Export Control Reform: an Overview of President Obama’s Initiative

By August 1, 2012General
Globe image highlighting progress on the 3 phases

Charles Wray

First of three installments from the Deputy Assistant Secretary of the Army for Defense Exports and Cooperation (DASA (DE&C))

In August 2009, President Obama initiated a comprehensive review of the United States’ export control system to identify possible reforms. Although the United States has one of the most robust export control systems in the world, it is rooted in the Cold War era and must be updated to address the threats we face today and the changing economic and technological landscape.

The assessment, conducted by an interagency task force created at the direction of the President, included all departments and agencies with roles in export control. The task force report—known as Presidential Study Directive 8, published January 29, 2010—indicated that the U.S. export control system does not sufficiently reduce national security risk, based on the fact that its structure is overly complicated, contains too many redundancies, and tries to protect too much.

The task force reported that the system is based on two different control lists—the U.S. Munitions List (USML) and Commerce Control List (CCL)—administered by two different departments (the U.S. Departments of State and Commerce, respectively), three different primary licensing agencies, and a multitude of enforcement agencies with overlapping and duplicative authorities, using a number of separate information technology (IT) systems, none of which is accessible to or easily compatible with the others. Some of the agencies had no IT system at all that issues licenses.

Given the extensive list of controlled items, this fragmented system deals with almost 130,000 licenses per year. The volume of licenses dilutes our ability to adequately control those key items and technologies that must be protected for our national security.


In 2010, the Obama administration announced a comprehensive, three-phased approach to export control reform. As of August 2012, Phase I tasks are complete, and the administration is about halfway through implementation of Phase II.

Key Recommendation
The administration determined that fundamental reform of the U.S. export control system was needed in each of its four component areas, with transformation over time to consolidate the various elements into a single control list, a single enforcement coordination agency, a single IT system, and a single licensing agency.

In 2010, the administration announced a comprehensive, three-phased approach. As of August 2012, the export control reform (ECR) initiative has completed the Phase I tasks and is about halfway through implementation of Phase II.

In Phase I, the interagency stakeholders (DoD, State, Commerce, and the U.S. Departments of Energy, Treasury, Justice, and Homeland Security) made significant improvements to the export control system and established the control list framework necessary to create the new system, including preparing for a legislative proposal necessary to create a single licensing agency. This phase included implementing specific reform actions already in process and initiating reviews of new opportunities. Specific actions included the following.

• Control List: Refined and harmonized definitions to end jurisdictional confusion between the two lists, and established new criteria to screen items for control.
• Licensing: Implemented improvements to streamline licensing processes, and standardized policy and processes to increase efficiencies.
• Enforcement: Synchronized enforcement by creating an Export Enforcement Coordination Center (EECC).
• IT: Determined enterprise-wide needs and began the process to reduce confusion by establishing DoD’s USEXPORTS IT system as the single U.S. government license review tool.

In Phase II, deployment of specific Phase I reforms was completed, and new actions were initiated, contingent on completion of Phase I items. As of this writing, State and Commerce, in coordination with the other stakeholders, published Federal Register notices advising the public of results of the Phase I review (proposed definitional, scope, policy, and procedural changes) and solicited public comment on revisions being made to all the categories in the USML and corresponding controls in the CCL.

Not all groupings of technologies or items have completed the review process through to requests for public comment. (See related article, “Proposed Changes to Export Control of Certain Categories of the United States Munitions List,” on the discussions and progress of the proposed changes and anticipated impacts for the Army industrial base and others.)

When the proposed changes are implemented later this calendar year, a fundamentally new U.S. export control system will emerge. Congressional notification will be required to remove International Traffic in Arms Regulations (ITAR) controls and transfer items from the USML to the CCL.

• Control List: Create a new list of items that cascade from the USML and still merit a specific degree of export control due to international arrangement or the sensitivity of technology. The interagency process has resulted in drafting new parameters within the USML categories to clearly identify the technology being controlled by the ITAR, as well as creating new controls in the CCL for defense articles no longer subject to the ITAR.

This new element of the Commerce Department CCL harmonizes the overall effort as the administration moves to the objective of fewer controls. It also ensures that all items moving from the jurisdiction of the Department of State are initially controlled but that control is under the flexibility of the Export Administration Regulations. This will help ensure that the other objective of the ECR effort is met: to help provide support to close allies quickly.

Finalize the restructuring and synchronization of controls and definitions, apply redefined control criteria (especially the adoption of a new definition for “specially designed” by both regulatory departments), remove unilateral controls as appropriate, and submit proposals multilaterally to add or remove controls.

• Licensing: Complete transition to a revised export control list system and fully implement licensing harmonization.

• Enforcement: Export Enforcement Coordination Center (EECC) established and stood up, expanding outreach and compliance.

• IT: Final transition toward State and Commerce adopting USEXPORTS as the single electronic licensing system. Initial operational capability in both organizations is scheduled by the end of this month, based upon rule sets and license review functionality.

In Phase III, the transition to the new U.S. export control system will be completed. Legislation will be required for this phase to create a single licensing agency.

• Control List: Begin restructuring the two lists so that in the future, they can be merged into a single list. Implement a systematic process to keep current.

• Licensing: Establish a single licensing agency.

• IT: Implement a single, enterprise-wide IT system (both licensing and enforcement) with the rest of the interagency group (Departments of Energy and Transportation).

ECR has presented a complex, multifaceted challenge to all stakeholder agencies. It is slightly behind schedule but has yielded outstanding progress in reconciling decades-old issues of control definitions, jurisdiction, and harmonization or synchronization between export control lists. In addition, the process of review has substantially improved communication between stakeholder agencies. The public response so far to ECR Federal Register notices has been helpful and positive. It is anticipated that all initial draft Federal Register notices will be published for comment by the end of this year.

NEXT: Implementing Security Cooperation Reform


  • Charles Wray serves as a Special Assistant to the DASA (DE&C). He is Level III Security Assistance certified, and has worked in security cooperation staff and management roles with the Office of the Secretary of Defense, the Joint Staff, Supreme Headquarters Allied Powers Europe, U.S. European
    Command, the U.S. Embassy in Portugal, and the Department of the Army.

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