Cargo Business News

February 2013

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By Sarah ReynoldS, american River International,, ComplianCe Export Reform: The slow march forward This past November, the Defense Trade Advisory Group held a meeting to discuss export control-related issues. The DTAG discussed the findings from three of its recent studies regarding trade in defense industrial goods. The first discussion laid out a list of industry priorities for export control reform; the second included a proposal for a new ITAR exemption; and a third was an examination of proposed changes to ITAR brokering rules. Assistant Secretary of State Andrew Shapiro presented keynote remarks and provided a status update for the Export Control Reform Effort. While it is coming along, I don���t believe we can expect any changes to come into effect anytime soon. The plan, part of President Obama���s overhaul of U.S. export rules, is being debated by several agencies and it could be months before a final rule is proposed, according to officials. At least two federal agencies, the Department of Homeland Security and the Justice Department, have expressed concerns that the changes in the export rules could make it easier for drug cartels and terrorists to obtain weapons and make it more difficult to stop firearms trafficking. An official from the Justice Department said that the proposal is an effort to improve national security by imposing controls on some exports while at the same time helping the nation���s allies. Currently, two export control lists are administered by two governmental agencies: the Department of Commerce and the Department of State. The lists are the Commerce Control List and the U.S. Munitions List, and are under different statutory authorities with different requirements. Under the proposed rules, some high-powered weapons, not including automatic or military weapons, could be moved from the Munitions List to the Commerce List, where they would be governed by fewer restrictions. Also in November, the U.S. Departments of State and Commerce published rules for the transition of certain items from Category XI of the U.S. Munitions List to the Commerce Control List. Category XI pertains to controls for a variety of ���Military Electronics��� and there will be a 60-day window for submitting comments that will close by the time this article is published. In August 2012, the State and Commerce Departments Corner C SupplyChain 17 published the public comments they received in response to the proposed change in the definition of the term ���specially designed��� within the context of the reform effort. These comments are now being studied in preparation for final publication and are available for review on government websites. The Export Control Reform improvements will make it easier for smaller American firms to participate in foreign markets and prove after-market support to allies who purchase U.S. systems. The Defense Department considers many parts and components of these systems to be less sensitive, so these items will be moved to the more flexible Commerce statutory authorities. This will make exporting to our allies easier, thereby increasing our exports. In the Export Control Initiative, the reform process is intended to develop a new single control list that will allow ��� The Export Control Reform improvements will make it easier for smaller American firms to participate in foreign markets and prove aftermarket support to allies who purchase U.S. systems. ��� the government to erect higher walls around the most sensitive items in order to enhance national security. Dealing with one list will surely make the license determination process easier, which in turn would assist the industry better understand the regulations leading to heightened compliance with U.S export rules and regulations. We all need to do our part to voice our concerns over faster export reform and reach out in advocacy to our representatives in Washington, D.C. Stay tuned as this process moves along���. February 2013

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