US move to ease dual technology export control

WASHINGTON - In a move that may benefit India, the United States plans to ease restrictions on selling products with military applications to foreign buyers as part of a restructuring of US export rules.

Aimed at boosting American competitiveness in the technology and manufacturing sectors and strengthen national security, President Barack Obama will announce the changes, which will create narrower and more consistent rules for defence, technology and aerospace products Tuesday.

“While there is still more work to be done, taken together, these reforms will focus our resources on the threats that matter most, and help us work more effectively with our allies in the field,” Obama will say in a video message to an export-control conference in Washington, according to a text released by the White House.

“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,” he will say.

Despite their growing strategic partnership, US has kept Several Indian technology companies on its Entities List, prohibiting any collaboration with US companies. India is also still on the watch list for transfer of a whole range of dual use technologies.

Under the current system, the State Department and the Commerce Department manage two different lists that define what items need to be controlled.

The munitions list, administered by the State Department, consists of items designated for the exclusive use of the military. The Commerce Department maintains a list of dual-use items which are commercial in nature but may be used by the military.

The bifurcated management “has caused significant ambiguity, confusion and jurisdictional disputes, delaying clear license determinations for months and, in some cases, years,” the White House press release stated.

Under the new approach formulated after a yearlong review by Defence Secretary Robert Gates, agencies will adopt a “tiered” system, with three levels, to determine what items should be subject to stricter or more permissive levels of control for different destinations, end-uses, and end-users.

Items in the highest tier are the most critical to the military and are therefore available almost exclusively from the US and items in the lowest tier provide a significant military or intelligence advantage but are available more broadly.

An Export Enforcement Coordination Centre will be established to carry out the planned reforms. The centre will have a mandate to improve enforcement and coordination between agencies and departments.

An administration analysis of the new approach shows the changes may reduce the number of items that will be subject to licensing. About 74 percent of the 12,000 items on the US Munitions List and the Commerce Control List, will be on the less-restrictive commerce list or not be subject to controls.

About one-fourth of the items would remain on the munitions list, but none would be put into the highest tier of licensing requirements that is being created.

(Arun Kumar can be contacted at arun.kumar@ians.in)