Today is the effective date of the Department of State’s final rule (with corrections available here) and the Department of Commerce’s final rule revising the export controls applicable to electronics. The new rules shift control of many electronics from the State Department’s International Traffic in Arms Regulations (ITAR) to the Commerce Department’s Export Administration Regulations (EAR), easing some of the regulatory burdens and hurdles faced by manufacturers and exporters.
The ITAR’s revised Category XI – Military Electronics now applies to a narrower, positive list of electronics, such as specific underwater hardware and radar systems. Revised Category XI is intended to control only those articles that are inherently military in nature or that provide a critical military or intelligence advantage to the United States and that are almost exclusively available from the United States. Those items not meeting such criteria generally now fall under new Export Control Classification Number (ECCN) 3×611 in the EAR. This is a broadly crafted ECCN that controls electronic parts and components, computers, telecommunications equipment, radar, and acoustic sensors.
Overall, the new rules should benefit U.S. manufacturers and exporters by shifting many items to the less rigid EAR regime. But some vestiges of the “old” ITAR remain. For example, revised Category XI(b) broadly controls electronics specially designed for “intelligence purposes” that collect, survey, monitor, or exploit the electromagnetic spectrum or are for counteracting such activities. However, the category does not define the exact scope of what constitutes intelligence purposes or otherwise contain language to limit the controls to a specific, small subset of military items.
As with other changes implemented as part of the Administration’s Export Control Reform Initiative, electronics manufacturers and exporters should carefully review these new rules to determine where their products and technology fall and make any necessary changes to their export compliance programs.