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Defense Treaties, Export Reform Move Ahead
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Jeff Abramson

The Senate last month provided its advice and consent to ratification of defense trade cooperation treaties with Australia and the United Kingdom, a step toward establishing license-free exports between the United States and the two countries.

The Senate’s Sept. 29 action, which was preceded by Senate and House approval of controversial legislation to implement the treaties, came a month after President Barack Obama and senior officials provided greater detail on their export control reform plans, including the results of efforts to apply their approach to an existing class of controlled items.

The treaties, signed in 2007 by the Bush administration, provide a framework for licensing exemptions for preapproved defense projects and firms. Supporters have argued that the accords will improve bilateral cooperation between allies. Secretary of State Hillary Rodham Clinton welcomed approval of the treaties, saying Sept. 30 that they would enhance “our ability to equip our armed forces with the best technology available in the most expeditious manner possible.”

For years, the treaties had stalled in the Senate Foreign Relations Committee, in part due to questions members raised about congressional involvement in the treaties’ implementing arrangements, which the Bush and Obama administrations had argued were outside congressional oversight. (See ACT, January/February 2010.) On July 14, Sen. Richard Lugar (R-Ind.), the panel’s ranking member, introduced legislation requiring congressional approval of changes to the implementing arrangements.

In announcing the measure, Lugar noted that “efforts by both the Bush and Obama administrations to develop a viable approach for implementing and enforcing the treaties without new legislation have been unsuccessful to date.” Sen. John Kerry (D-Mass.), the committee’s chairman, worked with Lugar to revise the legislation, which was approved by voice vote in the committee Sept. 21.

The legislation, approved in the Senate by unanimous consent Sept. 27 and in the House by voice vote Sept. 28, also establishes that violations of the treaties would be enforceable under the Arms Export Control Act (AECA). Because the treaties would create exemptions from existing law, experts had raised concerns about whether the AECA and the enforcement authority that flows from it would apply to treaty infractions.

The legislation also establishes limits on the treaties. It excludes from the treaty’s coverage certain items restricted by the Missile Technology Control Regime, as well as biological agents and articles and services related to the design and testing of nuclear weapons, controlled under the U.S. Munitions List (USML).

It sets out a number of reporting and notification requirements, including 15-day prior notification of certain exports to be made under the treaty. Those exports were defined in a Sept. 30 Department of State document as “proposed exports of defense articles and services that meet the dollar thresholds for notification in the Arms Export Control Act: $25 million for major defense equipment and $100 million for other defense articles and services.”

Although he supported the treaties, Sen. Russell Feingold (D-Wis.) expressed apprehension about a treaty-based approach to export reform, writ large. After the Sept. 21 committee vote, he said he was “very concerned that these treaties may make it easier for arms dealers to divert weapons to illicit purposes,” in part because license exemptions may remove the evidentiary trail U.S. enforcement officials “use to detect and prosecute the diversion of weapons.” He also criticized the treaties as an attempt to limit congressional oversight by going around the House, which has no constitutional role in treaty advice and consent.

“This approach should not become the norm. I urge the administration to rely on the regular legislative process to address any future, perceived deficiencies in our arms export regime,” Feingold added.

Export Reform Plans Fleshed Out

In his comments on the defense treaties, Feingold drew attention to the Obama administration’s broader export control reform effort, additional details of which were announced at the end of August. Instead of strengthening the export control regime, Feingold argued, “the administration appears to be moving in the opposite direction with a larger effort to decontrol the export of sensitive military equipment.”

In a video statement delivered Aug. 31 to an annual Department of Commerce export control conference, Obama cast the effort differently. He praised the reforms, saying that, “by enhancing the competitiveness of our manufacturing and technology sectors, they’ll help us not just increase exports and create jobs, but strengthen our national security as well.”

The reform effort, announced last year and further elaborated in April by Secretary of Defense Robert Gates, calls for a greater focus on a smaller set of items and for the consolidation of multiple agencies and export lists via four “singles”: a single control list, a single licensing agency, a single enforcement agency, and a single information technology (IT) system. (See ACT, May 2010.) In the revised system, controlled munitions and dual-use items, those with both military and commercial uses, would be assigned to one of three tiers. Tier assignment would be based in part on how widely available goods and technology are outside the United States, with different licensing policies at each tier.

Because creating a single licensing agency requires congressional action, the administration intends to apply the tier structure to the Department of State-administered USML and Commerce Department-administered Commerce Control List, with each agency retaining its licensing functions until a single agency is created. In an Aug. 30 White House press release and in speeches by senior officials at the Aug. 31 Commerce conference, the administration shared preliminary results of its efforts to apply this system to tanks and military vehicles, contained primarily in USML Category VII. Of the 12,000 items in that category licensed by the State Department last year, 42 percent would likely be moved to the Commerce list and 32 percent decontrolled altogether, according to the press release.

Of the 26 percent to remain on the USML, none would be assigned to the highest tier, which would generally require licenses and be comprised of items “that provide a critical military or intelligence advantage to the United States and are available almost exclusively to the United States” or that “are a weapon of mass destruction.” More than two-thirds of these remaining USML items—18 percent of the original total of 12,000—would fall into a revised USML second tier of items that “provide a substantial military or intelligence advantage to the United States and are available almost exclusively from our multilateral partners and Allies.” Items in this tier would be authorized for export to partners and allies using license exemptions or “general authorizations,” which do not require licenses for each export. The remaining USML items would fall into the third tier; such items “provide a significant military or intelligence advantage,” but are more widely available and would not require a license more broadly.

Positive Lists

The administration also elaborated on its intention to move toward a “positive list” approach. The press release defined a positive list as one that “describes controlled items using objective criteria (e.g., technical parameters such as horsepower or microns) rather than broad, open-ended, subjective, catch-all, or design intent-based criteria.” The positive list methodology is more characteristic of the Commerce Department’s approach than of the State Department’s, which considers whether an item is intended for military use.

The press release highlighted brake pads as an example, saying that pads for use in the M1A1 tank “are virtually identical to brake pads for fire trucks but the tank brake pads require a license to be exported to any country in the world, while the fire truck brake pads can be exported to virtually all countries without a license.”

Another emphasis of the review process has been to create “higher walls” around sensitive items and improve enforcement of U.S. controls. The White House release detailed what some of the steps in this direction might be, including additional end-use assurances and increased site visits in the United States and abroad. Assistant Secretary of Commerce for Export Administration Kevin Wolf indicated at the conference that new conditions may also be placed on exporters that use certain license exemptions envisioned in the system. Such conditions could include “destination control statements…reporting requirements that distinguish between end-users and distributors, and…recordkeeping requirements,” he said.

On other aspects of the “singles” approach, Obama promised to issue an executive order establishing a center that would coordinate enforcement across multiple agencies but not replace them. At the conference, Undersecretary of Commerce for Industry and Security Eric Hirschhorn indicated that IT system development is underway with the Department of Defense now operating a system that the State Department is expected to use in early 2011. “Commerce should be on board later in 2011, and other agencies to follow,” Hirschhorn said.

The administration did not detail when and which specific USML Category VII items would be tiered or decontrolled. It also has not elaborated on how other important military items that may be widely available but have exacerbated conflicts around the globe, such as shoulder-fired missiles or small arms and light weapons, might be specifically treated in this system.

There were indications, however, that the positive list approach still would contain some criteria that do not rely on the same sort of technical descriptions. Wolf said a designation of “specially designed” would be used “as a control criterion only when required by multilateral obligations or when no other reasonable option exists.” He indicated that some items could be added to the third tier by interagency consensus “for statutory, national security, foreign policy, or human rights reasons, or other multilateral obligations.”

The timetable for completing the reform effort remains unclear. Experts have said that review of other USML categories will be more difficult than the work on Category VII. Also, legislation to establish a single licensing agency has yet to be introduced.

The White House press release said the “goal is to begin issuing proposed revisions to the control lists and licensing policies later this year.”


Posted: October 6, 2010