A senior lawmaker questioned yesterday if the Obama administration’s proposal to loosen rules for the export of some military equipment could result in U.S. equipment unintentionally ending up in China.
At issue is the administration’s multipronged export-control-reform initiative, unveiled in April 2010, which calls from moving some defense articles on the State Department’s U.S. Munitions List (USML) to the Commerce Department’s more-flexible Commerce Control List (CCL), with an ultimate plan to create one unified list and single licensing agency. The administration has published draft changes to five of the 21 categories of items on the USML, including those for military vehicles and aircraft (Defense Daily, Nov. 8, 2011).
House Foreign Affairs Committee Chairwoman Ileana Ros-Lehtinen (R-Fla.) at a hearing yesterday questioned the administration’s proposal to transfer military parts she said could be sensitive, such as software source code, from the USML to a new subcategory of the CCL called the “Commerce Munitions List” (CML).
Items on the CML list would need a license to be exported but would be eligible for a new license exception to 36 countries identified as allies.
Ros-Lehtinen argued “to be effective, however, country exemptions for the export of defense articles must incorporate critical safeguards, including agreement on which foreign parties can have access to controlled items and on foreign cooperation in enforcement.”
“These appear to be missing from the process set out by the administration,” she said.
She maintained that without such safeguards “country exemptions for defense articles are vulnerable to exploitation by gray market brokers, foreign intelligence entities, front companies, and even terrorists.”
She noted Europeans’ assistance to China with military acquisitions as well as concerns that allied nations could retransfer banned U.S. defense technologies to China.
Marion Blakey, president and chief executive officer of the Aerospace Industries Association (AIA), when asked about Ros-Lehtinen’s concerns, testified that “something that is illegal is illegal and (that) should not be changed.”
“What we’re looking for…is a system that is more efficient and transparent and will ultimately then enable us more resources, both in terms in scrutiny…and enforcement behind the illegal activities,” Blakey said.
Ros-Lehtinen cited additional concerns about the CML proposal, including that congressional notification would no longer be required for the export or retransfer of defense articles on it.
Lawmakers have proposed multiple legislative fixes to the current export-control regime.
Ros-Lehtinen introduced the “Export Administration Renewal Act” last June, legislation intended to expedite the process of removing the least-sensitive defense articles–such as bolts and cables–from the USML.
“Provided that manufacturing for such items will not be outsourced to China for later introduction into the U.S. military supply chain, Congress could reach a quick agreement to approve their removal from the USML,” she said.
House Foreign Affairs Committee Ranking Member Howard Berman (D-Calif.) also introduced a bill last year dubbed the Safeguarding United States Satellite Leadership and Security Act of 2011.
Blakely says the bill “aims to initiate practical, common sense legislative reforms” to address issues outlined in a new AIA report titled Competing for Space: Satellite Export Policy and U.S. National Security. The legislation would tweak the current law requiring communications satellites and components being the USML regardless of the countries that want to buy them.
Berman also has introduced the Technology Security and Antiboycott Act to replace the Export Administration Act (EAA), which dates back to 1979 and he dubs a “Cold War relic.”
He said his bill would focus on “current threats to U.S. security,” instead of on “economic warfare against long-gone adversaries,” which he said the EAA does.
AIA’s “Competing for Space” report, based on surveys of U.S. satellite firms, says more than 70 percent of small-business respondents reported losing “significant” sales because of the current export-control system. Two satellite-component firms reported combined annual losses of up to $7 million because of the current restrictions, according to AIA.