The Arms Export Control Reform Talisman

by poblete

Friday, July 10, 2009 at 07:24 AM EDT

The Intelligence Authorization Act for FY 2010 requires that the Office of the Director of National Intelligence (ODNI) conduct a study of the efficacy of export control laws and regulations.

Judging from the Committee Report that accompanies the bill, HR 2701, it seems as if the request may have come from commercial satellite companies, and possibly some pockets in the government, that have long argued that “U.S. restrictions on the sale of commercial imagery are beginning to inhibit their growth and their competitiveness in foreign markets, especially as foreign imagery satellites improve and foreign reliance on U.S. systems diminishes.”

Reform of U.S. export control laws may be needed, but folks should keep in mind that complying and enforcing regulations is a two-way street that not only impacts the private sector, but the federal agencies as well. Having worked in Congress, this “phenomena” is not limited to export controls. With few exceptions, the agencies traditionally do not have sufficient resources to enforce the laws and regulations required of them by Congress. The export controls field touches the Commerce, State, and the Defense Department, as well as other agencies, has historically lacked resources and, at times, support from within the government.

While not taking a pro-State Department position, it is interesting that the Committee Report seems to be signaling conclusions that the primary problem is how the State Department has implemented and enforced the regulations. It states that the Department of State has managed the ITAR in a way that “defeats the premise of ITAR and causes a significant loss of market share in key industries for U.S. corporations.” Really? Is that not one of the reasons for this study?

The balancing act that must be done to secure U.S. technology from our enemies, while also not impeding the growth of commercial markets does not take place in a vacuum. Nor should this study. ”ITAR reform” has become a political talisman waved when one sector or group wants change. Such jujus should be cautiously waved. The onus for change needs to come from all parties, not just the State Department. These are no new issues, they have been debated since these laws were first enacted and will be debated for years to come.

It is not as if the State Deparment somehow ignores industry concerns, quite the opposite. The Arms Export Control Act (AECA) says it cannot and, in practice, it works closely with industry to try and make these laws and regulations work in a variety of ways. For example, the Defense Trade Advisory Group (DTAG) recently published a rather robust list of suggested substantive changes to various ITAR sections as well as list of new priorities. A list of proposed rule changes, including one for satellites, is also available for review here.

In addition to the ITAR report, the committee is also requiring the DNI to prepare two additional studies that are worth a mention. One involves a review of the illicit trade of nuclear and radiological material and equipment. The other involves a review of the global supply chain. Interestingly, these two reports are somewhat related to the ITAR study, yet it appears that they are to be completed independent of one another. That’s too bad. In practice these three issue areas meet up in the real world and a change or reform in one area could impact the others.