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Wednesday, October 24, 2012

The U.S. Export Control System and the President’s Reform Initiative



Ian F. Fergusson
Specialist in International Trade and Finance

Paul K. Kerr
Analyst in Nonproliferation


Congress may consider reforms of the U.S. export control system. The balance between national security and export competitiveness has made the subject of export controls controversial for decades. Through the Export Administration Act (EAA), the Arms Export Control Act (AECA), the International Emergency Economic Powers Act (IEEPA), and other authorities, the United States restricts the export of defense items or munitions; so-called “dual-use” goods and technology—items with both civilian and military applications; certain nuclear materials and technology; and items that would assist in the proliferation of nuclear, chemical, and biological weapons or the missile technology used to deliver them. U.S. export controls are also used to restrict exports to certain countries on which the United States imposes economic sanctions. At present, the EAA has expired and dual-use controls are maintained under IEEPA authorities.

The U.S. export control system is diffused among several different licensing and enforcement agencies. Exports of dual-use goods and technologies are licensed by the Department of Commerce, munitions are licensed by the Department of State, and restrictions on exports based on U.S. sanctions are administered by the U.S. Treasury. Enforcement of export controls is conducted by these agencies as well as by units of the Department of Homeland Security (DHS) and the Department of Justice (DOJ).

Aspects of the U.S. export control system have long been criticized by exporters, nonproliferation advocates, and other stakeholders as being too rigorous, insufficiently rigorous, cumbersome, obsolete, inefficient, or any combination of these descriptions. In August 2009, the Obama Administration launched a comprehensive review of the U.S. export control system. In April 2010, Defense Secretary Robert M. Gates proposed an outline of a new system based on four singularities:


  • a single export control licensing agency for both dual-use and munitions exports, 
  • a unified control list, 
  • a single enforcement coordination agency, and 
  • a single integrated information technology (IT) system. 

The creation of a single control list has been the Administration’s focus to date. Interim steps have also been taken to create a single IT system and to establish an export enforcement coordination center. No specific proposals have been made concerning the single licensing agency.

In contrast to the Administration’s approach, legislation has been introduced to reauthorize or rewrite the EAA in the 112th Congress. The Export Administration Renewal Act of 2011 (H.R. 2122, Ros-Lehtinen) would renew the currently expired Export Administration Act through 2015, update its penalty and enforcement provisions, and provide stricter foreign policy controls on countries designated as state sponsors of terrorism. A separate title would amend the Arms Export Control Act to permit generic parts and components for defense articles to be controlled differently than sensitive defense articles on the U.S. Munitions List. By contrast, the Technology Security Act of 2011 (H.R. 2004, Berman) would rewrite the dual-use export control statute by giving the President the authority to control exports for national security and foreign policy reasons and to create the mechanisms for doing so. Each bill would, if passed, have implications for the President’s reform efforts. In addition, the National Defense Authorization Act for FY2013 passed the House of Representatives on May 18, 2012, with provisions to permit the President to determine the export control jurisdiction of commercial communications satellites and with notification requirements on the transfer of certain items from munitions to dual-use controls.

In considering the future of the U.S. export control system, Congress may weigh the merits of a unified export control system—the end result of the President’s proposal—or the continuation of the present bifurcated system by reauthorizing the present EAA or writing new legislation. In doing so, Congress may debate the record of the present dual-use system maintained by emergency authority, the aims and effectiveness of the present non-proliferation control regimes, the maintenance of the defense industrial base, and the delicate balance between the maintenance of economic competitiveness and the preservation of national security.



Date of Report: October 18, 2012
Number of Pages: 36
Order Number: R41916
Price: $29.95

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