Where Industry and Security Intersect
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Certain technology transferred from the United States Munitions List to the Commerce Control List (CCL) is subject to “enhanced control.” This technology is designated on the CCL by the acronym “SI,” which stands for “Significant Items.” The technology controlled for SI reasons is “hot section” technology for the development, production, or overhaul of commercial aircraft engines, components, and systems. Technology controlled for “significant items” reasons is classified ECCN 9E003 on the CCL. All technology controlled for “significant items” reasons is also controlled for “national security” reasons.
The licensing policy for “hot section” technology is as follows:
This control provides a mechanism for the United States to monitor the export of this technology more closely to prevent its use in a manner that would adversely affect U.S. nonproliferation goals or the military balance within a region.
1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has determined that this control is likely to achieve the intended foreign policy purpose, notwithstanding various factors, including the foreign availability of these SI-controlled items; and that the foreign policy purpose has only been partially achieved through negotiations on export controls with the participating states of the Wassenaar Arrangement.
2. Compatibility with Foreign Policy Objectives. The Secretary has determined that this control is compatible with U.S. foreign policy objectives, and that the extension of this control will not have any significant adverse foreign policy consequences. The control is consistent with U.S. foreign policy goals to promote peace and stability and to prevent U.S. exports that would contribute to inappropriate military capabilities abroad.
3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to this control is not likely to render the control ineffective, nor will any adverse reaction by other countries be counter-productive to U.S. foreign policy interests. “Hot section” technology for commercial jet engines is subject to dual-use export controls by other allied countries. These countries also recognize the desirability of restricting goods that could compromise shared security and foreign policy interests.
4. Economic Impact. The Secretary has determined that any adverse effect of this control on the economy of the United States, including on the competitive position of the United States in the international economy, does not exceed the benefit to U.S. foreign policy objectives. In FY 2004, the Department of Commerce approved 125 licenses for technology controlled under ECCN 9E003. Most of the 125 licenses approved involved the export of “hot section” technology, but 36 of those involved deemed exports (i.e., the transfer of “hot section” technology to foreign nationals in the United States). The total dollar value of the licenses approved was $20.1 million in FY 2004. There were no rejections of applications involving the transfer of engine “hot section” technology in FY 2004. Additionally, 26 applications with a value of $10.6 million were returned without action, primarily because additional information was needed to process the case.
5. Effective Enforcement of Control. The Secretary has determined that the United States has the ability to effectively enforce this control. The U.S. Government does not experience any unusual problems in enforcing this control. Manufacturers and intermediary companies are familiar with U.S. controls on these products and technology. With the exception of ECCN 9E003(h), “‘technology’ for the ‘development,’ ‘production,’ or ‘use’ of equipment controlled by 9A018,” all of these items also are subject to multilateral controls. Therefore, cooperation from foreign government enforcement agencies is useful in preventing and punishing violators.
As needed, the Department of Commerce consults with the Transportation Technical Advisory Committee, although there are no major changes envisioned to this control on the CCL.
In a September 28, 2004, Federal Register notice, the Department of Commerce solicited comments from industry on the effectiveness of U.S. foreign policy-based export controls. Comments were solicited from all six of the Department’s Technical Advisory Committees (TACs), which advise the Department, as well as from the President’s Export Council Subcommittee on Export Administration. Comments also were solicited from the public via the BIS Web page. The comment period closed on November 19, and 12 comments were received. A detailed review of all comments received can be found in Appendix I.
The United States has taken the lead in international efforts to stem the proliferation of sensitive items, urging other supplier nations to adopt and apply export controls comparable to those of the United States. The major industrial partners of the United States maintain export controls on almost all of this equipment and technology and control them as dual-use commodities. Pursuant to their agreement to establish a regime for the control of conventional arms and sensitive dual-use goods and technologies, the participants in the Wassenaar Arrangement have agreed to control these items (with the exception of 9E003(h) noted above, which the United States has not sought to control in Wassenaar) and to ensure that transfers of such items are carried out responsibly and in furtherance of international peace and security.
The U.S. Government has undertaken a wide range of diplomatic endeavors, both bilateral and multilateral, to encourage the proper control over these items, and has been successful in reaching multilateral agreement in the Wassenaar Arrangement to control most of these items. The United States has specifically encouraged efforts to prevent the unauthorized use or diversion of these items to activities contrary to U.S. national security and foreign policy concerns. However, these efforts do not replace the continued need for the additional control.
Although the United States has been the world leader in this technology, other countries produce “hot section” technology. Most countries that are producers of “hot section” technology are participants in the Wassenaar Arrangement and control these items (with the exception of 9E003(h) noted above) as dual-use items in accordance with their national licensing policies. The commitment of the U.S. Government and its Wassenaar partners to maintain controls reflects the cooperation among governments to reduce foreign availability.
