Arms Control and International Security Papers

Volume I, Number 13 | July 24, 2020

The New U.S. Policy on UAS Exports: Responsibly Implementing the MTCR’s

“Presumption of Denial”

and effective in an age of rapidly advancing technology, the
United States’ patience was not going to be unlimited.

To repeat, the United States still hopes to gain support
for the proposed MTCR reform. In the interim, however,
we are not willing to sit on our hands as the technological
mismatch between MTCR standards and the modern era of
UAS technology erodes the effectiveness of the regime,
works against the interests of the MTCR partners, and
impedes progress in the world’s ability to take advantage of
low-WMD-threat UAS for a wide range of commercial and
governmental purposes.

Ill. The New U.S. National Policy

Accordingly, the United States is now implementing a
new national policy on the export of Category | unmanned
aerial systems. This policy does not derogate from MCTR
principles; it is, in fact, entirely consistent both with the
letter and with the spirit of the MTCR Guidelines. We are
taking this step within the MTCR framework and in
accordance with its principles, for it is an extremely
valuable regime in which we continue to be a participant
and of which we remain a very strong supporter. What we
are doing is merely to build out a balanced and nuanced
national policy within the MTCR framework that will — at
least with regard to U.S. exports, anyway — help address
the problems of regime implementation that have become
so clear in recent years.

A. Implementing the Presumption of Denial

The key to understanding this new U.S. policy is to
remember how the MTCR operates. As noted earlier, the
Guidelines specify that for Category | items, “there will be a
strong presumption to deny such transfers.” The critical
point here, however, is that this is not a prohibition upon all
such transfers: there is merely a presumption that Category
litems will not be exported. (The closest the MTCR comes
to an actual prohibition is with regard to the transfer of
production facilities. “Until further notice,” the Guidelines
provide, “the transfer of Category | production facilities will
not be authorised.”) All transfers are to be assessed ona
case-by-case basis, and — with it being “understood that
the decision to transfer remains the sole and sovereign
judgement of the Government” — while all MTCR partners
are expected generally to refrain from Category | exports, it
has always been permissible to make a Category | transfer
when there is a compelling reason to overcome the
presumption of denial and such a step is well justified in

terms of the nonproliferation factors specified in the MTCR
Guidelines.

There is nothing novel or shocking about operating on
the basis of rebuttable presumptions. In implementing
U.S. national security export controls, for instance, we use
“presumptions of denial” quite frequently. For instance,
after we placed the PRC telecommunications company
Huawei on the U.S. Commerce Department's Entity List
and adopted changes to the Foreign Direct Product Rule
with regard to the use of U.S.-origin semiconductor design
tools to produce chips for that company, we also adopted a
“presumption of denial” policy for many types of transfer to
Huawei.

In the modern world, the most famous presumption of
all may be the fabled “presumption of innocence” in
criminal law — that is, the principle that one should be
presumed innocent of wrongdoing until actually proven
guilty. This maxim was apparently first articulated in U.S.
Supreme Court case law with the 1895 case Coffin v. United
States (156 U.S. 432), but it seems to find its earliest
expression in the writing of the medieval French scholar
and cleric Johannes Monachus, who when analyzing an
ecclesiastical pronouncement of Pope Boniface VIII
formulated the maxim in Latin: item quilibet presumitur
innocens nisi probetur nocens. Most people have probably
never heard of Monachus, but they know this principle well.

As the example of the “presumption of innocence”
makes clear, however, the central feature of any such
presumption is that it can be overcome. (If not, it wouldn't
be a presumption at all, but rather just an ordinary rule.)
“Rebuttability,” if you will, is therefore inherent in the
concept of a presumption, and is quite essential to it.
There would be no criminal justice system at all, for
example, if the presumption of innocence could not be
overcome by appropriate evidence, and it is a central
purpose of criminal procedure to provide a fair, effective,
and accountable system for determining when that can be
deemed to have occurred.

Strangely, however, given the role of the “strong
presumption of denial” as the touchstone for MTCR policy
vis-a-vis Category | transfers, participants in the Regime
have not been very forthcoming about cases, if any, in
which they regard the presumption as having been
rebutted. A general reluctance to rebut the presumption is
certainly understandable in light of the Regime’s central
focus on preventing or impeding missile proliferation and
thereby preventing the spread of WMD, but in practice it


Arms Control and International Security Papers

Volume I, Number 13 | July 24, 2020

The New U.S. Policy on UAS Exports: Responsibly Implementing the MTCR’s

“Presumption of Denial”

Il. The U.S. MTCR Reform Proposal

For these reasons, the United States in March 2018
proposed an adjustment to the MTCR controls that would
carve out a carefully selected subset of Category | UAS for
treatment as if they were Category Il systems. As first
proposed, this subset was to be based upon a speed
threshold, allowing more lenient treatment for those UAVs,
other than cruise missiles, based on a representative
maximum speed value of less than 800 kilometers per
hour,” and with appropriate end-use statements and end-
user assurances, including that these systems will not be
used for the delivery of weapons of mass destruction.? In
effect, this proposed MTCR reform would have updated the
framework to “allow more permissive treatment of run-of-
the-mill, basically non-WMD-related modern UAS that are
useful, and indeed in today's world all but essential, for a
range of non-WMD military and an exploding universe of

peaceful civilian applications.”

Nothing we were proposing would have relaxed MTCR
standards applying to high-threat systems such as cruise
missiles, advanced unmanned combat aerial vehicles
(UCAVs), or hypersonic aerial vehicles. Our proposal
included only the lower-threat systems — such as ordinary,
slow, fixed-wing UAS, along with rotary wing systems and
lighter-than-air craft — that would become subject to
Category Il treatment. And even transfers of these
comparatively unproblematic systems would remain
subject to careful nonproliferation considerations, pursuant
to well-established MTCR principles. Lower-threat systems
would also be covered by the new standards of
international conduct that we are currently negotiating in
order to cover the uses of UAS, especially armed UAS.

Allin all, we judged that this proposal would protect
what needed to be protected in the MTCR framework,
while allowing a degree of relaxation for transfers of lower-
threat systems in order to permit all of mankind better to
take advantage of the myriad ways in which such systems
are increasingly used for great benefit both in
governmental applications and in the private sector.

“In fact, by helping preserve or increase the market
share and international engagements of MTCR
partners who do approach all such questions with real
nonproliferation integrity — at the expense of
unscrupulous suppliers who have hitherto been
benefiting from overly rigid MTCR rules and unless the
system is reformed will continue to do so — the more
flexible approach we propose would likely have net
nonproliferation benefits rather than costs.”

We thought this reform proposal made eminent sense,
and over more than two years we have worked diligently to
build support for it among the 34 other MTCR Partners
through a series of diplomatic engagements at various
levels, from highly technical experts up to senior policy and
political leaders. These issues have been discussed and
debated, for instance, at five MTCR Technical Experts
Meetings, two meetings of the regime’s Reinforced Points
of Contact forum, and two meetings of the full MTCR
plenary, not to mention in innumerable bilateral
engagements. We have also repeatedly made technical
changes and various other adjustments to our reform
proposal in response to issues raised and ideas suggested
by other MTCR partners.

Nevertheless, the MTCR is a consensus-based
organization, in which even a single country — such as, for
instance, a bellicose geopolitical revisionist — can hold up
even the most sensible reform indefinitely. We are pleased
that many of our MTCR partners have supported our
reform proposal, but it has become clear that thanks to
foot-dragging by some, it is not yet possible to amend the
MTCR controls by agreement.

This is certainly disappointing, because for all of the
reasons outlined above, it would have been far better for
the regime if the U.S. proposal had been adopted. We will
certainly keep trying, and perhaps indeed the last of our
recalcitrant MTCR partners will in time come around.
Nevertheless, as then-NSC Senior Director Tim Morrison
and | made quite clear at Hudson Institute in February 2019,
as we have sought to update the MTCR and keep it relevant

? For these purposes, maximum airspeed would have been defined as the vehicle true velocity under zero wind conditions relative to the
direction of flight as determined using ICAO standard atmosphere as corresponds to the never-exceed speed or maximum operating limit
speed (for turbine engine-powered UAV systems) or never-exceed speed consistent with airworthiness standards, such as NATO STANAG
4671, or for equivalent manned aircraft, such as FAR Part 23. This approach for determining the maximum airspeed values aimed to take
advantage of existing UAV/aircraft airworthiness standards to provide specificity to exporters and licensing officials.

3 Subsequent negotiations with MTCR partners led to a modification of the original U.S. proposal, such as by changing the speed threshold to
700 km/h and exempting UAS specially designed for stealthy applications.


Arms Control and International Security Papers

Volume I, Number 13 | July 24, 2020

The New U.S. Policy on UAS Exports: Responsibly Implementing the MTCR’s

“Presumption of Denial”

would appear that most observers and participants have
just assumed that the “strong presumption of denial” is not
actually a presumption at all, but rather a simple
prohibition. Yet that assumption is a category mistake: a
confusion which flies in the face of the clear text and
structure of the Guidelines.

The new United States policy on Category | UAS
exports thus attempts to set forth a careful and balanced
approach, within the MTCR Guidelines, that for the first
time offers a clear explication of certain circumstances in

which the “strong presumption of denial” can be overcome.

B. The New Approach

Under this new approach, the United States has
determined that the “strong presumption of denial” for
MTCR Category | UAS transfer will be overcome for a
subset of unmanned aerial systems with a maximum
airspeed of less than 800 kilometers per hour.’ This new
policy will change nothing with regard to how we handle
UAS that present higher risk for WMD delivery — such as
cruise missiles, hypersonic aerial vehicles, and advanced
UCAVs — which will continue to be treated pursuant to
traditional “strong presumption of denial” approaches
under which they are effectively non-exportable except on
rare occasions. Our new approach will merely mean that
we will approach lower-threat, low-speed UAS somewhat
more flexibly, and treat them as Category Il systems. Nor
will this mean that transfers of these systems will be
subject to a strong presumption of approval; proposals will
be evaluated on their individual merits.

So let me stress what will not change. All transfers will
continue to be subject to careful case-by-case
consideration prior to transfer, which will include an
assessment of the risk of controlled items falling into the
hands of unauthorized end-users, irresponsible actors,
state adversaries, and terrorists. We will also continue to
demand appropriate end-use and end-user certifications,
as well as end-use monitoring wherever appropriate, and
we will evaluate all transfers against the MTCR Guidelines.
All military UAS transfers will continue to be subject to a
State Department-led assessment under the U.S.

Conventional Arms Transfer (CAT) Policy, as well as to a
Defense Department-led assessment regarding technology
security, as applicable. And all civil UAS exports will
continue to be subject to the licensing requirements and
policies of the Export Administration Regulations, which
includes an interagency review.

As before, we will also continue to assess the impact of
a proposed transfer in terms of the recipient's existing
capabilities, including its pursuit of WMD or missile and
space programs that could contribute to WMD delivery
systems; if a system is judged likely to be intended for
WMD delivery, the transfer will, of course, be denied. We
will also continue to require as a condition of transfer that
the recipient not arm an unarmed UAS with a foreign or a
U.S. weapon without express prior U.S. Government
authorization. Additionally, consistent with the MTCR
Guidelines, we will continue to deny transfers of production
facilities and technology for the development or production
of complete MTCR Category | UAS.

Consistent with the MTCR Guidelines and the
standards they recommend for evaluating proposed
transfers, the United States will continue to approach each
transfer — including for UAS with maximum speeds of at
least 800 km/h that are MTCR Category | systems and not
eligible for Category II-type treatment — as a whole-of-
government decision that takes into account all relevant
factors and policies, including U.S. national security,
nonproliferation, and foreign policy objectives, as well as
the recipient country’s capability and willingness effectively
and responsibly to use and safeguard U.S.-origin
technology.

Nothing about this decision will result in any
derogation from existing high U.S. standards for thinking
about Category | transfers. Where an end-use country
maintains strong export controls and nonproliferation
practices consistent with MTCR standards, for example —
and where it is a member in good standing of major
nonproliferation treaties and export control regimes, or
unilaterally adheres to the MTCR and other standards of

4 This value of 800 km/h covers a wide range of UAS systems for intelligence, surveillance, and reconnaissance (ISR) missions, or to support
counterterrorism or border security. This speed value also excludes hypersonic aerial vehicles and most UCAVs, and is also below the
speeds of known cruise missiles. The 700 km/h maximum speed limit value in our current revised proposal for reforming the MTCR controls
was proposed as a compromise to provide an additional gap between the maximum speed level for Category II treatment of UAVs and the
speeds of known cruise missiles. Since the new U.S. UAS Export Policy does not apply to cruise missiles, however, such an additional gap in
maximum speed is not required — and hence our national policy will use the 800 km/h standard.


Arms Control and International Security Papers
Volume | | Number 13
July 24, 2020

The New U.S. Policy on
UAS Exports: Responsibly
Implementing the MTCR’s
“Presumption of Denial”

by Christopher A. Ford

The Arms Control and International Security Papers are produced by the Office of the Under Secretary of State for Arms Control
and International Security in order to make U.S. State Department policy analysis available in an electronically-accessible
format compatible with “social distancing” during the COVID-19 crisis.



Arms Control and International Security Papers

Volume I, Number 13 | July 24, 2020

The New U.S. Policy on UAS Exports: Responsibly Implementing the MTCR’s

“Presumption of Denial”

best practice — that country will tend to rate higher in our
evaluation process.

Similarly, countries that demonstrate serious and
effective nonproliferation practices, including refraining
from or stopping transactions of proliferation concern,
complying with proliferation-related U.N. Security Council
sanctions, and not engaging in trade with entities
sanctioned under U.S. laws, will also generally rate more
highly. It will also be a positive factor where a country is a
mutual defense treaty ally, participates with the United
States in coalition operations, or has a positive track record
of responsibly using U.S.-provided defense articles in
accordance with the conditions of their sale.

The United States will continue to abide by its MTCR
commitments, including those related to pre-notifying
MTCR Category | transfers. We will also continue to lead in
the development of responsible standards of behavior in
UAS export and use, such as by pressing more countries to
join the “Joint Declaration for the Export and Subsequent
Use of Armed or Strike-Enabled [Unmanned Aerial
Vehicles]” and to commit to further developing
international standards for the export and subsequent use
of armed UAS.

Arms Control and International Security Papers

This new U.S. approach is thus a national policy
entirely consistent with the MTCR, a regime that we
continue strongly to support. As | put it in February 2019,

“We have been steadfast proponents of the MTCR
from its beginning, and holding ourselves and
international partners to its standards of
nonproliferation ‘best practice’ is an important and
enduring aspect of our approach to nonproliferation
and the preservation of international peace and

security against the destabilizing spread of systems
capable of delivering weapons of mass destruction. We
remain steadfast in our commitment to the MTCR.”

We are proud of our new approach, and the fidelity to
the MTCR that it represents, even as we adjust responsibly
to technological change. As we move to protect and
advance U.S. interests and allow more recipients to take
advantage of the expanding range of proliferation-
responsible UAS applications that are becoming available,
therefore, we look forward to continuing to serve as a
model of MTCR implementation and transparency.

The Arms Control and International Security Papers are produced by the Office of the Under Secretary of State for Arms Control
and International Security in order to make U.S. State Department policy analysis available in an electronically-accessible
format compatible with “social distancing” during the COVID-a9 crisis.



Arms Control and International Security Papers
The New U.S. Policy on UAS Exports: Responsibly Implementing the MTCR’s
“Presumption of Denial”

Volume I, Number 13 | July 24, 2020

The New U.S. Policy on UAS Exports: Responsibly
Implementing the MTCR’s “Presumption of
Denial”

by Christopher A. Ford?

In this ACIS Paper, Assistant Secretary Ford recounts the United States’ effort to
reform the Missile Technology Control Regime (MTCR) controls with respect to
a subcategory of Unmanned Aerial Systems, and explains the new U.S. national

approach to implementing the MTCR’s “strong presumption of denia

I" for

proliferation-responsible transfers of “Category I” items under the MTCR

Guidelines.

The Missile Technology Control Regime (MTCR) is an
association of partner countries united by their subscription
toa series of political commitments recognizing the
importance of restraint in transfers of nuclear-capable
ballistic missiles and cruise missiles, which are defined for
MTCR purposes as systems that are capable of delivering at
least a 500 kilogram payload to a range of at least 300
kilometers. The discussions that led to the MTCR’s
formation began in 1983, among France, Germany, Italy,
the United Kingdom, and the United States. These five
countries — joined by Canada and Japan — formally
announced the creation of the MTCR in April 1987. It now
has 35 participating governments.

For most of its history, the MTCR has functioned quite
well. First, Partners who make up the MTCR have acted
with much more restraint than would surely otherwise have
been the case, while the MTCR has also has served as the
de facto missile nonproliferation standard globally and the
example that even responsible governments not in the
Regime have looked to follow. While there unfortunately
has been all too much missile proliferation in the world, the

worst of it has been — and continues to be — from MTCR
non-partners, such as: North Korea, with its track record of
selling missiles and related to technology to any country
willing to pay for them; Chinese entities that continue to
act as the major source of missile-related equipment to
programs of proliferation concern in Iran, North Korea,
Syria, and Pakistan; and Iran, with its egregious and
ongoing transfers of missile technology to Lebanese
Hizbollah terrorists and to Houthi militia groups in Yemen.
We continue to work with countries to call attention to the
problem of missile proliferation and urge them to take
steps to address it. We do this bilaterally, through our
participation in the MTCR, and through other appropriate
international fora. For example, last November the U.S.
and Poland convened a working group meeting of the
Warsaw Process to draw attention to these problems and
urge the international community to do more to keep such
missile proliferation from further destabilizing the Middle
East.

2 Dr. Ford serves as U.S. Assistant Secretary of State for International Security and Nonproliferation, and is additionally performing the duties of
the Under Secretary for Arms Control and International Security. He previously served as Special Assistant to the President and Senior Director
for Weapons of Mass Destruction and Counterproliferation on the U.S. National Security Council staff.


Arms Control and International Security Papers

Volume I, Number 13 | July 24, 2020

The New U.S. Policy on UAS Exports: Responsibly Implementing the MTCR’s

“Presumption of Denial”

I. The Challenge of Keeping the Regime Up to
Date

As | pointed out at an event at Hudson Institute in
February 2019, however, the 1980s-era technological
benchmark built into the MTCR Guidelines — that is, the
“500 kilograms to 300 kilometers” definition — has not
fared well in recent years. Dramatic advances in unmanned
aerial systems (UAS) have led to a great explosion in the
capabilities and beneficial uses of so-called “drone” aircraft
that technically meet this definition, but which in no way
present the kind of nuclear weapon delivery threat that the
MTCR was established in order to help forestall. As applied
to many UAS, in other words, the MTCR is gravely out of
date.

This mismatch presents a real challenge to the efficacy
and the future of the MTCR regime, for the MTCR
Guidelines call for partners to follow a “strong presumption
of denial” for transfers of so-called “Category |” items —
that is, such things as

“complete rocket and unmanned aerial vehicle systems
(including ballistic missiles, space launch vehicles,
sounding rockets, cruise missiles, target drones, and
reconnaissance drones), capable of delivering a
payload of at least 500 kg to a range of at least 300 km,
their major complete subsystems (such as rocket
stages, engines, guidance sets, and re-entry vehicles),
and related software and technology, as well as
specially designed production facilities for these
items.”

With respect to actual missiles and rockets, or the sort
of high-performance cruise missile that would most likely
be used deliver a nuclear weapon, this makes good sense.
For far less capable varieties of UAS, however, the
presumption of denial has the effect of shutting MTCR
partners out of an important, growing, and (in nuclear
weapons terms) quite non-threatening UAS market, while
leaving non-partners free to sell whatever they wish to
whomever they wish.

This is a net loss not just for the MTCR Partners
themselves, but also for the cause of nonproliferation: in
practice, the market for such non-threatening UAS is ceded
to the least proliferation-responsible international players.
No one intended the MTCR to be a marketing tool for
missile brokers such as the PRC or Iran, but thanks to the
MTCR’‘s rigidity as technology has advanced, there’s a real
risk of that happening.

To be sure, this risk is to some extent inherent in the
MTCR’‘s structure, since responsible MTCR participants
both do and should generally refuse to sell high-threat
Category | systems, therefore necessarily leaving some
potential market opportunities open for suppliers outside
the MTCR. For this to happen even with low-threat types
of UAS that technically meet the Category | definition,
however, seems needless and perverse. As | summed it up
in February 2019,

“This situation harms not just the competitiveness of
MTCR Partners, but also the MTCR itself — and the
cause of nonproliferation. It puts needless pressure
upon the MTCR and could threaten its long-term
integrity, for institutions that do not know how to be
appropriately flexible in a changing world risk
shattering. Nor does continuing this rigidity stop the
spread of UAS, because non-MTCR suppliers are

stepping into this market.

“Indeed, the system's current rigidity fails to provide
real nonproliferation benefits either, because the
growing sources of foreign supply for increasing]
capable UAS mean that these systems are spreading
anyway. And because non-MTCR suppliers of such
equipment seldom feel the need to approach their
transfer-related decision-making with the
nonproliferation-focused scrupulousness that we and
other MTCR Partners display, even for non-Category-!
systems, allowing such non-MCTR suppliers to occup'
this competitive terrain essentially uncontested means
that nonproliferation equities will get less and less
respect over time — unless, that is, we do something to

fix this problem.”

This challenge illustrates the ways in which, in an arena
as characterized by the swift advance of technology as is
the world of aerospace engineering and UAS applications,
the passage of time can do damage to even the wisest set
of standards if those rules are based upon fixed
technological parameters. (That is why, for instance, in our
current work at the U.S. State Department to promote the
development of norms of responsible behavior in
cyberspace, we have tried to make these standards as
“technology-agnostic” as possible — such as by trying to
define irresponsible cyber behavior by its effects rather
than based upon the use of any particular tool or method in
the fast-developing environment of cyberspace.) With
respect to lower-threat UAS, the technological
understandings of 1987 are now not only out of date, but
also in real danger of becoming counterproductive.