U.S. Lawmakers Question White House About Overhaul of Export-licensing System

May 13, 2011 - via Space News

WASHINGTON — A White House proposal to overhaul the U.S. export-licensing system could face an uphill battle against Republican leaders in the U.S. Congress who say a compelling case has yet to be made for a wholesale restructuring of the process, which strictly regulates the sale of military and dual-use technologies overseas, including U.S. commercial communications satellites and components.

In August 2009 the administration of U.S. President Barack Obama embarked on a far-reaching effort to reform the way federal government agencies review and process U.S. export license applications, a charge spearheaded largely by outgoing U.S. Defense Secretary Robert Gates.

But during a May 12 hearing of the U.S. House Foreign Affairs Committee, Rep. Ileanna Ros-Lehtinen (R-Fla.) said the administration’s plan to dramatically overhaul the export-licensing system would require new legislative authority to implement, and that a compelling case has yet to be made for such sweeping reform.

“The administration should reconsider this time-consuming exercise and focus on common sense reforms upon which we can all agree,” Ros-Lehtinen, who chairs the committee, said in opening remarks.

Ros-Lehtinen said she plans to introduce legislation this year that would subject generic parts and components on the U.S. Munitions List (USML), a roster of militarily sensitive items whose exports are licensed by the U.S. Department of State, to less-rigorous export controls.

“Unlike the breathtaking scope of the proposed administration reforms, this initiative can be implemented in a timely manner without precipitating institutional gridlock or sparking significant friction with the legislative branch,” she said.

Rep. Howard Berman (D-Calif.), the committee’s ranking member, said he welcomes and generally supports the administration’s export reform initiative and said Congress should give the president flexibility to determine how government agencies apply export controls to commercial satellites and related components. Last year, the House passed a bill introduced by Berman, H.R. 2410, that included a provision granting the president such authority, but the measure died in the U.S. Senate.

“I hope that the House will approve it again in this Congress,” Berman said.

Currently all U.S. satellites and related components reside on the USML, which means their exports are tightly controlled. Up until 1999, all but the most sophisticated commercial communications satellites were on the less-restrictive Commerce Control List (CCL), which is administered by the U.S. Department of Commerce.

An interim study by the Defense and State departments, which was released prior to the hearing, found that export licensing jurisdiction for most U.S. commercial communications satellites and related components could be transferred to the Commerce Department without posing much risk to national security.

“Based on the interim analysis, the risk associated with moving commercial [communications satellites] from the USML is manageable from a national security perspective, with a few narrowly defined exceptions,” states the interim report, “Risk Assessment of United States Space Export Control Policy,” which was delivered May 6 to key committees on Capitol Hill. “Therefore, at this time, with certain exceptions, conditions, and limitations, commercial [communications satellites], related components (including those components in common with military and civil government satellites), and information necessary for integration and launch of these satellites by foreign launch service providers, could be removed from the USML without posing an unacceptable security risk.”

The analysis goes on to say that if the president were given authority to remove satellite-related components from the USML, such items could be transferred to the CCL “under properly defined licensing and control conditions, such as interagency consensus on how these items are controlled, and the implementation of Special Export Controls (SECs) to mitigate potential risks to U.S. national security for export licenses issued by the [Commerce Department].”

In testimony before the House Foreign Affairs Committee, James Miller, principal deputy undersecretary of defense for policy, said removing satellites from the USML could help U.S. manufacturers regain their once-leading position in the global market.

“A couple of decades ago the United States had about a 75 percent market share globally of satellites,” he said. “We are down in the ballpark of 25 percent today. You see companies advertising USML-free satellite components; you know that you’ve got some thinking to do.”

Miller said the Obama administration is in the midst of an exhaustive review of items contained within Category 15 of the USML, which includes satellites and related components. Miller said the review is to be complete by July, and an updated final report to Congress is anticipated in the fall.

“While we think at this point there are a substantial number of items associated with commercial satellites that could be moved from the USML to the Commerce Control List, we expect that as we continue this review we will find a number of other items that are so widely available globally that we will feel comfortable exporting them and allowing our companies to compete better,” he said.

The review could lead to the creation of separate category composed of U.S. satellites and components that could be made available for export to U.S. allies only, he added.

External link: http://www.spacenews.com/policy/110513-question-overhaul-export-licensing.html

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Author:Amy Svitak