U.S. Export Control Legislation and Authorities

The Arms Export Control Act (AECA) is the cornerstone of U.S. munitions export control law. The Department of State implements this statute by the International Traffic in Arms Regulations (ITAR). All persons or entities that engage in the manufacture, export, or brokering of defense articles and services must be registered with the U.S. government. The ITAR sets out the requirements for licenses or other authorizations for specific exports of defense articles and services. The AECA requires the State Department to provide an annual and quarterly report of export authorizations to Congress. Certain proposed export approvals and reports of unauthorized re-transfers also require congressional notification.

The Export Administration Act of 1979, as amended, authorizes the Department of Commerce, in consultation with other appropriate agencies, to regulate the export or re-export of U.S.-origin dual-use goods, software, and technology. The Department of Commerce implements this authority through the Export Administration Regulations (EAR). In addition to export controls agreed in the multilateral regimes, the Department of Commerce also imposes certain export and re-export controls for foreign policy reasons, most notably against countries designated by the U.S. Secretary of State as state sponsors of international terrorism, as well as certain countries, entities and individuals subject to domestic unilateral or UN sanctions. Additionally, the Department of Commerce administers and enforces regulations that prohibit certain trade and transactions with certain countries, entities, and individuals by U.S. persons or from the United States under the Trading with the Enemy Act and the International Emergency Economic Powers Act.

Various other U.S. agencies have licensing authority for different exports, for example:

  • Nuclear – Nuclear Regulatory Commission, Departments of Energy and Commerce
  • Trade embargoes & sanctions/Transactions – Department of the Treasury

Essential Elements of an Effective Export Control System

To effectively implement an export control system, a country must exhibit a broad national commitment to the endeavor. This commitment is first illustrated by making the political decision to adhere to international nonproliferation norms, as defined by various multilateral regimes, and engage solely in responsible arms transfers.

Second, a nation must establish a legal authority to control the export of defense-related and dual-use goods and technologies. This authority would adhere to six legal principles:

  • Comprehensive Controls
  • Implementing Directives
  • Enforcement Power and Penalties
  • Interagency Coordination
  • International Cooperation
  • Protection against governmental dissemination of sensitive business information.

Third, a country should implement regulatory procedures to support export control laws and policies. These procedures should establish clear lines of authority and provide for a list of controlled items. The control list should adhere to international norms (multilateral regime lists and their associated catch-all controls). The regulations should be clear and easily accessible to exporters in their description of licensing and enforcement policy. The designated authority administering the regulatory regime should review license requests for completeness and clarity. The regulations should encourage transparency and predictability of governmental decision making, and should give sufficient room for exceptions to policy in the interest of the government.

Fourth, proper enforcement measures should be built into the system. Preventive enforcement is essential, and should include established procedures related to export license applications (i.e. screening the proposed item, quantity, end-use and all parties involved in the transaction for any potential export) and compliance mechanisms (i.e. working in partnership with industry to educate them on how and why — to monitor and control their own export activity). The ability and authority to interdict and investigate illicit exports are necessary to implement an effective export control system. International cooperation can ensure full compliance with export legislation.

A Little Overview

The U.S. Government controls exports of sensitive equipment, software and technology as a means to promote our national security interests and foreign policy objectives. Through our export control system, the U.S. government can effectively:

  • Provide for national security by limiting access to the most sensitive U.S. technology and weapons
  • Promote regional stability
  • Take into account human rights considerations
  • Prevent proliferation of weapons and technologies, including of weapons of mass destruction, to problem end-users and supporters of international terrorism
  • Comply with international commitments, i.e. nonproliferation regimes and UN Security Council sanctions and UNSC resolution 1540

 

Building A Single Licensing Agency

Under the current export control system, three different USG agencies have the authority to issue export licenses: the Departments of State, Commerce, and the Treasury. In 2009, licensing agencies within these departments processed over 130,000 applications. In 2010 alone, the Department of Commerce processed approximately 22,000 applications. In some cases, exporters were required to apply for multiple licenses from separate departments.

The goal of the ECR Initiative is to create a Single Licensing Agency (SLA), which would act as a “one stop shop” for businesses seeking an export license and for the USG to coordinate review of license applications. The result will be a licensing process that is transparent, predictable, and timely.

For more information on this effort, please see the Department of Commerce’s export.gov website.