Get ready. On December 31, the Department of State, Directorate of Defense Trade Controls’ (DDTC) and the Department of Commerce, Bureau of Industry and Security’s (BIS) final rules revising the export controls on fire control, laser, imaging, and guidance equipment are set to go into effect. These rules are part of the Administration’s Export Control Reform (ECR) Initiative but are not subject to the typical six-month transition period, as the Administration tries to push through as many final ECR rules as possible before the end of President Obama’s term.
Category XII of the International Traffic in Arms Regulations’ (ITAR) U.S. Munitions List currently controls a broad basket category of fire control, range finder, optical, and guidance and control equipment. Although DDTC’s new final rule creates a more positive list of controlled items, it retains the Category XII controls on certain items, such as light detection and ranging (LIDAR), laser detection and ranging (LADAR), and range-gated systems; and binoculars, bioculars, monoculars, goggles, and head or helmet-mounted imaging systems (including video-based articles having a separate near-to-eye display) with an infrared focal plane array or infrared imaging camera, based solely on design intent, just as DDTC’s February proposed rule did. Indeed, seemingly contradicting a primary goal of the ECR effort, these Category XII items are controlled simply when they are originally developed for use by a military end-user (e.g., national armed services, national guard, national police, government intelligence or reconnaissance organization, or any person/entity whose actions or functions are intended to support military end-uses). Items developed for both military and commercial users or created with no specific end-user in mind will fall outside of the scope of this control, but companies will need contemporaneous documents to support the dual-use or non-military nature of their development efforts.
BIS’s companion rule makes several changes to the Export Administration Regulations (EAR) to add controls on the items that will shift from ITAR control. Export Control Classification Number (ECCN) 7×611 will now cover specified non-ITAR-controlled fire control, laser, imaging, and guidance equipment. Consistent with its February proposed rule, BIS is removing the special controls in the EAR on certain QRS-11 sensors to ease burdens on U.S. exporters, including the prior prohibition on use of the EAR’s de minimis rule for such sensors. At the same time, however, BIS has expanded controls on certain non-600 series cameras, systems, and related components that are intended to be used by a military end-user or to be incorporated into a foreign-made military commodity.
Overall, the final ECR rules on fire control, laser, imaging, and guidance equipment are a bit of a mixed bag and are not as expansive as the Administration’s reforms for many other types of products. Nonetheless, the effective date for the final rules is fast approaching, and impacted industries should gear up to incorporate and address these changes in their compliance programs.