Archive for the ‘USML’ Category

Aug

1

Federal Court Incorrectly Says DDTC Jumped the Gun on Gun Printing Plans

Posted by at 1:29 pm on August 1, 2018
Category: Arms Export • BIS • DDTC • USML

Printed Guns via http://defdist.tumblr.com/post/85127166199/i-have-often-been-asked-who-the-first-person-to-be [Fair Use]Just hours before Defense Distributed, pursuant to a Settlement Agreement with the Department of State’s Directorate of Defense Trade Controls, planned to upload plans to allow anyone who can afford a 3-D printer to make their own plastic guns, a federal district court in Seattle entered a temporary restraining order prohibiting the uploading of those plans.   The temporary restraining order was entered at the request of attorneys general from eight states and the District of Columbia.   In entering the order, the court stated that the plaintiffs were likely to prevail on the merits for two reasons — both, frankly, fairly questionable.

The first reason the court thought that plaintiffs would likely prevail is that, in the court’s view, the Settlement Agreement effectively removed items from the United States Munitions List (“USML”) without the prior thirty-day notice to Congress as required by section 38(f) of the Arms Export Control Act, 22 U.S.C. § 2278(f).  As you probably recall, DDTC and BIS so far have only issued proposed rules.   As noted early on in the export control process, State and Commerce indicated that they would provide the section 38(f) notices to Congress 30 days prior to publishing the final rule.  At this point, only the proposed rules have been issued and the comment period ended on July 9, so it is likely that no section 38(f) notices have been sent to Congress as the court states. Certainly they would not have been sent thirty days prior to the execution of the Settlement Agreement on June 29 as the Court said should have been done.

The problem with this argument is that the Settlement Agreement did not remove Category I (or any other) items from the USML.  The Settlement Agreement is quite clear that DDTC was not removing anything from the list but, rather, was granting an exemption under ITAR  section 125.4(b)(13).  Under that section, an export of technical data does not require a license if that data has been “approved for public release” by DDTC.  All that DDTC did in the Settlement Agreement was approve public release of specified Defense Distributed plans making their export eligible for the exemption in section 125.4(b)(13).  Nothing has been removed from the USML by the Settlement Agreement, and, thus, no section 38(f) notice was required as a result of the Settlement Agreement.

The other reason relied on by the district court in temporarily blocking the Settlement Agreement was the requirement in Executive Order 11958 that any removal of any item from the USML by DDTC would need the concurrence of the Department of Defense.  The court stated:

When the President delegated his authority under the AECA to the Secretary of State, he also imposed a requirement that any changes in designations of defense articles and defense services subject to export control had to have the concurrence of the Secretary of Defense. There is no indication that the federal government followed the prescribed procedures

Apparently, the district court had not bothered to read the initial notice from the Department of Commerce on the proposed removal of Category I firearms from the United States Munitions List to the Commerce Control List.   That notice clearly states:

The changes described in this proposed rule and in the State Department’s companion proposed rule on Categories I, II, and III of the USML are based on a review of those categories by the Department of Defense, which worked with the Departments of State and Commerce in preparing the amendments.

Oops.  So even if the Settlement Agreement effectively removed certain Article I items from the USML, which it did not, the DOD had already agreed to that prior to the publication of the initial notices proposing removal of those items.

The problem here is that if states or the federal government want to regulate 3-D gun plans, the export laws are not the way to do it because the policy driving these decisions has nothing to do with exports at all but rather with purely domestic considerations such as detectability and traceability.  The states attorneys general presumably don’t really care whether these gun plans and the plastic guns made from them wreak havoc in Croatia; they are worried about the consequences right at home in their own states.  Moreover, there is already a law on the books –  the Undetectable Firearms Act of 1988, 18 U.S.C. § 922(p) — which makes it illegal to manufacture undetectable weapons.  So, rather than try to shoehorn these issues into the Arms Export Control Act, lawmakers and officials should confront any issues with these plans directly.

 

 

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Copyright © 2018 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)
May

15

Export Control Reform Finally Announced for Guns and Ammo

Posted by at 7:04 pm on May 15, 2018
Category: BIS • CCL • DDTC • Export Reform • USMIL • USML

Guns by Al [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/6gPGbx [cropped]The Directorate of Defense Trade Controls and the Bureau of Industry and Security today announced the proposed rules for the long awaited export control reform of Categories I, II and III of the United States Munitions List.  The proposed rules for DDTC are here; the proposed rules for BIS are here.

Under the proposed rules, the only items remaining in Category I will be firearms that fire caseless ammunition, are fully automatic, or are specially designed to integrate fire control, automatic tracking, or automatic firing.  Other small arms that were once in Category I will be moved to 0A501 and 0A502.  Small arms that are on Category I of the USMIL will still be subject to the brokering rules of the ITAR even if they have been moved to 0A501 or 0A502.

These new proposed ECCNs will be controlled by, among others, RS1 and FC meaning that licenses will be required for all destinations.  (RS1 captures every country but Canada and FC captures Canada).  The BIS proposed rules also exclude the use of most license exceptions so that the new regime will closely parallel the available exemptions that were available under the ITAR.   So the result of the transition of these items from the USML to the CCL will mostly be a change in the agency with licensing authority.

There are a few significant changes, however, worth noting.  First, the proposed rules would eliminate a particular bugbear of mine relating to the classification of rifle scopes.  Currently, rifle scopes are ITAR if they are “manufactured to military specifications,” whatever that means.   Foreign manufacturers of rifle scopes routinely decline to state whether their scopes are Category I(f) or 0A987 and do not provide enough information to decide whether a particular scope is manufactured to military specifications.  Under the proposed rules, a scope is on the USML only if it has night vision or infrared capabilities that would cause it to be captured under Category XII.  Everything else is now 0A987.

Second, these new rules will reverse the questionable position that DDTC has taken in the Defense Distributed case.   In that case, DDTC argued that posting 3D gun plans on the Internet is an export of controlled technical date on Category I firearms to every foreign person with access to the Internet.  BIS has a somewhat different take on posting things to the Internet.   Here’s what the proposed BIS rules say:

The EAR also includes well-established and well understood criteria for excluding certain information from the scope of what is “subject to the EAR.” (See part 734 of the EAR.) Items that would move to the CCL would be subject to existing EAR concepts of jurisdiction and controls related to “development” and “production,” as well operation, installation, and maintenance “technology.” While controlling such “technology,” as well as other “technology” is important, the EAR includes criteria in part 734 that would exclude certain information and software from control. For example, if a gun manufacturer posts a firearm’s operation and maintenance manual on the Internet, making it publicly available to anyone interested in accessing it and without restrictions on further dissemination (i.e., unlimited distribution), the operation and maintenance information included in that published operation and maintenance manual would no longer be “subject to the EAR.”

Part 734 makes clear that publication of technology on the Internet is not an export of that technology to the rest of the world; rather it is a release of that technology from export controls.

Third, the new rules will eliminate the issue as to whether firearms training is a defense service that cannot be provided by a U.S. person to a foreign individual without a license.  Both the existing and latest proposed DDTC rule defining defense services would require a license to provide basic firearms training to a foreign individual.  (The latest proposed rule permits basic training but only if there is an approved license to export the firearm to that individual.)  The BIS analysis of this is somewhat different.  The BIS notice of proposed rulemaking somewhat wryly states:

The EAR does not include a concept of “defense services,” and the “technology” related controls are more narrowly focused and apply in limited contexts as compared to the ITAR.

In fact, of course, under the proposed rules training a foreign individual in firearms use would require a license only if it involved a control of technology covered by proposed ECCNs 0E501 or 0E502.  However, neither ECCN covers information related to the use of 0A501 or 0A502 firearms.   As a result, firearms training that would have required a license under the old rules will not require a license if the new rules are adopted.

Photo Credit: Guns by Al [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/6gPGbx [cropped]. Copyright 2009 Al

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Copyright © 2018 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)
Feb

21

Unhelpful Suggestion of the Day

Posted by at 6:36 pm on February 21, 2017
Category: BIS • CCL • Customs • DDTC • HTSUS • USML

Jardins Tuliere [sic] Statue by Eksley [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/dRYGik [cropped]

An interesting article [subscription required] in the Journal of Commerce reports survey results indicating that one-third of all U.S. e-commerce merchants report that they have incurred fines and delays from regulatory agencies in connection with their imports and exports.  Within that group, 29 percent of the companies surveyed stated that they had been subject to fines in connection with cross-border shipments. With respect to delays, they cited the Bureau of Industry and Security, and the Directorate of Defense Trade Controls, at 32 percent and 30 percent, respectively. That’s a surprising figure by any measure, if true and representative.

But more astonishing and surprising is the suggestion that the JoC article author proposes to fix this:

The task of ensuring trade compliance is also becoming more difficult, as 48 percent said they now do business in more than 50 countries.Trade regulations are constantly increasing and growing, necessitating agile and adept global trade management platforms, empowered by a combination of technology, trade compliance intelligence, and automation.

These systems can help properly classify goods based on descriptions from product catalogs, country of export, and country of import. Strong and reliable classification can help avoid hang-ups at Customs agencies. … In addition to helping avoid run-ins with these agencies, automation is helpful because it allows shippers to track the costs and length of these delays, allowing for better forecasting and business planning.

Don’t get me wrong, automation is often a good idea. But to suggest that the HTSUS, USML Categories or ECCN numbers can be assigned to a product through automation is, well, preposterous. It is something that can only be suggested by someone who has never looked at the USML, the CCL or the HTSUS. Maybe this will be possible sometime in the future when cars fly and robots are butlers. But right now, it’s not a feasible solution.

Photo Credit: Jardins Tuliere [sic] Statue by Eksley [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://flic.kr/p/dRYGik [cropped]. Copyright 2009 Eksley

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Copyright © 2017 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)
Oct

4

Export Control Reform For and By Dummies

Posted by at 10:34 pm on October 4, 2016
Category: DDTC • USML

Blue Hour Capitol Building

Having ignored the export control reforms initiated by the executive branch over the last seven or so years, the geniuses on the Hill have now decided to wade into the field with, as you might imagine, not entirely salubrious results. At the end of September, a bill was introduced in the House (with a companion bill in the Senate) to move most of Category I on the United States Munitions List (“USML”) over to the Commerce Control List (“CCL”). Specifically, it would move every firearm other than combat shotguns and firearms with special military application to the CCL.

There appear to be two motivations for this. First, this is an effort to exempt all gun manufacturers from the registration requirement (and associated fees) set forth in Part 122 of the United States Munitions List. Second, this is an apparent response to recent guidance by DDTC that tried to draw a distinction between manufacturing, which requires registration, and gunsmithing, which does not. Some critics claimed that some activities defined as manufacturing should be treated as gunsmithing instead.

The proposed legislation simply moves the items to the CCL but allows BIS the discretion to determine where on the CCL these items would go. BIS would be free to designate, and likely would designate, these moved items as 600 series items, which would result in a license requirement for all destinations. BIS would also be free to determine which, if any, license exceptions would be available. This means that it is unlikely, or at least possible, that the proposed legislation would not necessarily make it any easier to export arms; rather, it would only reliably eliminate the registration and fee requirement. Calling this the Export Control Reform Act, as the legislation styles itself, seems inapposite; a better name would be the Gun Manufacturer Financial Relief Act.

Photo Credit: Blue Hour Capital Building by Clif Burns, via www.clifburns.net. Copyright 2016 Clif Burns

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(No republication, syndication or use permitted without my consent.)
Feb

18

The Sledgehammer Exception

Posted by at 10:18 pm on February 18, 2015
Category: Arms Export • DDTC • ITAR • USML

Sanaá, Yemen by Rod Waddington [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Flickr https://www.flickr.com/photos/rod_waddington/16293960729[cropped]

When the Marines evacuated the U.S. Embassy in Sanaá, Yemen, there were reports that they left some of their weapons behind, in large measure because they were leaving on a commercial flight. At first the military said that crew-served weapons and machine guns were destroyed before departure, but that M-9 pistols and M-4 carbines were handed over to Yemenis before the boarded the plane.

Realizing that this was perhaps a giant SNAFU, the military later revised its story to take care of the pistols and the carbines

“Upon arrival at the airfield, all personal weapons were rendered inoperable in accordance with advance planning,” the statement said. “Specifically, each bolt was removed from its weapons body and rendered inoperable by smashing with sledgehammers. The weapons’ bodies, minus the bolts, were then separately smashed with sledgehammers.”

There you have it: nothing to see here because the military used the smashed-to-bits exception which authorizes a U.S. person to retransfer a defense article to a foreign end user as long as someone takes a sledgehammer to it first. You may be wondering if there is such an exception, and the answer is maybe yes and maybe no.

A few initial observations are in order. First, the Arms Export Control Act applies to the military and active duty troops just as it does to everyone else. Second, the ITAR prohibits unlicensed transfer of defense articles from one foreign end use to another foreign end use without a license. So, unless there is a sledgehammer exception, we have a problem here.

The only possible source for the sledgehammer exception is section 126.4, which states:

The approval of the Directorate of Defense Trade Controls must be obtained before defense articles previously exported pursuant to this exemption are permanently transferred (e.g., property disposal of surplus defense articles overseas) unless the transfer is pursuant to a grant, sale, lease, loan or cooperative project under the Arms Export Control Act or a sale, lease or loan under the Foreign Assistance Act of 1961, as amended, or the defense articles have been rendered useless for military purposes beyond the possibility of restoration.

At first glance, this appears to support the sledgehammer exception. The military says it rendered the bolts “inoperable.” The rest of the weapons, however, were just smashed. So, I think we don’t have to worry about the bolts, but did smashing the rest of the weapons with a sledgehammer render every other part and component of those weapons “useless for military purposes beyond the possibility of restoration”?  Those parts and components are defense articles in Category I(h) and each and every one of them needed to be sledgehammered beyond the possibility of restoration. That’s a lot of sledgehammering, and it seems to me unlikely that actually happened before the Marines hopped onto their flights out of Yemen.

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Copyright © 2015 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

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