AIA, AIAA Applaud as Obama Administration Moves Forward on ITAR Reform

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The American Institute of Aeronautics and Astronautics (AIAA) and the Aerospace Industries Association (AIA) have both applauded efforts announced this week by the Obama Administration to continue reforming the nation’s restrictive ITAR export reform laws.

“AIAA applauds President Obama’s recently announced changes to the ITAR policy that will consolidate the export review process under one agency, and will better enable the flow of U.S. products into the international marketplace without compromising national security,” said AIAA President Mark Lewis.

“We are very pleased by the progress the administration is making in reviewing the U.S. Munitions List,” added AIA President and CEO Marion C. Blakey. “The restructured list shows great promise in assigning the appropriate level of protection to technology exports across all levels of risk.”

President Barack Obama outlined the Administration’s strategy for a streamlined and consolidated export review process in recorded remarks played during a Commerce Department conference on export controls on Tuesday. The President said the administration is moving ahead with the reforms that it can pursue without legislative approval:

Eventually, the administration wants to create a single control list run by an independent agency outside of the Commerce Department or State Department. It also wants to create a single enforcement agency. All three goals require congressional approval and are not expected to happen this year.

However, in his videotaped comments, Obama said he would sign an executive order giving U.S. Immigration and Customs Enforcement authority to coordinate enforcement of export controls now divided among several government agencies.

The administration is also moving licensing operations at the State Department, Commerce Department, Defense Department and other agencies onto a single information technology system. It does not need congressional approval for that.

Both the AIA and AIAA praised the Administration’s efforts as being necessary to restore American competitiveness in key high technology fields. Critics have argued that the regulations are too broad and have hurt U.S. manufacturers and built up competition abroard. Many foreign satellite builders are now advertising their products as “ITAR free.”

The AIAA statement reads:

The American Institute of Aeronautics and Astronautics (AIAA) applauds the Obama Administration’s recently announced reforms to national export control policies. The changes made to the International Traffic in Arms Regulations (ITAR) will streamline the technology export process for America’s aerospace and related component manufacturers, allowing them to compete more fairly in the world market.

“AIAA applauds President Obama’s recently announced changes to the ITAR policy that will consolidate the export review process under one agency, and will better enable the flow of U.S. products into the international marketplace without compromising national security,” said AIAA President Mark Lewis.

“Though well intentioned, existing ITAR regulations have sometimes stifled innovation in the U.S., and worked against national interests by encouraging foreign partnerships and creating competing industries overseas. AIAA appreciates the support of like-minded organizations, aerospace companies, and individual engineers and scientists in reaching out to the administration on this issue. In the end, I believe these reforms are a win for all who are concerned about the future of America’s aerospace community, as they will help open new markets while actually strengthening our national defense. We look forward to continuing our work with the Administration on export control policy reform.”

The changes create the Export Enforcement Coordination Center, which will use a single licensing process to review exports, rather than the current process under which exports are regulated by three oversight agencies with conflicting regulations. This will streamline approvals and provide more concise guidelines for product classification, so that up to two-thirds of existing products that ITAR now bars from trade will be allowed into the global marketplace. The reforms also consolidate all ITAR-related trade information into a single IT system, allowing more rapid communication between parties and further reducing the time needed for the review process. Industry experts estimate that the reforms will open up billions of dollars in trade for the American aerospace sector that existing restrictions had denied them.

The AIA also released a statement:

AIA strongly supports the initiatives on export control modernization the White House released today, and believe they constitute an important step in reshaping the export control system to better serve our national security.

“We are very pleased by the progress the administration is making in reviewing the U.S. Munitions List,” said AIA President and CEO Marion C. Blakey. “The restructured list shows great promise in assigning the appropriate level of protection to technology exports across all levels of risk.

In particular, the completed review of Category VII of the USML – Tanks and Military Vehicles – shows that about 74 percent of the 12,000 items licensed last year could have been safely processed under the less restrictive Commerce Control List. This indicates substantial potential savings in time and compliance costs to U.S. exporters in the future, with enormous benefits for our military and closest allies.

“The clarification and eventual consolidation of the Munitions and Commerce Control lists will have a dramatic impact on small- and medium-sized companies,” Blakey said. “These companies rarely have the resources to ensure compliance with the current export control regime. Simplifying the system offers them the opportunity to be more competitive in the international marketplace.”

The president’s initiatives also include consolidating licensing policies, export enforcement and information technology systems to make the export control licensing system more efficient.

“These initiatives will greatly improve our national security,” Blakey said. “Enhanced interoperability with friends and allies will increase our ability to defend our common interests, and better controls for truly sensitive items will help keep them out of the hands of our adversaries.”