Export Control Reform — 2014 in Review

As with all changes associated with Export Control Reform (ECR), the amendments to the ITAR and the EAR have resulted in the creation of positive lists of ITAR-controlled items in the USML while transferring the former military items to the new 600 Series and, in the case of spacecraft to the 500 Series, to the relevant Commerce Control List (CCL) category.

This summary reviews the key changes in order of USML category. Please keep in mind that this is a high-level overview. Those seeking to classify their items post-ECR of their category will be well advised to see expert advice and assistance.

Changes Common to All USML and CCL Categories

• Generic parts, components, accessories, and attachments that are specifically designed or modified for a defense article, regardless of their significance to maintaining a military advantage, have been removed from the USML. Instead, unless such items are enumerated on the revised USML, such items are controlled in their respective CCL category, either specifically enumerated in ECCNs XA6XX.y or potentially caught in ECCNs XA6XX.x. The USML now provides an enumerated generally positive list of parts, components, accessories, and attachments that are still controlled under the ITAR. The USML still contains, however, a number of “catch-all” categories for “specially designed” parts, components, accessories, and attachments for certain special defense articles.
• The Bureau of Industry and Security (BIS) has limited the use of license exceptions for the 600 and 500 Series. The Strategic Trade Exception (STA) is limited to only Country Group A:5 for the 600 and 500 Series and only when certain conditions are met related to the end use and end user. For example, end-users must be government end-users in the countries in question. To use the STA for certain 600 Series ECCNs and the 500 Series, users must submit a request via the BIS Simplified Network Application Process-Redesign (SNAP-R) system. Additionally, 600 Series items that are controlled for missile technology (MT) reasons may not be exported, re-exported, or transferred (in-country) under License Exception STA.
• There is no de minimis level for foreign-made items incorporating US-origin 600 or 500 Series items described in paragraphs .a through .x when destined for D:5 countries and no de minimis level for US-origin 600 or 500 Series items in paragraph .y when destined for E:1 countries or China.
• If items in the 600 and 500 series are specifically called out in Subcategory y, which is reserved for lesser 600/500 series items (such as galleys and lavatories for military aircraft), those items are controlled for anti-terrorism reasons only and require a license (assuming no prohibited end use of end-user) only to AT controlled countries (Cuba, Iran, Syria, North Sudan, and North Korea) and China.
• If items transferred to the 600/500 series are not called out in Subcategory y or enumerated in another part of the relevant 600/500 series, they likely fall under Subcategory x. Subcategory .x for the 600 and 500 Series are catch-alls for parts, components, accessories, and attachments specially designed for a commodity in the 600 or 500 Series. The BIS has clarified that forgings, castings, and other unfinished products that have reached a stage in manufacturing where they are clearly identifiable by mechanical properties, material composition, geometry, or function as commodities are controlled under the ECCNs for such commodities.
• The USML continues to control commodities even if not specifically enumerated in the USML, but are classified or are being developed using classified information.

Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, and Mines, USML Category IV. On July 1, 2014, the Directorate of Defense Trade Controls (DDTC) and the BIS implemented final rules for launch vehicles, guided missiles, ballistic missiles, rockets, torpedoes, bombs, and mines.

• Changes to Category IV transfer demolition blocks, blasting caps, and military explosive excavating devices from the USML to the CCL. Category IV continues to control certain rockets, space launch vehicles (SLVs), missiles, bombs, torpedoes, depth charges, mines, grenades, their launchers, and apparatus and devices specially designed for handling, controlling, activating, monitoring, detecting, protecting, discharging, or detonating such commodities. Also controlled under the USML are certain rocket, SLV, and missile power plants and non-nuclear warheads.
• Items moved to the CCL have been spread out in several ECCNs, including ECCNs 0Y604 and 9Y604, with references to other ECCNs. These new ECCNs are controlled for national security, regional stability, antiterrorism, and United Nations (UN) embargo reasons. In addition, certain ECCNs in Category 9 are controlled for missile technology reasons.

Explosives and Energetic Materials, Propellants, Incendiary Agents, and Their Constituents, USML Category V. On July 1, 2014, the DDTC and the BIS implemented final rules for surface vessels of war and special naval equipment.

• Because the catch-all for materials was removed, the USML now contains an explicit list of explosives and their mixtures; propellants, pyrotechnics, fuels and their mixtures, oxidizers, binders and their mixtures, additives, and precursors continue to be controlled under the ITAR. Items that have been moved to the CCL are in Category 1, as 1Y608 with the exception of some of the aluminum powder, hydrazine, and their derivatives, which are now in ECCN 1C111. The Category 1 600 Series is controlled for national security, regional stability, antiterrorism, and UN embargo reasons. Additionally, 1A608 and certain other ECCNs in the remaining product group categories are controlled for missile technology reasons.
• The BIS has also moved certain items, including equipment and software, for the production of explosives and solid propellants formerly in ECCNs 1B018.a and 1D018 and commercial charges and devices containing energetic materials formerly in 1C018, to the new Category 1 600 Series.

Surface Vessels of War and Special Naval Equipment, USML Category VI and Submersible Vessels and Related Articles, USML Category XX. On January 6, 2014, the DDTC and the BIS implemented final rules for surface vessels of war and special naval equipment.

• The USML now contains a specific definition of surface vessels at 121.15, which considerably narrows the surface vessels controlled under the ITAR. Specifically, surface vessels are US- or foreign-origin manned or unmanned warships or other combatant vessels, high speed air cushion vehicles with payloads over 25 tons, vessels integrated with or designed to support nuclear propulsion plants, armed vehicles or vehicles specially designed to deliver munitions or destroy or incapacitate targets, or vehicles that incorporate “mission systems” — defense articles that perform specific military functions, such as providing military communication, target designation, surveillance, target detection, or sensor capabilities — and remain subject to the ITAR. Notably, the DDTC has removed harbor entrance detection devices from the USML.
• Surface vessels no longer controlled under the ITAR have been transferred to Category 8 (Marine) of the CCL in ECCNs 8Y609 for each product group and are controlled for national security, regional stability, antiterrorism, and UN embargo reasons except paragraph .y, which is controlled only for antiterrorism reasons.
• Submersible vessels, such as submarines, formerly in USML Category VI are now in Category XX and include certain of their engines, motors, and propulsion plants. Submersible and semi-submersible vehicles no longer controlled under the USML are controlled in CCL Category 8 (Marine) in ECCNs 8Y620 for product groups A, B, D, and E and generally are controlled for national security, regional stability, antiterrorism, and UN embargo reasons.
• Gas turbine engines for vessels are not in Category 8, but instead are covered in ECCN 9A619 with gas turbine engines for aircraft. Certain non-magnetic diesel engines for both submersible and surface vessels are controlled in ECCN 8A609 because such engines are primarily used in surface vessels.

Ground Vehicles, USML Category VII. On January 6, 2014, the DDTC and the BIS implemented final rules for ground vehicles.

• Major changes to the USML include adding 121.4, which explicitly defines “ground vehicles.” Similarly, the CCL also defines ground vehicles in a note to the new ECCNs.
• Additionally, the DDTC has removed most manned and unmanned unarmored and unarmed military vehicles, unless such vehicles are specifically designed as firing platforms for weapons above .50 caliber, and armored vehicles, either unarmed or with inoperable weapons manufactured before 1956. Armed vehicles and vehicles that incorporate “mission systems,” as defined above, remain subject to the ITAR.
• The CCL includes five 600 series entries in Category 0 (Nuclear Materials, Facilities, and Equipment) as 0Y606, for ground vehicles, as well as their test, inspection, and production equipment, materials, software, and technology formerly on the USML. The majority of the new ECCNs are controlled for national security, regional stability, antiterrorism, and UN embargo reasons.

Military Training Equipment, USML Category IX. On July 1, 2014, the final rule for military training equipment was implemented.

• The DDTC eliminated “and Training” from the title of Category IX to clarify that training on a defense article is a defense service covered under the USML category in which the defense article is enumerated. Category IX continues to control specified training equipment and certain simulators.
• The BIS has added four new ECCNs in Category 0 (Nuclear Materials, Facilities, and Equipment) as 0Y614. ECCN 0A614 is a catch-all for any equipment specially designed for military training not elsewhere enumerated. Tooling and production equipment have been transferred to the CCL under ECCN 0B614. ECCNs 0Y614 are controlled for national security, regional stability, antiterrorism, and UN embargo reasons.

Personal Protective Equipment, USML Category X. On July 1, 2014, the final rule for personal protective equipment was implemented.

• The DDTC eliminated “and Shelters” from the title of Category X to clarify that shelters, formerly controlled under Category X(b), are now subject to the EAR and controlled as ECCN 1A613.b.
• Body armor and helmets that meet or exceed the National Institute of Justice’s Standard-0101.06 Type IV will remain on the USML, but NIJ Type III has moved to ECCNs 1A005 or 1A613. However, developmental NIJ Type III armor may still be controlled under the USML. In addition, anti-gravity suits, pressure suits, and atmosphere diving suits have been transferred to the CCL. Remaining on the USML are integrated helmets incorporating sights or slewing devices, specified accessories for optical sights or viewers, and an enumerated list of parts and components.
• The BIS added four ECCNs in Category 1 (Special Materials and Related Equipment, Chemicals, Microorganisms, and Toxins) as 1Y613 to contain items removed from the USML. These ECCNs are controlled for national security, regional stability, antiterrorism, and UN embargo reasons.
• The BIS has also amended the Temporary Imports, Exports, Reexports, and Transfers (In-country) (TMP) and Baggage (BAG) license exceptions to allow the export and re-export of certain personal protective equipment destined to or in Country Group D:5 in order to be aligned with the similar ITAR exemption.

Military Electronics, USML Category XI. The final rule for military electronics was implemented on December 30, 2014. 

• Military electronics that State and Commerce have transferred to ECCN 3A611 include radar, telecommunications, acoustic or computer equipment specially designed for military application and are not enumerated in the USML, high frequency surface wave radar, and application specific integrated circuits (ASICs) and programmable logic devices (PLDs) programmed for “600 Series” items, certain printed circuit boards assemblies, and multichip modules. The BIS has included all these items in 3A611 instead of creating new 600 Series ECCNs in CCL Categories (Computers), 5 (Telecommunications), 6 (Radar), and 7 (Avionics). Those Categories contain references to the Category 3 600 Series. Technology, software, materials, and equipment for these commodities are controlled under the related 3Y611 product groups. Other than the .y paragraph, which is only controlled for antiterrorism reasons, the remainder of Category 3’s 600 Series is controlled for national security, regional stability, antiterrorism, and UN embargo reasons.
• Certain microwave monolithic integrated circuit (MMIC) power amplifiers and discrete microwave transistors will be controlled as ECCN 3A001.b.2 and b.3 and not the 600 Series. In exchange for this reprieve, the BIS has added a control for NS1 except if the commodities are exported or re-exported for use in civil telecommunications applications.
• While the majority of Category XI consists of enumerated lists, XI(b) is a catch-all for electronic systems or equipment specially designed for intelligence purposes that collect, survey, monitor, or exploit the electromagnetic spectrum or for counteracting such activities. The corresponding CCL subcategory, 3A611.b is reserved for the time being.

Materials and Miscellaneous Articles, USML Category XIII. Final rules for materials and miscellaneous articles were implemented on January 6, 2014.

• The Departments of State and Commerce have moved certain materials and miscellaneous articles from the USML to several CCL categories. The BIS created five new ECCNs in Category 0 as 0Y617. However, former XIII(c), which controlled self-contained diving and underwater breathing apparatus, are now located in ECCN 8A620.f.
• ECCNs 0Y617 contain concealment and deception equipment, ferries, bridges, and pontoons specially designed for military applications or military use, test models for the development of defense articles controlled by USML Categories IV, VI, VII, and VIII, and metal embrittlement agents. Construction equipment specially designed for military use are captured in paragraph .y, which also includes specific parts, components, accessories, and attachments. Critically, there is no .x paragraph catch-all in 0Y617. ECCN 0Y617 is generally controlled for national security, regional stability, antiterrorism, and UN embargo reasons except for the .y paragraph items, which are controlled only for antiterrorism.

Spacecraft and Related Articles, USML Category XV. On November 10, 2014, the Departments of State and Commerce implemented final rules for spacecraft and related articles.

• The Departments os State and Commerce staggered the implementation of this rule in response to industry concerns highlighting the quickly evolving nature of microelectronic circuits. On June 27, 2014, controls on radiation-hardened microelectronic circuits currently in USML Category XV(d) and microelectronic circuits in Category XV(e) were transferred to the ECCNs 9A515.d and .e, and related software and technology transferred to 9D515.d and .e, respectively. On November 10, 2014, the rest of the proposed changes concerning all other spacecraft, satellite, and related items were implemented.
• The BIS has determined that spacecraft will be included in a new 500 series rather than a 600 series in Category 9 Aerospace and Propulsion, which recognizes the commercial nature of many of the items transferring to the 500 series.
• Commerce will treat licensing for the 500 series as it has done for the 600 series — there will be a policy of denial for China and Country Group E:1 (Cuba, Iran, North Korea, Sudan, and Syria), and license applications for Country Group D:5 will be reviewed consistently with ITAR § 126.1.
• Category XV contains a revised definition of “defense services” as applicable to spacecraft and satellite that is broader than the ITAR’s general definition of defense services as it may apply to the furnishing of assistance and training for spacecraft and satellite now subject to the EAR. Specifically, defense services as related to spacecraft and satellite include the furnishing of assistance, including training, in 1) the integration of a satellite or spacecraft to a launch vehicle, including both planning and onsite support, regardless of the jurisdiction, ownership, or origin of the satellite or spacecraft, or whether technical data is used; and 2) the launch failure analysis of a satellite or spacecraft, regardless of the jurisdiction, ownership, or origin of the satellite of spacecraft, or whether technical data is used.
• Generally, an ITAR-controlled item continues to be subject to the ITAR even if it is incorporated into a higher level assembly, making that assembly also subject to the ITAR. Manufacturers of ITAR-controlled spacecraft and satellite components are often unable to compete in the global market because their parts will “taint” the satellite or spacecraft into which these ITAR-controlled parts are incorporated. The Departments of State and Commerce have added notes to Category XV(a) and 9A515 respectively resolving this concern.

Nuclear Weapons Related Articles, USML Category XVI. The final rules for nuclear weapon related articles were implemented on July 1, 2014.

• This USML category has been overhauled significantly to eliminate most of the commodities and related technical data because the exports of items formerly enumerated in Category XVI are under the export control of the Department of Energy or the Nuclear Regulatory Commission. Category XVI continues to control modeling or simulation tools that model or simulate environments generated by nuclear detonations or the effects of these environments, related parts, accessories, equipment, and tooling, and related technical data and defense services.
• No related 600 Series has been added in relation to reforms of Category XVI. Nuclear radiation detection and measurement devices formerly controlled in XVI(c) are subject to the EAR under already existing ECCN 1A004.c.2 or 2A291.e.