hired more contractors and is looking to hire "several" new career officials "with the idea that the team will be more quickly adjudicating commodity jurisdiction requests."