THE WHITE HOUSE
Office of the Press Secretary
FOR IMMEDIATE RELEASE August 30, 2010
President Obama Lays the Foundation for a New Export Control System
To Strengthen National Security and the Competitiveness of
Key U.S. Manufacturing and Technology Sectors
Tomorrow, President Obama will announce a major step forward in the Administration’s efforts to fundamentally reform the export control system and will outline the foundation of our new export control system. These changes – in what we control, how we control it, how we enforce those controls and how we manage our controls – will help strengthen our national security by focusing our efforts on controlling the most critical products and technologies and by enhancing the competitiveness of key U.S. manufacturing and technology sectors.
Last August, the President directed a broad-based interagency review of the U.S. export control system with the goal of strengthening national security and the competitiveness of key U.S. manufacturing and technology sectors by focusing on current threats and adapting to the changing economic and technological landscape. The review determined that the current export control system is overly complicated, contains too many redundancies, and, in trying to protect too much, diminishes our ability to focus our efforts on the most critical national security priorities:
The Control Lists
Under the approach outlined by the President, agencies will apply new criteria for determining what items need to be controlled and a common set of policies for determining when an export license is required. The control list criteria are based on transparent rules, which will reduce the uncertainty faced by our Allies, U.S. industry and its foreign partners, and will allow the government to erect higher walls around the most sensitive items in order to enhance national security.
Agencies will apply the criteria and revise the lists of munitions and dual use items that are controlled for export so that they:
To accomplish these tasks, both the U.S. Munitions List and the Commerce Control List need to be fully structured as “positive lists.” A “positive list” is a list that describes controlled items using objective criteria (e.g., technical parameters such as horsepower or microns) rather than broad, open-ended, subjective, catch-all, or design intent-based criteria. Doing this will end most, if not all, jurisdictional disputes and ambiguities that have come to define our current system.
Applying the criteria, the existing two lists will be split into three tiers:
This flexible construct will improve the nation’s national security and permit the government to adjust controls in a timely manner over a product’s life cycle in order to keep lists targeted and up-to-date based on the maturity and sensitivity of an item.
Once a controlled item is placed into a tier, a corresponding licensing policy will be assigned to it to focus agency reviews on the most sensitive items:
The restructuring of the control lists and the harmonized licensing policies based on the tier of control will revolutionize our current control system. The preliminary results of deploying this new system highlight this fact.
Under the current system, whether a product requires a license depends on which list it falls. The same product may be subject to two significantly different licensing requirements, depending on how it is categorized.
Restructuring the control lists and applying the same licensing policies across the government will eliminate these anomalies and allow us to focus our resources on protecting the items and technologies most critical to our national security.
Agencies will focus and strengthen our enforcement efforts, including by building higher walls around the most sensitive items. There will be additional end-use assurances against diversion from foreign consignees, increased outreach and on-site visits domestically and abroad, and enhanced compliance and enforcement.
Information Technology Systems
Finally, the U.S. Government is transitioning to a single information technology (IT) system to administer its export control system. The Departments of State and Defense are currently being linked to the same IT system and the Department of Commerce will integrate into this system by next year. All relevant departments and agencies will have access to the system. These improvements will create efficiencies within the U.S. Government for reviewing applications and ensure that decisions are fully informed. It will also make it easier for exporters seeking licenses and for enforcement authorities to see what actions have been taken.
The Administration’s goal is to begin issuing proposed revisions to the control lists and licensing policies later this year. These changes, along with enhancements to enforcement capabilities and information technology systems, will create an export control system that is more effective, transparent and predictable – one that enhances U.S. national security, improves the functioning of the government, and maintains the competitiveness of critical manufacturing and technology sectors.
As we implement these steps, the Administration will continue to work with Congress and the export control community, including on the necessary authorities to consolidate these activities under a single licensing agency and single export enforcement coordination agency.