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iii

v

Strategic Studies Institute

and

U.S. Army War College Press

REFORMING U.S. EXPORT CONTROLS 

REFORMS: ADVANCING U.S. ARMY INTERESTS

Richard Weitz

December 2015

The views expressed in this report are those of the author and 

do not necessarily reflect the official policy or position of the 

Department of the Army, the Department of Defense, or the U.S. 

Government. Authors of Strategic Studies Institute (SSI) and 

U.S. Army War College (USAWC) Press publications enjoy full 

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offer new and sometimes controversial perspectives in the interest of furthering debate on key issues. This report is cleared for 

public release; distribution is unlimited.

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This publication is subject to Title 17, United States Code, 

Sections 101 and 105. It is in the public domain and may not be 

copyrighted.
vi

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Army War College Press, U.S. Army War College, 47 Ashburn 

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William Cardon, John Daniels, Evelyn Heil, David Karr, Steven 

Martinez, Carlene Natan, and Jacob Peterson.

ISBN 1-58487-716-2
vii

FOREWORD

The U.S. defense export system is in need of significant reform to reduce the impact of its core inefficiencies and weaknesses. The International Traffic 

in Arms Regulations (ITAR) create serious problems 

for the U.S. defense industry and thereby weaken U.S. 

national security in several important ways. 

While the ITAR is mostly successful in preventing 

U.S. arms from being used against the United States 

and its allies, the manner in which the ITAR regulations are enforced presents excessive barriers to U.S. 

firms that impede their ability to compete in the global 

defense market. These firms are important contractors to the U.S. military, and their success enables the 

United States to maintain a technological and industrial advantage. Additionally, when U.S. allies choose 

to purchase defense products from ITAR-free firms 

based outside of the United States, U.S. Army interoperability with foreign forces decreases. 

In order to maintain its strategic advantages, the 

United States needs an arms export control system 

that makes it easier for U.S. defense firms to supply 

U.S. allies with defense products to support international security and U.S. foreign policy goals. The U.S. 

Army plans to fight in coalitions but needs interoperable and well-equipped partners to best achieve 

critical U.S. national security objectives.

 

 

 DOUGLAS C. LOVELACE, JR.

 Director

 Strategic Studies Institute and

 U.S. Army War College Press

ix

ABOUT THE AUTHOR

RICHARD WEITZ is Senior Fellow and Director of 

the Center for Political-Military Analysis at the Hudson Institute. His current research includes regional 

security developments relating to Europe, Eurasia, 

and East Asia, as well as U.S. foreign and defense 

policies. An expert at Wikistrat, Dr. Weitz is also 

an Adjunct Senior Fellow at the Center for a New 

American Security. Before joining Hudson in 2005, he 

worked for shorter terms at the Institute for Foreign 

Policy Analysis, Center for Strategic and International 

Studies, Defense Science Board, Harvard University, 

other research institutions, and the U.S. Department 

of Defense. Dr. Weitz has authored or edited several 

books and monographs, including Turkey’s New Regional Security Role: Implications For The United States

(2014); Rebuilding American Military Power in the Pacific: A 21st-Century Strategy (2013); Global Security 

Watch—China (2013); two volumes of National Security 

Case Studies (2012 and 2008); War and Governance: International Security in a Changing World Order (2011); 

The Russian Military Today and Tomorrow (2010); Global 

Security Watch—Russia (2009); China-Russia Security 

Relations (2008); Mismanaging Mayhem: How Washington Responds to Crisis (2008); The Reserve Policies of Nations: A Comparative Analysis (2007); and Revitalising 

U.S.–Russian Security Cooperation: Practical Measures

(2005). Dr. Weitz holds a B.A. with highest honors 

in government from Harvard College, a M.Sc. in international relations from the London School of Economics, an M.Phil. in politics from the University of 

Oxford, and a Ph.D. in political science from Harvard 

University.

xi

SUMMARY

The Barack Obama administration has launched an 

Export Control Reform (ECR) program to improve the 

regulations and procedures for controlling the export 

of U.S. weapons as well as dual-use equipment and 

technology. Emphasizing that international economic 

competitiveness is a core component of national security, the administration’s stated aim is for the ECR to 

increase U.S. exports and jobs as well as to strengthen U.S. national security and protect U.S. military 

technologies. 

The Obama administration began by establishing 

an interagency task force that, unsurprisingly, concluded that the existing U.S. defense export control 

system—the International Traffic in Arms Regulations—is overly complicated, excessively redundant, 

and attempts to be too protective. The administration 

has since been making reforms to U.S. export controls 

to reduce impediments to U.S. foreign sales and partnerships, while increasing the benefits to U.S. national security through increased interoperability with 

stronger allies.

1

REFORMING U.S. EXPORT CONTROLS 

REFORMS: ADVANCING U.S. ARMY INTERESTS

Richard Weitz

The Barack Obama administration has launched an 

Export Control Reform (ECR) program to improve the 

regulations and procedures for controlling the export 

of U.S. weapons as well as dual-use equipment and 

technology. Emphasizing that international economic 

competitiveness is a core component of national security, the administration’s stated aim is for ECR to 

increase U.S. exports and jobs as well as to strengthen 

U.S. national security and protect U.S. military technologies. The Obama administration began by establishing an interagency task force that, unsurprisingly, 

concluded that the existing U.S. defense export control 

system—the International Traffic in Arms Regulations 

(ITAR)1—is overly complicated, excessively redundant, and attempts to be too protective. The administration has since been making reforms to U.S. export 

controls to reduce impediments to U.S. foreign sales 

and partnerships, while increasing the benefits to U.S. 

national security through increased interoperability 

with stronger allies. 

The White House has established the ambitious 

goal of modernizing the entire U.S. ITAR bureaucracy. 

Defense export reform is always difficult since it affects 

a number of cross-cutting national security interests 

such as nonproliferation, trade, jobs, and preserving 

the defense industrial base. The Obama administration has achieved some progress in streamlining ITAR 

licensing and registration process through executive 

branch regulations as well as updating the U.S. Munitions List (USML). There have been several years of 
2

proposed rules that generally have been adopted following a few months of public comment. However, 

even the administration acknowledges that progress 

in ECR will remain modest and major ITAR defects 

will remain unresolved without deeper changes to 

the ITAR framework. These changes would require 

major congressional action, which is unlikely in the 

two remaining years of this administration given the 

absence of a congressional consensus on the issue. 

HISTORY

With suitable safeguards, foreign defense sales by 

U.S. companies can serve important U.S. national security interests: they foster U.S. defense ties with allies 

and partners, they enhance U.S. military technologies, 

they increase operational and tactical interoperability 

between the United States and other countries, and 

sometimes between U.S. friends and allies that acquire 

the same U.S. weapons systems. They also provide an 

additional customer base for U.S. defense businesses, 

whose health is important for sustaining U.S. military 

primacy. For this reason, the Department of Defense 

(DoD) has long supported U.S. foreign military sales. 

U.S. export controls extend back to the 1930s—the 

Neutrality Act of 1935 gave the Secretary of State the 

right to license exports related to defense trade and 

created USML—but it was really after World War II 

that the U.S. Government adopted a comprehensive 

system for controlling defense exports, laying foundations that have persisted to this day. Unlike after 

World War I, which removed the most significant 

threats to U.S. national security, World War II soon 

saw the rise of a new powerful adversary—the Soviet Union. Washington policymakers simultaneously 
3

sought to prevent the Soviet bloc from stealing U.S. 

military secrets while sustaining U.S. economic superiority as the foundation of U.S. military-industrial 

might and to augment the capacity of U.S. friends 

and allies against Soviet-backed threats through arms 

transfers and other measures. The resulting Mutual 

Security Act of 1954 and the Arms Export Control 

Act (AECA) of 1976 served as the legislative basis for 

ITAR, which falls under the Code of Federal Regulations (CFR) Title 22, Foreign Relations.2

ITAR still bears a distinctive Cold War-era stamp. 

While contemporary debates over ITAR focus on economic concerns, the Act itself is preoccupied with (and 

prioritizes) security considerations. AECA applies 

broad U.S. national security strategies to govern U.S. 

arms exports. USML has been constantly added to, but 

not significantly subtracted from, since its creation in 

1935. As a result, USML has regulated “military railway trains” and other obsolete items. The USML also 

contains items that pose no significant threat to U.S. 

security, such as M1A1 Abrams tank brakes, which 

are identical to fire truck brakes that have no export 

restraints.3

AECA provides for export control with several basic components: an export control list, a license system 

for would-be exporters, and criminal penalties for violations of AECA.4

 The Act regulates which arms are 

manufactured and exported (through the Munitions 

list) and who manufactures and receives the arms 

(through the licensing process). The language AECA 

uses to define what the U.S. President’s thought 

process should be when considering an application 

are instructive as to the Act’s strategic rather than 

economic purpose: 
4

Decisions on issuing export licenses under this section 

shall take into account whether the export of an article 

would contribute to an arms race, aid in the development of weapons of mass destruction, support international terrorism, increase the possibility of outbreak 

or escalation of conflict, or prejudice the development 

of bilateral or multilateral arms control or nonproliferation agreements or other arrangements.5

In 1977, President Gerald Ford transferred Arms 

Control authority from himself to the Department of 

State in Executive Order 11958. The order charged the 

Secretary of State to judge whether any “proposed 

transfer will strengthen the security of the United 

States and promote world peace.”6 The State Department drafted ITAR later that year to implement Ford’s 

executive order. Though AECA includes certain provisions that concentrate decisionmaking power in 

the executive branch, Congress included clauses to 

retain some measure of control. During the 1970s, 

rather than merely reacting to presidential decisions, 

Congress tried to participate in the early stages of the 

decisionmaking process by establishing “framework 

legislation” that created a general procedural structure in which Congress received information through 

reporting requirements and compelled consultation 

through legislative vetoes.7 Under the original Gaylord Nelson-Jonathan Bingham proposal, the embryonic form of AECA passed in 1974, Congress enjoyed 

extensive veto power over any proposed governmentsponsored sale of U.S. military equipment.8

 Nonetheless, in recent years, the executive branch has dominated implementation of U.S. arms export policies. 

Both AECA and ITAR stipulate that the President 

(or State Department) must notify Congress 20 days 

before any proposed changes are made to the USML. 
5

In 1983, the Supreme Court, in Immigration and Naturalization Service v. Chadha, ruled the congressional 

veto power unconstitutional, even while the rest of 

AECA, which was meant to bolster that veto power, 

was upheld. President Bill Clinton issued Executive 

Order No. 12924 to maintain executive enforcement 

of the 1949 Export Control Act (ECA) provisions after the original AECA lapsed.9

 Rather than liberalize 

U.S. arms exports, Congress sought to compel all recipients of U.S.-made weapons to adhere to U.S. arms 

control policies. It enacted legislation requiring that all 

countries having bilateral arms trade agreements with 

the United States establish a similarly restrictive and 

rigorous “regime” for arms control.10 Congress further 

urged “that the President should work actively with 

all nations to check and control the international sale 

and distribution of conventional weapons of death 

and destruction and to encourage regional arms control arrangements.”11

Faced with a globalizing world and rapidly advancing civilian-made dual-use technologies, the Ronald Reagan administration relaxed some export controls in the 1980s and authorized commercial satellite 

(COMSATS) exports to France and the use of low-cost 

Chinese rocket launchers. In 1992, Congress moved 

all “dual-use” items (those having both civilian and 

military applications) from USML to the less restrictive Commerce Control List (CCL).12 The Clinton administration relaxed controls on cryptography and on 

the export of satellite technology, including exports to 

China, by transferring its control to the less restrictive 

Export Administration Regulations (EAR). However, 

a lack of interagency coordination, bureaucratic infighting, and congressional pushback following the alleged leaking of sensitive dual-use rocket technology 
6

to China, blocked the administration’s broader export 

reform agenda.13 As a result, the United States lagged 

behind many other Western countries in relaxing its 

arms export controls after the Cold War.14

The backlash from the Chinese episode presented a decade-long obstacle to major export reform. 

In 1996, a Long March 3B rocket carrying the U.S.-

manufactured Intelsat 708 crashed immediately after 

takeoff. It was the third launch failure in 3 years by 

a Long March rocket. China invited U.S. engineers 

to participate in a review to determine the cause of 

the continued failures. Hughes, Loral, and other major aerospace companies identified the problem and 

helped China strengthen its rocket launching capabilities—which also enhanced China’s ballistic missile 

capabilities. The incident led to intense scrutiny by 

Congress, which launched an investigation chaired by 

Representative Christopher Cox. The resulting report 

claimed that U.S. companies were more concerned 

with profit than with protecting U.S. national security.15 Congress then enacted the Strom Thurmond 

National Defense Authorization Act (NDAA) of 1999, 

which required that space-related items, including all 

satellites, were to be controlled as defense articles and 

removed the President’s authority to change their jurisdictional status without congressional approval.16

Furthermore, NDAA changed the language of USML. 

Whereas previously it only applied to those satellites 

“specially designed or modified for military use,” the 

new language includes: “communications satellites, 

remote sensing satellites, scientific satellites, research 

satellites, navigation satellites, experimental and 

multi-mission satellites.” The change likely explained 

why, from 1999-2008, U.S. commercial satellite manufacturers’ global market share decreased from 83 
7

percent to 50 percent.17 European countries began to 

specialize in manufacturing commercial satellites that 

they marketed as “ITAR-free.”

MAIN PROVISIONS

Currently, the United States has two lists of restricted export items; they define issues differently, 

have different structures, and provide different levels 

of specificity. The State Department maintains USML, 

which covers all military and intelligence items from 

complete aircraft and armored vehicles to ammunition 

cartridges and specialized software. USML applies 

primarily to U.S. defense contractors, but also covers 

certain dual-use components such as aircraft landing 

gears and marine propulsion units. ITAR establishes 

the licensing policy for USML items. Meanwhile, the 

Department of Commerce manages CCL, which covers dual-use technological equipment intended for 

civilian use but whose sale may have security implications. CCL has Export Control Classification Numbers 

(ECCN), an alpha-numeric code that specifies which 

one of 10 categories and five product groups within 

CCL the item belongs. CCL groups countries into categories determined by the criteria of bilateral relations 

and security. EAR, administered by the Department 

of Commerce’s Bureau of Industry and Security (BIS), 

establishes licensing policy for CCL items. DoD is an 

influential player in both lists since other agencies rely 

on its technical expertise. There are also many entity 

lists of end-users, such as terrorist organizations and 

states of proliferation concern, which cannot legally 

import sensitive U.S. items.

DoD and State jointly determine the content of 

ITAR. The Directorate of Defense Trade Controls 
8

(DDTC), a component of the State Department’s 

Bureau of Political-Military Affairs, administers the 

regulations by creating a licensing process for military exporters and establishes a munitions list to define which articles fall under DDTC regulation and 

which, by their omission, fall under the Commerce 

Department’s less restrictive EAR, established by the 

1949 ECA. For example, in principle, a military-grade 

set of night vision goggles would be subject to ITAR 

regulations, while a shipment of office supplies would 

fall under CCL, based on EAR. Nonetheless, the tension between seeing defense shipments primarily as 

a tightly guarded security concern or as an economic 

opportunity fuels much of the discomfort and debate 

surrounding ITAR today.

The State Department has four offices that work on 

ITAR. The Office of Defense Trade Controls Management helps design, develop, and refine the processes, 

tools, and activities related to arms export regimes. 

The Office of Defense Trade Controls Licensing has 

responsibilities for licensing and other defense trade 

authorizations. The Office of Defense Trade Controls 

Compliance handles potential violations of the law or 

regulations. The Office of Defense Trade Controls Policy negotiates Defense Trade Cooperation Treaties.18

ITAR derives its legislative authority from Section 38 

of AECA, under 22 USC § 2778, which authorizes the 

President to control the export and import of defense 

articles and services.19 The main force of ITAR is its 

licensing process. All DDTC registered companies or 

individuals need individual approval for each export 

transaction.20 DDTC generally takes about 45 days to 

process a license.21

ITAR contains 10 sections. Sections 120, “Purpose 

and Definitions,” and 121, “USML,” represent the 
9

core of ITAR. USML is comprised of 20 categories of 

defense-related items ranging from firearms to military vehicles. Through legislation, Congress can exercise the final say as to what items can be placed on 

and removed from USML.22 Understanding the definitions employed by this legislation, some of which 

are contrary to the vernacular connotation, is critical 

to understanding how ITAR functions. Any commodity that has a potential military application is subject 

to ITAR regulations as “defense articles” listed on 

USML.23 The definition includes any “technical data 

recorded or stored in any physical form, models, 

mockups, or other items displaying technical data” 

related to USML identified items, including encryption techniques.24 In fact, according to Category XXI of 

USML, anything “not specifically enumerated in . . . 

the United States Munitions List which has substantial 

military applications and which has been specifically 

designed, developed, configured, adapted, or modified for military purposes” is to be included in USML 

and subject to ITAR at the discretion of the Director of 

the Office of Defense Trade Controls Policy. This also 

includes technical data and defense services, which 

contains information relating to defense articles or 

services.25

ITAR employs a very broad definition of the concept of an “export.”26 For example, since blueprints 

and plans for defense-related items are considered 

tantamount to the items themselves, ITAR can serve 

as a regulator not only of the exchange of goods, but of 

ideas as well. ITAR’s jurisdiction extends to information on how to make, maintain, or use defense items. 

Furthermore, ITAR encompasses a broad definition 

of how exports are transferred. Information that is 

shared verbally or visually, such as on a computer 
10

screen, is considered an export. Intention is also irrelevant under ITAR. For instance, if a foreign national 

overhears a conversation about a certain product design, that transfer is considered an export.27 The definition of “defense service” includes the instruction of 

any foreign national, whether inside or outside the 

United States, in the construction or use of defense 

equipment.28 Anyone wishing to provide a defense 

service must go through DDTC registration service, 

just as would an arms exporter.29 DDTC registration 

of any exporting company or freight carrier must be 

renewed annually.30

The regulations become more intricate when involving a “foreign person.”31 In certain circumstances, 

a transfer can occur entirely within the United States 

but still be classified as an export since an ITAR-controlled commodity or information transferred to a 

non-American employee of a U.S.-based corporation 

would be considered an export and require a license.32 

For instance, shipping technical information from 

New York to a Canadian citizen living in Seattle and 

working for a U.S. defense firm would constitute an 

export, even though the information never left U.S. 

territory. DDTC considers both the resident country 

and country of origin of foreign citizens when reviewing export applications. For example, if a U.S. company wants to transfer information to a Sudanese-born 

citizen of France, the license application would regard 

the information transfer as an export to both Sudan 

and France.33 Additionally, a company must have 

State Department approval for not only the first transfer of an ITAR-controlled commodity or data outside 

the country, but also for each subsequent transfer 

even after the commodity or information has left the 

United States.34 In contrast, a “U.S. person” is either an 
11

American citizen, a lawful permanent resident of the 

United States, or a “protected individual as defined 

by 8 USC § 1324b(a)(3).”35 Unlike foreign persons, U.S. 

persons do not face the same restrictions and are exempt from export licenses in some circumstances. The 

State Department proposed a rule in May 2015 that 

would require U.S. persons who work in defense related services for a non-U.S. company to register with 

DDTC.36

USML enumerates the defense articles and services that are subject to ITAR regulations; the executive branch decides which articles and services are on 

USML as defense-related items.37 The complete USML 

list is located at 22 CFR 121.1. It covers “end-items” 

as well as those partially completed items (such as 

forgings, castings, extrusions, and machined bodies) 

that clearly resemble and are identifiable as defense 

articles. USML defines an “end-item” as a weapon in 

a finished state that only requires ammunition, fuel, or 

other energy source to make it operative.38 In theory, 

the USML List is supposed to include only an item 

that is “specifically designed, developed, configured, 

adapted, or modified for a military application, and 

does not have a predominately civil application.”39

This encompasses a range of military equipment, from 

fully integrated advanced defensive or offensive systems to accessories for military equipment (everything 

from night vision goggles to auto parts). The ITAR 

list contains all items originally intended for military 

use, regardless of the intended or declared use by the 

recipient of an export.40 Items enumerated on USML 

must be registered with the State Department’s Office 

of Defense Trade Controls.41 In contrast, the jurisdiction of the BIS encompasses “dual-use items” that 

have “both commercial and military or proliferation 
12

applications.”42 Factors that determine whether an 

item is dual-use include its technical characteristics, 

its destination, what the exportee (end-user) plans to 

do with the item, and the other activities in which the 

end-user generally engages.43

In practice, it is not always clear whether an item 

falls under USML. In these cases, the commodity jurisdiction procedure is used to determine the status 

of the item in question.44 This determination is made 

by the Directorate of Defense Trade Controls upon the 

submission of a form detailing the article or service, 

and a history of the product’s design, development, 

and use. The commodity jurisdiction process, rather 

than categorically ruling on types of items, considers 

each product individually, determining what the purpose of the item is using a very specific set of “form” 

criteria.45 This procedure can be used for items that 

are not on USML and items that are on the List but 

whose designation seems ambiguous or obsolete. As 

stipulated under Section 38(f) of the AECA, the Directorate must provide 30 days’ notice to Congress if it 

sees fit to remove an item from the List.46 Even when 

DDTC concludes that the item is not ITAR-regulated, 

the commodity jurisdiction process often adversely 

affects the trade of these exempt items due to the protracted review process.

To the frustration of foreign governments and 

their companies, the extraterritorial application of 

U.S. export controls is broad. The U.S. Government 

claims jurisdiction regarding ITAR based on the nationality of the controlled defense article and of the 

person involved in exporting or importing the item. 

An item regulated by ITAR will be subject to U.S. export laws regardless of location or ownership. Regulation follows the part, not the person. Consequently, 
13

production abroad of any end item that contains any 

ITAR-controlled U.S. content is subject to these regulations. Unlike the EAR, ITAR has no de minimis exception. If a foreign made product contains any ITARcontrolled component or technology, no matter how 

insignificant, the entire product is subject to ITAR.47

Even more controversially, when dealing with brokers of U.S.-origin defense articles, ITAR applies its jurisdiction to any person in the United States or anyone 

who is otherwise subject to U.S. jurisdiction.48 ITAR 

prohibits retransfer (also known as re-export) of any 

item on USML by foreign persons without prior authorization. Consequently, if a foreign person wants 

to retransfer an item controlled by ITAR to another 

foreign person, both parties must have authorization. 

This could mean that they need “Third Party Transfer 

Approval” from the U.S. Government, must be named 

on the export license, or be named as a party to a Technical Assistance Agreement or Manufacturing License 

Agreement. 

Section 122 outlines registration requirements, 

submission of registration statements, registration 

fees, notification of changes in information furnished 

by registrants, and maintenance of records by registrants.49 At its core, Part 122 mandates that any person in the United States who manufactures or exports 

defense articles or furnishes defense services must 

register with the DDTC. A registration exemption is 

offered for officers and employees of the U.S. Government acting in an official capacity, persons whose 

business involves only the “production of non-technical data,” persons whose activities are licensed by 

the Atomic Energy Act of 1954, and persons whose 

“fabrication of articles [are] for experimental or scientific purpose.”50 According to ITAR, the purpose of the 
14

registration is to allow the U.S. Government to identify and account for those involved in the manufacturing and export of defense-related items. ITAR stresses 

that registration does not confer any special rights or 

privileges.51 Section 122.3 concerns the annual registrations fees, which are three-tiered. Each tier involves 

different levels of payment for different types of entities. New registrants generally fall under the Tier 1 

payment scheme, while registrants who have submitted and been approved for more than 10 applications 

for manufacture or export within a 12-month period 

would fall into the more advanced Tier 3 category.52

Additionally, registrants must also maintain highly 

detailed records “concerning the manufacture, acquisition, and disposition” of all defense articles, defense 

services, and technical data. Records must be either 

on paper or in an electronic format that can be easily 

converted to paper.53

Section 123 details how the export and import of 

defense articles are to be managed. It specifies which 

forms must be filled out prior to manufacture, export, 

or temporary import of a defense article or service, 

and provides for exceptions to this rule, which include 

shipments with a total value less than $500, exports 

of defense articles “in furtherance of a manufacturing 

license agreement, technical assistance agreements, 

distribution agreements, or arrangements for the distribution of items identified in Category XIII(b)(1).”54

Category XIII(b)(1), entitled Auxiliary Military Equipment, concerns military cryptographic systems and 

their components.55 Section 123.16 includes numerous 

other exceptions and details which can be found within the document. Section 123 also covers additional 

topics such as exports and imports that cross the Canadian and Mexican borders (123.19), shipments by 
15

the U.S. Postal Service (123.24), the special licensing 

regime for the export of commercial satellite equipment to U.S. allies (123.27), and exports to warehouses 

outside the United States (123.7).56

Section 124 is similar to Section 123, but where Section 123 concerns the export and import of defense articles, Section 124 deals with the provision and manufacture of defense services.

57 This involves the training 

of foreign military forces, the design of a new type of 

body armor, the maintenance and operation of a patrol boat, and even the destruction of an obsolete early 

warning RADAR station. Generally, while Section 123 

is concerned with the buying and selling of weapons 

and information, Section 124 is focused on the development and use of weapons and information. Section 

124.11 is worth noting in that it requires, pursuant to 

the Arms Export Control Act, that: 

certification be provided to Congress prior to the 

granting of any approval of a manufacturing license 

agreement or technical assistance agreement...for the 

manufacturing abroad of any item of significant military equipment.58

The only exception to this is an emergency that requires immediate approval of the agreement for purposes of U.S. national security. Otherwise, approval 

cannot be granted until 15 days after Congress has received the certification for the manufacturing license 

or technical assistance agreement for North Atlantic 

Treaty Organization (NATO) countries (including 

Australia, Japan, New Zealand, and South Korea), and 

30 days for all other countries.59

Section 125 concerns the export of technical data 

and “classified defense articles.”60 Information in the 

public domain is not subject to the licensing require-
16

ments enumerated in this section.61 Section 125.3 

outlines how classified defense articles and technical 

data are to be licensed and secured when transferred 

out of the United States.62 Section 125 also includes 

exemptions of general applicability. The exemptions 

are more or less similar to those specified in Section 

122. One interesting exemption is that technical data 

“in furtherance of a contract between exporter and an 

agency of the United States government” is exempt 

from licensing so long as the contract provides for the 

export of the data.63 

Section 126 delineates general prohibitions on 

where defense articles and services can be transferred. 

As required by the AECA, ITAR sets forth exemptions and extra burdens for certain destinations in 

accordance with U.S. security goals. Section 126.1 of 

ITAR rules prohibits exports of controlled articles to 

some two dozen “proscribed” countries. General prohibitions apply to Belarus, Cuba, Eritrea, Iran, North 

Korea, Syria, and Venezuela. Exports are also prohibited to countries that are under a U.S. arms embargo, 

including Burma, China, and the Republic of Sudan.64

Additionally, exports are prohibited to countries that 

the United Nations (UN) Security Council has placed 

under arms embargoes, as well as countries that the 

U.S. Secretary of State deems to have “repeatedly provided support for acts of international terrorism.”65

Defense articles cannot be transported on aircraft, 

vessels, or vehicles owned or belonging to any of 

these countries. Section 126 provides exceptions for 

the proscribed countries. These must be determined 

by the Managing Director of the DDTC and require a 

“case of exceptional or undue hardship.”66 Exporters 

from countries having a special relationship with the 

United States also receive special consideration, and 
17

often more lenient treatment, in the licensing process. 

Canada, the United Kingdom (UK), and Australia are 

exempt from ITAR’s provisions since these countries 

have treaties with the United States and their industries are considered a critical part of the U.S. defense 

industry. The U.S. Defense Trade Cooperation Treaties with the UK and Australia reflect that 99 percent 

of licensing applications between the United States, 

UK, and Australia are approved.67 Special procedures 

for arms exchanges also apply to some other NATO 

members,68 but other long-standing U.S. allies still suffer. In 2010, South Korea voiced irritation about waiting for more than 2 years to update its U.S.-made P-3 

Orion maritime patrol aircraft because of ITAR-related impediments.69 Even Israel, one of the most strategic U.S. allies, has started purchasing their COMSATS 

from other countries due to ITAR’s licensing requirements and other ITAR-related frustrations.70

Section 127 enumerates what constitutes violations 

of ITAR and defines consequences. Violations include 

transfer of defense articles without a license, engaging in behavior that breaches the licensure agreement, and misrepresenting or omitting information 

on a license application and other documents.71 ITAR 

provisions include clearly defined civil and criminal 

penalties. The Assistant Secretary of State for PoliticalMilitary Affairs is authorized to impose a civil penalty 

that shall not exceed the maximum amount denoted 

by 22 USC § 2778, 2779a, and 2780 for any applicable 

violation of any of these sections; this penalty can be 

in addition to, or in lieu of, any additional civil penalty that might be applicable to a given situation.72

On the criminal side, the liability standard applies if 

an exportee makes a false statement or omits a material fact that should be stated in order to mislead; the 

penalty is to be determined under the auspices of 22 
18

USC §2778(c).73 The penalties of violating ITAR can 

be severe. Civil penalties are $500,000 per violation. 

Violations can accrue easily since multiple shipments 

of the same defense article without appropriate licensure are usually treated as multiple violations. Making a mistake is not a viable defense to civil charges 

since penalties “can be imposed without showing any 

intent to violate ITAR.”74 The criminal penalties for 

ITAR violations are even greater: $1,000,000 and up to 

1 year in prison per violation. Violations accrue in the 

same way as civil penalties. Businesses convicted of 

criminal violations are forbidden automatically from 

exporting under ITAR, and possibly banned from 

“selling to the US government directly or indirectly.”75

A company facing civil penalties can also be barred 

from exporting U.S.-made defense articles and technology. Violations of ITAR can compound and multiple violations can result in a combination of several 

civil and criminal penalties greater than $1,000,000. 

For example, in 2013, Raytheon and Aeroflex were 

fined $8 million each for ITAR violations, and in 2012, 

United Technologies was fined $55 million. ITAR violations are also in the public record, which can inflict 

further costs on violators in the form of lost business 

and reputational damage.76

Section 128 establishes the administrative procedure and structure for implementation and operation 

of the Arms Export Control Act. Since the decisions 

and foreign affairs power inherent in the operation of 

the AECA is “highly discretionary,” the AECA and 

ITAR are excluded from review under the Administration Procedure Act.77 Section 128 establishes the 

authority of Administrative Law Judges within ITAR 

framework and outlines the mechanics of administrative proceedings, oral hearings, enforcement of 

discovery rights during an administrative trial, hear-
19

ings, appeals, and other matters required for the functioning of the administrative legal system supporting 

ITAR.78

Section 129 states that brokers must also be licensed by the DDTC to operate. A broker is defined 

as “any person who acts as an agent for others in 

negotiating or arranging contracts, purchases, sales, 

or transfers of defense articles or defense services 

in return for a fee, commission, or other consideration.”79 Exemptions to this licensure requirement 

include employees of the U.S. Government and also 

those of foreign governments and organizations 

who are acting in an official capacity, and persons 

who exclusively transport or forward freight. For 

example an air carrier “who merely transports . . .

licensed USML items [is] not required to register.”80

The section details additional requirements for 

brokers.

The final section of ITAR, No. 130, elucidates the 

regulations surrounding fees, commissions, and political contributions. Corporations seeking licenses must 

disclose to the DDTC any fees, commissions, or political contributions that the “applicant or its vendors 

have paid.”81 Section 130 also details other information that must be provided by applicants and vendors 

to the DDTC before receiving approval for the transfer 

of defense articles and services.82

CRITICISMS OF THE EXISTING SYSTEM

Restricting the export of sensitive technologies 

that provide the United States and its allies with a 

military advantage over potential military adversaries or commercial rivals is an unobjectionably legitimate purpose for export controls. Professors Jonathan 
20

Caverley and Ethan B. Kapstein argue that “for 2 

decades, the United States has dominated the global 

arms trade, reaping a broad range of economic and 

geopolitical benefits in the process.”83 Highly sophisticated technologies are a critical enabler of U.S. military capabilities and provide the United States and its 

allies with unique capabilities against both conventional adversaries and non-state actors. It is widely 

understood that “[t]he technologies that underpin 

U.S. military and economic strengths continue to be 

targets for theft, espionage, reverse engineering, and 

illegal export.”84 However, this does not mean that 

additional administrative burdens and micromanaging are necessarily the most efficient responses even 

if historically they have been lesser priorities to those 

implementing ITAR, who have focused on national 

security considerations above all else.85 Inefficiencies 

and other burdens risk sapping the economic strength 

that provides the foundation for U.S. military power 

and U.S. national security.

Although the United States has a larger share of 

the global arms market than any other country, the 

ITAR system likely makes some U.S. defense products 

and services less competitive. Because of the controls 

and restrictions, U.S. defense manufacturers cannot 

sell to certain countries, and some foreign entities may 

reject U.S. bids because of concerns over constrained 

technology transfers or supply-chain disruptions. 

Additionally, since many ITAR-controlled items are 

available from foreign sources, export controls increase U.S. firms’ cost of doing business relative to 

their foreign competitors.86 Obtaining all necessary 

license documentation can take months, if not years; 

even a repeat export of the same item to the same recipient requires a new license each time. The restric-
21

tions also complicate U.S. joint ventures with foreign 

partners by handicapping their access to U.S. technology. Multinationals respond by moving their production offshore, eroding the U.S. defense industrial base 

and undermining export control regimes. Some firms 

simply eschew the U.S. defense market altogether to 

avoid these problems. ITAR-created overhead costs 

also price U.S. companies out of the market for many 

defense-related components.87 Small U.S. businesses 

are major victims of these requirements since they 

have less financial and human resources than large 

firms to spend on hiring and training ITAR specialists 

and meeting other ITAR-related costs.88

ITAR mandates an extra licensing step for any foreign or dual citizen involved in any step of the arms 

export process including the exporting firm, any intermediate carriers, as well as the final destination. In 

academic institutions, limitations on the acquisition 

and sharing of information and innovations, such as 

with foreign nationals and entities, can impede their 

serving as laboratories for useful military technologies. There are also substantial monetary costs with 

fulfilling ITAR obligations.89 Many larger institutions 

have the resources and staff to negotiate the licensing 

red tape, but smaller academic institutions that have 

limited resources to devote to such nonacademic work 

will more likely forgo it.90

A research group at the Massachusetts Institute of 

Technology worried that restrictions on dealing with 

foreign nationals, which became more severe after 

the September 2001 terrorist attacks, have discouraged international students from applying to U.S. 

university engineering programs due to limitations 

on which projects they could work.91 Some academic 

institutions decline to compete for contracts requir-
22

ing them to deal with ITAR restrictions. Furthermore, 

foreign students or professors cannot participate in 

some research projects, seminars, and talks involving 

ITAR. In addition to limiting creativity, this restriction 

can deter them from even studying or working in the 

United States or lead foreign students who do obtain a 

degree in sensitive but vital fields, such as aerospace, 

to seek employment outside of the United States.92

ITAR’s “Fundamental Research Exception” aims to 

relax restrictions on institutions doing: 

basic and applied research in science and engineering 

where the resulting information is ordinarily published and shared broadly within the scientific community as distinguished from research the results of 

which are restricted for proprietary reasons or specific 

U.S. Government access and dissemination controls.

However, universities believe that, in practice, its 

exemptions are excessively limited.93 Ironically, a 2011 

U.S. Government Accountability Office (GAO) study 

found that the licensing system for foreign nationals 

was simultaneously excessively burdensome and insufficiently strict—both harmful for U.S. security.94

The higher operating costs due to ITAR have created a competitive advantage for foreign producers that 

can offer ITAR-free options without the overhead costs 

of complying with those regulations.95 Very public 

episodes of legal action against foreign firms (like the 

French satellite manufacturer Thales Alenia Space) for 

violating ITAR have likely encouraged trends toward 

ITAR-free product lines. Many European and Asian 

manufacturers now proudly advertise their products 

as ITAR-free.96 To be precise, an ITAR-free product is 

a defense (or other) article that is designed not to need 

any ITAR-regulated parts. Making an ITAR-free prod-
23

uct requires an entity to be aware of possible ITAR 

jurisdiction at each step of the manufacturing process, 

so a foreign entity must segregate U.S. involvement 

from the creation of the product. 

In the case of technical data, U.S. persons must not 

be involved with any technical assistance or product 

design.97 With few exemptions, a product can also become subject to ITAR by entering the United States. 

The competitive advantage of ITAR-free products—

those using exclusively foreign-origin content and 

that avoid U.S.-origin content to escape ITAR export 

controls—is mostly anecdotal. It is unclear how pervasive ITAR-free products are and how much advantage 

they enjoy over U.S.-origin goods subject to ITAR. 

However, there are commonly cited examples. In 2011, 

Lockheed Martin and Boeing were eliminated from 

the bidding for a $10-billion contract to build medium 

multirole combat aircraft (MMRCA) for the Indian Air 

Force.98 The higher cost of the U.S. systems regarding 

long-term maintenance and technology transfer may 

have played a role. Each order of replacement parts 

would need its own ITAR clearance, as would any 

software or technology required to run the planes.99

Similar factors likely contributed to the Brazilian Air 

Force’s decision to forego U.S.-built planes (and even 

Swedish-built planes that use U.S.-made engines) in 

a similar bidding competition.100 Other manufacturers and exporting countries gain an advantage from 

offering products that eschew the bureaucratic hassle 

of ITAR. The result is that the United States has less 

influence over the global sale of militarily sensitive 

technologies.

The lack of consistency or predictability caused 

by the historical ITAR process increases the risks perceived by potential foreign investors and buyers of 

U.S. goods. The broad discretion afforded the Com-
24

merce, State, and Defense bureaucracies in delegating, 

suspending, and/or rescinding export licenses—as 

well as their ability to establish broad license exception categories that permit a controlled item to be 

exported under certain conditions without a transaction-specific license—forces foreign companies to incur additional risk in doing business with the United 

States. Importantly, the Defense and Commerce Departments are not subject to the licensing standards 

of the Administrative Procedures Act (APA), which 

tempers administrative discretion by mandating a 

precedent-based decision process.101 The ITAR system 

is widely considered to apply overly broad requirements to U.S. dual-use exports.102 This makes it more 

difficult for U.S. entities to expand into foreign countries and increases their regulatory and compliance 

costs. 

Each year the U.S. Government reviews thousands 

of applications and approves nearly all of them, the 

majority of which are for end-user items the U.S. Government has previously approved. Even so, the ITAR 

system forces U.S. and foreign partners to obtain separate approvals for almost every aspect of a weapon 

system.103 Even though the majority of important technologies today incorporate dual-use items, defining 

terms negatively (as ITAR does) introduces ambiguity 

in what is covered by regulation. Firms that maintain 

research and development facilities in foreign countries, or employ foreign persons domestically, must 

compartmentalize access to information to exclude 

nonauthorized persons. Because of the currently 

broad wording of the technical data definition, theoretical access could be considered a breach of ITAR. 

This compartmentalization increases the incentives to 

not hire employees designated as foreign persons by 

ITAR, which reduces the talent pool available for U.S. 
25

defense firms. ITAR also creates problems for U.S. 

companies that want to cooperate with foreign entities 

on new products. Foreign companies believe that the 

ITAR process causes delays, discourages cost savings, 

restricts information sharing, and complicates supply 

chains.104 As a result, many foreign companies decide 

that the cost of obtaining ITAR-regulated goods is not 

worth the potential benefit. Consequently, these companies choose to invest in ITAR-free countries. Additionally, companies selling widely available technologies and goods will, everything else being equal, 

seek out ITAR-free non-U.S. buyers. These activities 

doubly harm U.S. national security by reducing U.S. 

economic advantages and decreasing the impact of 

U.S. export controls.

An example of how foreign companies will run 

from ITAR and look for non-U.S. locations has been 

seen in the space manufacturing industry. In 1999, 

Congress transferred jurisdiction of space-related 

equipment from the EAR under the Department of 

Commerce to the more restrictive ITAR.105 The placing of space systems on Category XV of USML, with 

all its associated licensing requirements, has made it 

considerably more difficult for U.S. entrepreneurs to 

enter the international commercial space market. The 

production, transfer, and use of everything, including 

launch vehicles, navigation equipment, ground control stations, and space-qualified photovoltaic arrays 

is now illegal without appropriate DDTC approval. 

This has dramatically increased the operating costs of 

the U.S. commercial space industry and commercial 

satellite owners at a time when the technology and 

other capabilities to design rockets have spread well 

beyond the United States and the Soviet Union.106 In 

fact, the decision to move space related items from 

the EAR to ITAR likely contributed to the subsequent 
26

dramatic fall in the U.S. market share of the commercial space industry—from 63 percent of the market 

share before implementation of the stricter ITAR controls in 1998, to only 42 percent in 2002.107 In the geocommunications satellite sector, the U.S. market share 

similarly fell from 73 percent in 1995 to 25 percent 

by 2005.108 According to the Space Foundation, ITAR 

most burdened the small, lower-tier contractors that 

“are a significant source of . . . new technology and 

innovation.”109 Moreover, ITAR regulations have dissuaded collaboration between U.S. firms and foreign 

corporations.110 These changes have also made the 

space industry heavily dependent on purchases from 

the U.S. Government, which now accounts for about 

90 percent of the industry’s sales.111 In the 1990s, many 

of the specialized small parts used by international 

satellite companies to make their equipment came 

from the United States.112 With a new license required 

for each order, however, foreign satellite companies 

naturally decided to minimize their use of ITAR-regulated U.S. parts. Non-U.S. manufacturers increased 

their coordination of satellite parts as seen in how European firms began to make products compatible with 

Chinese Long March rocket launchers.113

To protect U.S. national security, the U.S. export 

control system hampers international law enforcement by monitoring and regulating purchases of military technologies by inappropriate state and nonstate 

actors. The contested jurisdictions and competing licensing requirements allow export violators to escape 

prosecution by showing they received permission 

from at least one entity. On occasion, two agencies 

will review independently the same license application and render different decisions. Clever exporters 

and malign actors will try to game the system through 

forum shopping. Many assessments of how to apply 
27

the controls are highly subjective and rely on the “pornography” standard (regulators judge on the basis of 

appearance). The large volume of licensing decisions 

dissipates enforcement resources on items of little 

military value while weakening protection of key U.S. 

military and technological advantages. Unneeded 

export restrictions impede U.S. military interoperability with foreign partners since they cannot obtain 

the same or compatible weapons systems. Even allies 

may worry about buying ITAR-controlled items since 

they may encounter difficulties obtaining urgently 

needed spare parts for vital U.S.-made defense equipment. The Pentagon has also expressed worries that 

strict ITAR regulations are incentivizing producers of 

defense products to invest in projects elsewhere, and 

this is improving the military-industrial capabilities of 

potential competitor countries rather than those of the 

United States.114

At the advent of the Obama administration, the 

U.S. export system presented a maze of institutions 

with potentially contradictory requirements and enforcement agencies with overlapping authorities. It 

employed two different control lists, was administered 

by two different departments, involved three different 

primary licensing agencies, as well as about a dozen 

end-user screening lists. Information technologies (IT) 

and systems, which were largely incompatible and 

often inaccessible to each other, made it difficult to 

integrate their coverage. The system also resulted in 

a stove-piped licensing structure with frequent disputes over commodity and jurisdiction; the agencies 

involved did not know when others were reviewing or 

issuing licenses. In addition to USML run by the State 

Department and the Commerce Department’s list of 

dual-use items, the Treasury Department managed 

economic sanctions on a wide range of entities. The 
28

Nuclear Regulatory Commission and Energy Department had the special responsibility of regulating the 

export of certain nuclear materials and technologies. 

The ITAR process is infamous for its slow pace in 

processing a massive number of license applications. 

DDTC receives tens of thousands of applications annually and approval can take months.115 The average 

time to approve technical assistance agreements increased from an average of 52 days in 2003 to 106 days 

in 2006.116 In 2008, President George W. Bush signed 

National Security Presidential Directive (NSPD) 56, 

which mandated the DDTC to review and rule upon 

a licensing application within 60 days of receiving the 

application. Nonetheless, the chair of the International 

Space Station Independent Safety Task Force has since 

testified to the fact that the “ITAR restrictions and the 

IP’s objections to signing technical assistance agreements are a threat to the safe and successful integration and operations of the Station.” He estimates that 

ITAR-related restrictions lose U.S. space companies 

an estimated $600 million in revenues each year. 117

Businesses cite the resulting lengthy time and uncertainties of securing a license as major problems 

with ITAR. In a Booz Allen survey of U.S. industry 

executives in May 2006, 85 percent of the respondents 

“agreed” or “strongly agreed” with the statement 

that “the unpredictable amount of time that it takes 

my company to obtain an export license hinders my 

company’s strategic decision making.” When asked 

whether government regulators provide timely responses to requests for guidance, 64 percent either 

disagreed or strongly disagreed. When presented 

with the statement, “I can predict with confidence the 

amount of time it takes for my company to obtain an 

export license from my government,” 71.4 percent 

either disagreed or strongly disagreed.118
29

Many laws and regulations have been adopted 

over the years on an ad hoc basis that urgently required streamlining. In 2010, Defense Secretary Robert 

Gates correctly called the U.S. export control system 

a “byzantine amalgam of authorities, roles, and missions scattered around different parts of the federal 

government.”119 Before the Obama administration, 

there had been little effort at harmonization and little 

distinction between widely available, low-technology 

items that could easily be obtained by foreign buyers 

and the few most sensitive “crown jewel” U.S. technologies that warrant the greatest security often went 

unprotected due to the system’s vast purview and 

demands. The system has an overly broad definition 

of what should be subject to export classification and 

control, requiring the annual issuance of more than 

100,000 licenses each year. The natural tendency of that 

number is to increase since it is easy to get on a control 

list (bureaucrats consider it safer to regulate than risk 

being blamed for exporting dangerous items) but very 

hard to get off (requires senior-level approval as well 

as congressional notification). Since almost all license 

applications were approved, this is a very expensive 

and resource-demanding process. It also presents the 

danger that, with such a dissipation of effort, the most 

sensitive items are slipping through the cracks since 

the lengthy list of controlled technologies taxes the 

finite U.S. intelligence monitoring capabilities and resources. Agency actors can focus their energies on the 

process—determining which list an item falls into and 

which agency has jurisdiction—rather than whether 

an item can be safely exported and to whom.

Some claim that ITAR’s national security benefits 

outweigh potential economic costs. They cite numerous cases in which tight export controls have resulted 

in the apprehension of illegal traffickers.120 Proponents 
30

also state that the United States is better able to retain 

its technological advantage by instituting tougher 

restrictions on the flow of weapons in and out of the 

country, and thus stifling the ability of competitors or 

third-party subversive elements to obtain sensitive 

technology.121 Moreover, they claim that the government has discretion in licensing to further domestic/

international aims of the country, i.e., by leveraging 

the issuance of licenses against perceived state interests in export controls.122 Moreover, despite the ITAR 

process, the United States remains the largest weapons exporter in the world by far. Whether these perceived benefits appear collectively to outweigh the 

quantifiable economic detriment they place on certain 

export markets is questionable, but, of course, those 

working to improve ITAR want to retain its benefits 

while reducing its costs, resulting in a net gain for the 

United States. 

RECENT AND PROPOSED CHANGES

Proposals to reform the U.S. export controls have 

been discussed for years, especially after the end of 

the Cold War, but it was not until recent years that 

a U.S. presidential administration made export control reform a priority.123 The administration’s export 

reform drive has been based on several principles, as 

outlined in an ECR 2010 work plan: 

• focus only on most militarily significant items;

• fully coordinate controls with multilateral regimes since export control typically requires 

transnational partners to succeed;

• unilateral controls must support a legal or foreign policy objective;

• lists must clearly identify controlled items 

and be easily updated as technology emerges, 
31

matures, or becomes widely available (items 

can “cascade” between categories, typically 

from more to less restrictive);

• make licensing processes predictable and 

timely;

• enhance enforcement capabilities; and,

• facilitate exports of items promoting U.S. counterterrorism goals.

In their public statements, administration officials 

have described export reform mostly as a national security goal with ancillary commercial benefits rather 

than primarily as an export promotion or comprehensive deregulation initiative.

The reform process began as soon as the Obama 

administration assumed office, appointed its national 

security team, and established its national security 

decisionmaking system. On August 13, 2009, Obama 

directed the National Economic Council and the National Security Council to conduct a comprehensive 

interagency review of the U.S. export control system 

in order to craft a series of recommendations that better promoted U.S. national security and nonproliferation goals and begin implementing them.124 The President also directed the U.S. intelligence community to 

conduct the first ever U.S. National Intelligence Estimate (NIE) on export controls. Among other results, 

this NIE concluded that the U.S. commercial sector, 

rather than the military, was leading development 

of the next generation of national security-related 

technologies, which resulted in the administration’s 

stressing the goal of supporting the U.S. defense industry as a foundation of U.S. power.125 Among other 

adverse effects, ITAR restrictions on high-end exports 

likely decrease U.S. comparative advantage in international trade. In a speech on April 20, 2010, Gates, who 
32

became a leading force for the new reforms, proposed 

a four-pronged approach towards a more effective 

and efficient export control system based on achieving four “singularities.” The first step was a single 

unified tiered control list for both dual-use and munitions exports, based on three tiers of controls for different types of items, with the most stringent controls 

on exports viewed as those most dangerous for U.S. 

security interests:

• Tier 1 items are weapons of mass destruction, 

almost exclusively available from the United 

States, that provide critical military or intelligence advantage and, therefore, should be the 

most strictly guarded.

• Tier 2 items are almost exclusively available 

from multinational export regime partners or 

adherents; they provide a substantial military 

or intelligence advantage to the United States 

or its allies, who would import these items 

without a license.

• Tier 3 items are widely available goods and services that provide only some military or intelligence advantage; this tier would include other 

items controlled for national security, foreign 

policy, or human rights reasons.

The second objective was to establish a single licensing entity that used standardized processes and 

had jurisdiction over both munitions and dual-use 

items and technologies. The administration has sought 

to streamline the review process to ensure that export 

decisions are consistent and to clarify where and how 

to submit export license applications, as well as which 

technologies and items are likely to be approved. The 

third goal has been to create a single enforcement coordination entity that employed a frequently updated 
33

and consolidated list of banned end-users. The fourth 

and last of these objectives would be to form a single 

IT system that used a single online database for receiving, processing, and screening new license applications and their intended end-users.

The Obama administration has been employing a 

three-phase approach, doing what it can on its own initiative while seeking to work with Congress to secure 

authorization and funding for a more comprehensive 

transition to a new system. In Phase I, the administration has tried to make immediate improvements and 

establish the foundation for creating the new system. 

Using its existing authorities, the administration has 

developed a single license application form, established a single electronic gateway for exporters to access the licensing system, created a government-wide 

consolidated end-user screening list, increased coordination among export control enforcement agencies, 

and established Strategic Trade Authorization (STA) 

for dozens of close allies and regime partners. The administration also launched a successful campaign to 

secure Senate approval of the defense trade cooperation treaties with Australia and the UK, but has not 

sought additional bilateral treaties, instead aiming 

for comprehensive and universally applicable export 

reform that the United States can implement through 

its national legislation and regulations, albeit coordinated with foreign partners when possible.

 In Phase II, which is currently underway, the administration aims to transition to a new U.S. export 

control system by restructuring the two control lists 

into identical tiered structures to reduce the quantity 

of licenses required. They are using the same definitions on both lists and establishing a framework, 

where, if the President determines it is warranted, 

an item can be moved from the USML to the CCL, 
34

or it may be removed from the lists altogether. The 

administration launched its efforts to reform the categories in the Munitions List by making the previous nebulous classifications more clear and distinct, 

using “positive” definitions that define what items 

fall within a category. Of special interest to the U.S. 

Army, the Departments of Commerce and State chose 

to start this process by converting Category VII of 

USML, which covers Tanks and Military Vehicles, as 

well as Category VIII (military aircraft). U.S. defense 

exporters and foreign importers now can work with 

a narrower list that excludes many items that previously had been considered defense ground vehicles. 

Excluding clearly defined military vehicles and “specially designed” (as defined by the regulations) parts, 

components, accessories, attachments, and related 

technology and software, the remaining items in Category VII have been moved to the CCL. The State and 

Commerce Departments now consider the completed 

reclassification for Category VII as an example of how 

to approach the other categories. The administration 

has also sought to transition toward a single IT system 

for export licensing and enforcement, remove or add 

unilateral controls as appropriate, work with foreign 

partners to change multilateral controls, and expand 

enforcement compliance, but also outreach, with 

domestic and foreign partners.

The proposed Phase III reforms require congressional legislation to complete the transition to a fundamentally new U.S. export control system. This new 

system would merge the two control lists into one 

single list, create a single Export Licensing Agency, 

a single Primary Enforcement Coordination Agency, 

and one enterprise-wide IT system for both licensing 

and enforcement.
35

The Obama administration has made progress 

toward updating USML from a negative list, characterized by general and vague descriptions of defense 

articles and design intent, to a positive list specifying 

what precisely is controlled, increasing its resemblance to the current CCL.126

In terms of procedure, the Obama administration’s 

ECR initiative has drafted many proposed new “final 

rules.” Each final rule is effective 180 days after being 

published in the Federal Register. Before each rule is 

finalized, the Department of State publishes proposed 

rules for public comment. The Department of Commerce publishes its own separate rules regarding the 

CCL. Each comment period for the CCL lasts 30 days 

and any entity may provide comments to that Department. After reviewing these comments, Commerce 

may publish an updated proposed rule for additional 

comment. 

In early-2013, the administration published its first 

final categories (for gas turbine engines, aircraft, classified articles, and miscellaneous articles). These revised Categories, VIII, XVII, XIX, and XXI of USML, 

took effect in October 2013.127 On July 8, 2013, Commerce released additional amendments to Categories 

VI, VII, XIII, and XX; these new final categories for 

vessels, military vehicles, auxiliary military equipment, and submersibles took effect in early January 

2014. In April 2013, the State and Commerce Departments modified the definition of “aircraft” in USML 

to include only those planes that are used for military 

purposes, which allowed the transfer of thousands 

of items from USML to the less stringent CCL.128 The 

already published final rules revise ITAR sections 

on aircraft, gas turbine engines, technical data, naval equipment, military vehicles, “auxiliary military 

equipment,” and submersibles.129 On January 2, 2015, 
36

the Departments of Commerce and State issued additional final rules revising USML Categories IV (launch 

vehicles and missiles), V (explosives), IX (military 

training equipment), X (protective personnel equipment), and XVI (nuclear testing equipment) which 

took effect that summer.130 These 13 Munitions List 

categories (of the 21 in total) that have been published 

in final form encompass almost 90 percent of U.S. export licensing and more than $80 billion in actual exports each year, which generates almost 450,000 jobs 

in the United States. The next priority for revising the 

Munitions List is to publish final rules for satellites, 

electronics, and chemicals.131 Accompanying this process, Commerce also created a new “600 Series” of 

Export Control Classification Numbers for each CCL 

category.132 As of mid-2014, 15 of 21 USML categories 

have been updated. Figure 1, from the State Department’s Directorate of Defense Trade Controls, illustrates this progress.133

USML Category Key Milestones Federal Notice (s) Register

No. Description Effective

Date

Transition 

End Date

Final 

Rule

Correction 

Rule

I Firearms TBD TBD TBD TBD

II Artillery TBD TBD TBD TBD

III Ammunition TBD TBD TBD TBD

IV Launch Vehicles, 

Guided Missiles, 

Ballistic Missiles, 

Rockets, Torpedoes, Bombs, and 

Mines

7/1/2014 6/30/2016 79 FR 34 79 FR 36393

V Explosives and 

Energetic Materials, 

Propellants, Incendiary Agents, and 

Their Constituents

7/1/2014 6/30/2016 79 FR 34 79 FR 36393

Figure 1. USML Update Progress.
37

Figure 1. USML Update Progress. (cont.)

USML Category Key Milestones Federal Notice (s) Register

No. Description Effective

Date

Transition 

End Date

Final 

Rule

Correction 

Rule

VI Surface Vessels of 

War and Special 

Naval Equipment

1/6/2014 1/5/2016 78 FR 40922 79 FR 26

VII Ground Vehicles 1/6/2014 1/5/2016 78 FR 40922 79 FR 26

VIII Aircraft and Related 

Articles

10/15/2013 10/14/2015 78 FR 22740 78 FR 61750

IX Military Training 

Equipment

7/1/2014 6/30/2016 79 FR 34 79 FR 36393

X Personal Protective 

Equipment

7/1/2014 6/30/2016 79 FR 34 79 FR 36393

XI Military Electronics 12/30/2014 12/29/2016 79 FR 37536 TBD

XII Fire Control/Sensors/Night VisionTBD TBD TBD TBD

XIII Materials and Miscellaneous Articles1/6/2014 1/5/2016 78 FR 40922 79 FR 26

XIV Toxicological 

Agents

TBD TBD TBD TBD

XV Spacecraft and 

Related Articles

11/10/2014 11/9/2016 79 FR 27180 TBD

XVI Nuclear Weapons 

Related Articles

7/1/2014 6/30/2016 79 FR 34 79 FR 36393

XVII Classified Articles, 

Technical Data, and 

Defense Services

10/15/2013 10/14/2015 78 FR 22740 78 FR 61750

XVIII Directed Energy 

Weapons

TBD TBD TBD TBD

XIX Gas Turbine Engines and Associated Equipment10/15/2013 10/14/2015 78 FR 22740 78 FR 61750

XX Submersible Vessels and Related 

Articles

1/6/2014 1/5/2016 78 FR 40922 79 FR 26

XXI Articles, Technical 

Data, and Defense 

Services Otherwise 

Not Enumerated

10/15/2013 10/14/2015 78 FR 22740 78 FR 61750
38

USML Update Progress.

The revisions of the Munitions List have been continuing throughout 2015. On May 5, 2015, the DDTC 

published a proposed rule revising USML Category 

XII (fire control, range finder, optical, and guidance 

and control equipment), while the BIS issued a proposed rule detailing how items removed from Category XII would be controlled under the CCL 600 

series. The BIS also proposed to expand controls and 

create new ECCNs for certain software and technology related to night vision items. On June 17, 2015, 

the DDTC published a proposed amendment to revise 

USML Categories XIV (toxicological agents, including chemical agents, biological agents, and associated 

equipment) and XVIII (directed energy weapons), 

while the BIS again simultaneously issued a proposed 

rule describing how articles removed from Categories 

XIV and XVIII would be controlled under the CCL.134

Phase II of ECR will be complete when all 21 categories have been updated and approved, and when all 

pertinent departments (State, Commerce, Defense, 

and Treasury) have transitioned to a unified database. 

The relaxation of restrictions on commercial space 

exports has attracted much attention. Section 1248 

of the National Defense Authorization Act for Fiscal 

Year 2010 directed the Secretaries of Defense and State 

to conduct an assessment of the risks associated with 

removing commercial satellites and related components from USML.135 The Departments of State and 

Commerce issued rules regarding these items at the 

end of 2011.136 The study, known as the 1248 Report 

and completed in April 2012, showed that certain satellite-related technologies were inappropriately listed 

under ITAR because these items were not critical to 
39

U.S. national security and did not contain technology 

exclusively available to the United States.137 The report 

provided a list of articles that could be transferred 

from ITAR to the EAR due to their lower sensitivity.138

In October 2013, the White House issued a “Presidential Determination to Facilitate Satellite Reclassification” to transition export controls for certain satellites 

and related items from USML to the CCL.139

The U.S. space industry has welcomed these 

changes but called for further measures. For example, 

to help small space companies, the Space Foundation 

proposes eliminating the requirement for a license to 

transfer defense articles between “U.S. and overseas 

divisions of the same company . . . provided all sites 

are ITAR-compliant.”140 Another solution is to create a 

database that allows exporters to “see which customers have been granted access to certain categories of 

ITAR-controlled exports and which customers require 

greater scrutiny for certain transactions.”141 This step 

would save exporters time and money by allowing 

them to determine more easily which customers were 

ITAR-compliant and would also incentivize foreign 

companies to improve their compliance to avoid 

obtaining a negative rating in the database.142 These 

solutions might also be applicable to other ITAR-controlled industries. 

Most of the work done on these parts of USML 

has been to eliminate “catch-all” clauses with the 

result that all items that are not specifically affirmatively listed on USML move to the more lenient Commerce EAR list.143 One primary aim of the changes is 

to decrease the stringency of rules that affect small 

machine parts that could have multiple uses. Furthermore, the USML has reclassified commercial satellites 

(COMSATS) as civilian goods, thus, they have become 
40

ITAR-Free.144 Section 1261 of the National Defense 

Authorization Act for Fiscal Year 2013 returned to the 

President the power to determine which regulations 

govern the export of satellites and/or satellite-related 

articles. On May 13, 2014, DDTC and BIS established 

final interim rules for satellite export control revisions 

and less-sensitive items were moved from USML to 

CCL.145 The rules implemented a proposal to establish 

four new ECCNs that would fall under Category 9 of 

the CCL. They define the controls of EAR for items that 

the President deems are unnecessarily controlled under Category XV of USML and that do not fit into any 

current ECCNs. ECCN 9A515 pertains to “specially 

designed” parts, components, attachments, and accessories as well as ground stations and spacecraft; 9B515 

pertains to associated inspection, production, and test 

equipment, in addition to the “specially designed” 

components; 9D515 pertains to associated software; 

and 9E515 pertains to associated technology.

Further rules came into effect in late-2014 that 

amended Category XV of USML, which includes 

spacecraft and associated articles, and Category IV, 

concerning “spacecraft-launching vehicle integration 

and launch failure analysis services.” Other changes 

include adapting modifications to the specific export 

controls for satellites and satellite launches and adding telemetry data to the group of exclusions from 

technical data.146 Certain articles have been transferred 

from USML to CCL Category 9, such as some remote 

sensing satellites, planetary rovers, and the majority 

of commercial communications satellites, as well as 

associated technologies, components, and parts. Also 

newly subjected to the EAR are: 
41

data transmitted to or from a satellite or spacecraft, 

when limited to information about the health, operational status, or function of, or measurements or raw 

sensor output from, the spacecraft, spacecraft payload, 

or associated subsystems or components,147

labeled as EAR99. Although commonly less strict than 

ITAR, satellite products, technology, and software on 

the CCL will still be regulated by end use, end-user, 

and country-based controls through the EAR. Remaining under the export control of ITAR in USML’s Category XV are items with high-level sensors and those 

that have space-related military functions, as well as 

the majority of manned spacecraft.148

The changes notably depart from ITAR’s “seethrough” rule, as items on the new ECCN 9A515 still 

fall under the control of the EAR, even if “exported, 

re-exported, or transferred in-country with ITAR-controlled items integrated into and included as integral 

parts of the EAR-controlled commodity.”149 COMSATs new control under 500 series classification numbers of the CCL help to avoid this rule, which forces 

manufacturers to tell all customers that their product 

is a defense article, establishing that it will always 

be controlled as a U.S. munition. However, the rules 

still include a restriction to embargoed countries like 

China. Critics worry that a new see-through rule will 

be developed under the EAR, which will have a similar effect of causing foreign manufacturers to avoid 

American technology. Given Europe’s negative history with ITAR’s see-through rule and the European 

Union’s recent promotion of space collaboration with 

the Chinese, the European space industry will likely 

seek to avoid any new see-through rule under the 

EAR by avoiding the use of U.S.-origin items.150
42

The Obama administration also wants to address 

the problem that the U.S. Munitions List often blurs 

the lines between the separate lists of regulated products managed by both the State and the Commerce 

Departments, potentially confusing a contractor or 

exporter about where to apply for licensing. For example, many items on USML were listed as subject to 

ITAR if they were “specifically designed” for military 

applications. The lack of clarity in the phrase “specifically designed” was brought into sharp relief in the 

2009 circuit court case of United States v. Palungun, in 

which a man exported riflescopes without a DDTCissued license. DDTC deemed him in violation of the 

AECA, but his conviction in a lower court was overturned on appeal. The reviewing judge found that 

the DDTC’s decision that the riflescopes constituted 

a regulated defense article was arbitrary, and the rule 

(written into the AECA) that the decision could not 

be subjected to judicial review was inappropriate.151

The term “specifically designed” applies to devices or 

software designed for defense usage that do not constitute a defense article on their own (a large category, 

given how many modern defense items are built with 

small parts and run on complex software). 

Because the “specifically designed” distinction remains in several parts of USML, the first newly published rules sought to update the definition and clarify 

the boundary lines between Commerce and State in 

order to facilitate the transfer of items from USML to 

the CCL.152 The new definition employs a “catch and 

release” approach, whereby the first part of the definition may capture an item as specially designed for 

military use and the second part may release it provided the item does not meet specific parameters. The 

goal is to allow the more flexible rules of the EAR to 
43

apply to less sensitive items, while the State Department focuses its resources on more sensitive items and 

on eliminating ambiguity regarding the scope of each 

set of regulations. Since the “specifically designed” 

designation is often very unclear, the ECR has tried to 

limit the number of times where it appears, opting instead to describe defense articles in terms of their size, 

shape, lethality, or other factors. Under the new interpretation, if an article is built with the intent of helping another item on USML achieve its intended aims, 

it is considered “specifically designed” for that purpose.153 The second part of the definition offers a set of 

caveats, essentially saying that “a commodity should 

not be ITAR controlled if it has a predominant civil 

application or has performance equivalent (defined by 

form, fit, and function) to a commodity used for civil 

applications.”154 These definitional changes likely will 

streamline the process of applying for licensing, eliminate the need for commodity jurisdiction requests, 

and save defense companies valuable time.155

On January 15, 2014, the Obama administration issued Presidential Policy Directive 27 to ensure that U.S. 

conventional arms transfers support the U.S. national 

security and U.S. foreign policy goals. Yet, 13 months 

later, the State Department released a new policy 

concerning U.S. exports of military unmanned aerial 

vehicles (UAVs) and their technologies.156 The new 

policy will assess on a case-by-case basis the proposed 

sale of U.S.-made military and commercial unmanned 

aircraft systems (UAS) and will require recipient nations to agree to “end use assurances” that they will 

use such purchases only in accordance with U.S. security interests and international law. Although permitting the export of Category I UAS on “rare occasions,” 

the new policy reaffirms the U.S. commitment to the 
44

Missile Technology Control Regime (MTCR), which 

maintains a “strong presumption of denial” against 

the sale of Category I UAS capable of delivering a 

payload of at least 500 kilograms with a range of 300 

kilometers.157 This separate approach reflects the fact 

that the administration does not view UAVs as typical 

conventional weapons, but wants enhanced oversight 

of them to ensure a disciplined framework in which 

the United States can exercise restraint in sales while 

enhancing bilateral ties with allies and trusted foreign 

partners.158 Thus, the new U.S. drone policy, while accelerating decisionmaking and benefitting particular 

firms, may restrict some UAV sales.159 Conversely, 

those countries participating in the Wassenaar Arrangement, a voluntary group of 41 nations including 

the United States that aim to promote international 

security in transfers of conventional arms and dualuse technologies, have since liberalized the sale of 

commercial UAVs outside of the United States. Due 

to this ruling, commercial UAVs possessing a range of 

less than 30 minutes will no longer require an export 

license from the Department of Commerce, which will 

amend the EAR.160

Beyond the reforms to the Munitions Lists, some 

progress already has been achieved in facilitating the 

employment of foreign nationals. New regulations enacted in 2011 facilitate approval of the transfer of defense articles to dual and third country nationals. Before this reform, a company needed to seek approval 

before allowing either a dual or third country national 

to work with defense articles. A “dual country national” is one who is a national of their employer and 

a national outside of the United States, while a “third 

country national” is one who is neither a national of 

their employer nor the United States. One of the main 
45

issues stemming from this former regulation was that 

companies had to question potential employees as to 

what their national origin was, which could violate 

labor and human rights laws if an employee was not 

hired due to their national origin. This new rule aimed 

“to replace the current restrictions based on nationality with restrictions based on concrete risk factors to 

mitigate the likelihood of unauthorized transfers.”161

As long as an entire transaction is under the proper 

ITAR licensing process, the presence of foreign nationals in companies carrying out the transactions no 

longer needs separate approval.162

Treatment of nationals of the NATO countries, 

Australia, New Zealand, and Japan is even more favorable under the new rules.163 The only two requirements regarding dual and third country nationals 

under this new law are that “the transfer takes place 

completely within the physical territory of the country where the end-user is located and the end-user has 

effective procedures in place to prevent diversions to 

unauthorized destinations.”164 The second requirement forces companies to create a screening program 

to prove to the DDTC that their dual and third country 

national employees do not have substantive contact 

with proscribed countries, unless that employee has a 

security clearance from their government in which the 

substantive contact rule would not matter. The DDTC 

defines substantive contact as: 

regular travel to such countries; recent or continuing 

contacts with agents, brokers and nationals of such 

countries; continued demonstrated allegiance to such 

countries; maintenance of business relationships with 

persons from such countries; maintenance of a residence in such countries; receiving salary or other continuing monetary compensation from such countries; 

acts otherwise indicating a risk of diversion.165
46

In May 2015, DDTC proposed to amend section 

22 CFR §126.4(a) to permit “permanent” exports for 

official use (existing regulations permit “temporary” 

imports and exports under conditions of “urgency”) 

by U.S. Government agencies working outside the 

United States. This proposed rule would help alleviate 

some confusion that U.S. Government contractors face 

when exporting ITAR-controlled products, technical 

data, and software to U.S. Government customers that 

happen to be located outside the United States or to 

their American employees in foreign offices that work 

as “contractor support personnel” for U.S. Government customers situated overseas.166 Furthermore, in 

June 2015, the Department of Commerce and the Department of State narrowed the definition of a digital 

export. The transfer of data is no longer considered an 

export if the data is unclassified, secured with encryption and cryptographic modules, and not stored in a 

country listed on the Country Group D:5 profile (Bureau of Industry and Security [BIS] countries subject 

to U.S. arms embargoes as identified by the State Department) or in the Russian Federation.167 Yet, critics 

claim that the new rule will burden U.S. and foreign 

companies with establishing a system to ensure that 

their employees do not violate the substantive contact 

rule.168

One recommendation is to grant the individual, 

agency, or country a comprehensive blanket license 

once they have received an ITAR license. This option 

would be geared towards the academic community 

so that universities do not have to apply for a new 

license—and wait for an approval—whenever they 

want to start a new project.169 An “academic” license 

might be developed that would apply to an entire 

foreign country and allow its students to study and 
47

work in the United States without having to apply for 

a separate license for themselves. Another proposal 

is that once a country, agency, or company receives a 

license for one item, then that license could apply to 

the same items in the future.170 All these recommendations would benefit not only the license recipients but 

would also ease the DDTC’s workload, lowering its 

costs and allowing licenses to be issued faster. 

Perhaps the most ambitious ECR attempt to 

streamline the process is to create a single U.S. arms 

export licensing agency in order to reduce wait times 

for export licenses (which can be over a month) and 

decrease general confusion about licensing.171 Unlike 

other countries that export defense articles, the U.S. 

arms export regime is controlled by three agencies: 

DDTC, BIS, and the Treasury Department’s Office of 

Foreign Assets Control. They have overlapping functions when it comes to ITAR. A GAO report found that 

only one out of the six major foreign defense exporters 

they studied had more than one agency handling defense exports, thereby avoiding the problem of overlapping jurisdiction.172 The U.S. multiagency approach 

is a creature of another era, when products were designed with only a military or a civilian intent.173 Another common problem is that the different agencies 

often do not communicate with one another regarding 

which license requests have been accepted or denied, 

leading to surprises and misunderstandings. 

In 2010, the Obama administration recommended 

that a “single control list, enforcing agency, information technology system, and licensing agency” be 

implemented to make all exports, especially ITAR 

products, more efficient.174 It is unclear whether a 

single licensing agency is necessary to solve this problem; perhaps better information technology (also on 

the ECR agenda) might do just as well.175 On June 3, 
48

2015, the Departments of Commerce and State published notices in the Federal Register proposing rules 

to harmonize the definitions used in ITAR and EAR 

as a step toward establishing a single shared export 

control list.176

On June 16, 2011, the Bureau of Industry and Security published a new Strategic Trade Authorization 

(STA) licensing exception to expedite transfers to as 

many as 44 countries that pose limited risk and to stimulate coordination among allies.177 The STA authorizes 

the export, re-export and in-country transfer of certain 

dual-use items and less significant munitions items, 

predominantly parts and components, on the CCL to 

allies and friendly countries deemed as posing a low 

risk of unauthorized or impermissible end uses.178 Although they are exempt from acquiring a specific license for these transactions, they must meet enhanced 

compliance requirements to prevent the re-export of 

covered U.S. EAR goods to unauthorized end-users. 

For example, they must certify that they will adhere 

to U.S. export control regulations, such as obtaining a 

U.S. license to export these items to non-STA eligible 

countries, and meet notification and consignee statement requirements.179 The License Exemption STA applies to two groups of countries. The STA authorizes 

the first group, consisting of 36 countries, to export, 

re-export, and make in-country transfers of products 

and technologies that are controlled for multiple reasons, including national security, nuclear nonproliferation, regional stability, crime control, chemical or 

biological weapons, and “significant items.”180 The 

remaining eight countries are authorized to export, 

re-export, and make in-country transfers that are 

subject only to national security controls.181 Items excluded from License Exception STA include encryption, certain pathogens and toxins, certain gas turbine 
49

engine-related software and technology, certain types 

of missile technologies, and crime control items.182

The Department of Commerce estimated that the STA 

will remove the need for tens of thousands of export 

licenses and retransfer authorizations annually.183

After struggling with its IT system, the BIS replaced 

all of its computers in 2010 in order to facilitate the 

transition to one single IT system. The U.S. Export Systems (USXPORTS) database of the DoD is expanding 

to include the State Department and the Department 

of Commerce.184 As these three departments begin to 

use the same platform, the White House explains that 

“the three largest departments involved in export licensing will be on a single IT system, enabling them 

to better administer the licensing process and ensure 

that decisions made by the different departments are 

fully informed.”185 Designed to rationalize the licensing review process among the various agencies, it will 

serve as a foundation for the desired single licensing 

agency following completion. First, the administration wants USXPORTS to be adopted for internal communications. The administration has also created a 

single license application form.186 Instead of applying 

for multiple licenses, Special Comprehensive Licenses 

(SCL) authorize companies who have established License Control Programs to conduct multiple exports. 

The administration hopes that in the future it will realize not only a single license review platform, but also a 

system for single submission and review.187

DEFENSE SECURITY COOPERATION AGENCY 

VISION 2020 STRATEGY

The Defense Security Cooperation Agency (DSCA), 

the office responsible for initiating Foreign Military 

Sales (FMS) with other governments, recently issued 
50

a new strategy aimed at rationalizing the FMS process 

and strengthening coordination with partner nations. 

A major component of the policy is the Vision 2020

strategy, which pushes Congress to streamline certain 

provisions under the Arms Export Control Act that 

permits government sales to allied countries, but restricts the transfer of such products to a third country. 

As NATO attempts to improve coordination through 

initiatives for joint development and the merging of 

assets and technology, this restriction is becoming a 

problem. It hinders the United States from being able 

to coordinate and support nonmember partner nations that need military assistance.188

DSCA states that Vision 2020 aims to promote “a 

whole-of-government effort to build and maintain 

networks of defense relationships that achieve U.S. 

national security goals.” Its three main goals are to 

synchronize “security cooperation activities,” meet 

“customer expectations,” and ensure “the effective 

and efficient use of community resources.” Regarding 

the synchronization of security cooperation activities, 

it strives to lead coordination throughout the Security 

Cooperation Enterprise (SCE) by enabling effective 

decisionmaking and breeding adaptability in its procedures. In terms of meeting customer expectations, 

it stresses the need to cater its solutions to specific 

customer concerns in order to stay competitive in the 

international market and employ complete strategies. 

Pursuing efficiency and effectiveness, the DSCA highlights the need to use all the tools at its disposal and 

best manage declining resources.189

In order to avoid the roadblocks to effective cooperation brought on by the Arms Export Control 

Act, DSCA is making certain structural changes to its 

organization. For example, it has created integrated 
51

regional teams that coordinate with the Pentagon’s 

geographic combatant commanders in order to identify the specific needs of allied countries so that they 

can proactively address them. These reforms have 

been driven by tightening U.S. and foreign budgets, 

as well as increasing competition in the global marketplace, raising consumer pricing, and improving 

quality demands. While the United States historically 

has approached FMS conservatively, the evolving international market has forced them to adapt.190 DSCA 

Senior Strategic Analyst Clayton Holt explained: “We 

had to be more responsive and provide our customers 

with a more responsive organization with more transparency, more visibility, so people could understand 

what’s happening.”191The new approach aims to make 

the government more proactive in supporting the defense needs of non-NATO foreign partners.192 Still, it 

is only a modest step in the process and other reforms 

must come as well.193

EXPORT-IMPORT BANK

A related issue that could impact export control 

reform is the future role of the Export-Import (Ex-Im) 

Bank, whose future is under debate in Congress and 

beyond. The administration wants to renew its charter, but opposition in Congress to the Bank is strong, 

while some proponents want the Ex-Im Bank to return to its earlier mission of funding U.S. arms sales. 

The Bank is the official U.S. credit export agency offering loans to finance U.S. exports. The Bank’s website states that it “enables U.S. companies—large and 

small—to turn export opportunities into real sales that 

help to maintain and create U.S. jobs and contribute to 

a stronger national economy.”194 It is an independent 
52

agency and functions through the Export-Import Bank 

Act of 1945, a renewable charter. Congress establishes that financing by the Ex-Im must have assurance 

for repayment and stresses that it is to complement, 

rather than compete, with private money. The Ex-Im 

bank also follows the international guidelines laid out 

by the Organization for Economic Cooperation and 

Development. In fiscal year (FY) 2013, the Bank authorized 3,842 deals of support, resulting in $37.4 billion 

in American exports. As of March 31, 2014, the Ex-Im 

declares a default rate of 0.211 percent and claims that 

since 1992, it has a 50 cents on the dollar recovery rate 

for defaults. Most of its work revolves around direct 

“loans, loan guarantees, working capital finance, and 

export credit insurance.” Normally, sales to military 

purchasers and defense or military goods are ineligible for financing, but there are some exceptions.195

Until the end of the Cold War, the Ex-Im Bank 

supported U.S. national security endeavors. As World 

War II escalated, President Franklin Roosevelt used 

the Ex-Im bank to support the new Soviet Union and 

to counter Japanese economic control in China and 

growing German influence in Latin America. The 

Bank bought foreign government notes, such as those 

from Mexico and Nicaragua, seeking to keep these 

states politically and economically tied to the United 

States.196 The Bank financed close to $500 million per 

year in arms sales during the Cold War.197 The executive branch also used the Ex-Im Bank to avoid foreign 

aid restrictions, which brought criticism from both 

sides of the political sphere. Republicans opposed issuing loans to build plants in Soviet bloc states, while 

the left was outraged when the Bank evaded congressional restrictions on military assistance for Vietnam. 

They also complained when the Bank funded both 
53

sides of a conflict, such as India and Pakistan.198 Congress eventually ended the Bank’s direct arms export 

role by creating a distinct defense loan guarantee program that is hardly ever used.199 Nonetheless, a major 

component of the debate over the Bank’s reauthorization is the effect that changes will have on U.S. arms 

and defense exports. Citing an already large defense 

industry, opponents of the Bank believe that U.S. arms 

exporters do not need further financial support, while 

advocates for the Bank, often defense and aerospace 

companies themselves, state that the Bank is essential 

for allowing U.S. exporters to compete effectively with 

major foreign powers. 

Critics of the Ex-Im believe it inappropriately tries 

to choose winners and losers when deciding whom to 

support.200 Detractors argue that the Bank represents 

an example of unjustified, inefficient corporate welfare by giving wealth to major corporations that are 

politically connected.201 American taxpayers must assume the risk of these loans, while the reward goes 

to corporations.202 Opponents believe that companies 

that utilize the Bank’s programs could, if they are 

good at what they do, easily obtain alternative private 

sector funding. Furthermore, U.S. firms that do not receive as much help from the Ex-Im Bank sometimes 

must compete with foreign companies that do.203 Critics claim that issuing direct subsidies would more efficiently support U.S. arms sales.204 They also complain 

about the distortions that result when unsubsidized 

exports struggle to obtain funding because the Ex-Im 

Bank encourages lenders to focus on subsidized projects. Thus, contrary to supporters of the Bank, foreign 

governments are not threatening the health of U.S. 

exports, but rather the American government itself.205
54

Supporters of the Ex-Im Bank contend that letting the bank’s charter expire would be a poor strategy and unilaterally disarming since many other 

countries have agencies that finance exports.206 The 

Ex-Im Bank’s greatest benefactors and often greatest 

supporters are the U.S. defense and aerospace giants 

such as Boeing. The Bank helps them increase exports 

without having to conduct all the demanding financing work.207 Proponents also believe that the Bank 

can help the United States to remain competitive in 

the international nuclear energy market, which will 

support U.S. nuclear nonproliferation goals.208 Some 

want to enlarge the Bank’s mandate to renew its authority to fund major arms deals.209 A priority would 

be offering loans to less developed countries in Latin 

America, the Middle East, and Africa, where Russian 

and Chinese arms dealers are most active.210 Critics 

condemn the idea that the Bank should finance arms 

deals and should, instead, support other U.S. foreign 

policy goals. Among other concerns, they worry that 

the Ex-Im Bank is controlled not by the Departments 

of State or Defense but by major, politically connected 

corporations who would prioritize their corporate interest over the national interest.211

EFFECTS AND OBSTACLES

If implemented as intended, an improved export 

reform system would benefit many U.S. exporters as 

well as several manufacturing sectors and countries. 

Fewer controls, clearer criteria, and more rapid licensing would eliminate some export barriers and produce additional benefits. A standardized export control system for U.S. technologies and manufacturers 

would make U.S. products and services more compet-
55

itive by making the licensing process clearer and more 

efficient. The rationalization of export controls would 

make the United States more attractive to foreign direct investment because such companies would find 

it easier to export products from the United States. 

U.S. businesses could leverage new technology transfer flexibility for more advantageous joint ventures. 

In terms of specific goods and services, all exporters 

will benefit from reduced jurisdictional conflicts and 

streamlined government oversight, but some sectors 

will benefit more than others. Many items on USML 

would be moved to CCL, while many items would be 

exempt from all controls. Restrictions could decrease 

on marine navigation systems, hydraulic parts, civilian microprocessors, computerized tools, construction 

equipment, and medical devices. Automobile and 

electricity generation equipment manufacturers could 

avoid the burden of obtaining government approval 

to export each part. U.S. national security should improve if U.S. law enforcement and intelligence entities 

were able to focus more on protecting only the most 

sensitive U.S. technologies and exports. The expanded 

opportunities for U.S. arms exports would increase 

interoperability with allies and partners that use the 

same military equipment.

The reforms would reduce the cost and delivery 

time of arms sales to foreign countries that otherwise 

must obtain individual export licenses for all spare 

parts and weapons subsystems. U.S. friends and allies 

would find it easier to purchase logistic support from 

U.S. arms manufacturers. For example, 20 percent of 

the export permits issued by the State Department in 

the past decade were for British customers and more 

than 90 percent were approved. The new STA allows 

for license-free export, with restrictions on re-export-
56

ing, of many dual-use items to two groups of countries. First, most European countries, plus Australia, 

Canada, New Zealand, Japan, South Korea, and Argentina, can import almost all items on the CCL that 

do not require a license by statute. Second, Albania, 

Hong Kong, India, Israel, Malta, Singapore, South Africa, and Taiwan are eligible for all items on the Wassenaar Arrangement Basic List. Meanwhile, countries 

like China and Saudi Arabia, whose governments are 

unpopular in the United States, would further benefit from depoliticizing the export approval process, 

which would decrease opportunities for U.S. domestic 

lobbies to oppose certain exports such as the sale of 

F-15 fighters to Saudi Arabia, the nuclear cooperation 

agreement with India, or the sale of communications 

routers to China. 

Many U.S. investment projects in China depend on 

technology transfer and co-production with Chinese 

corporations; obtaining U.S. Government approval is 

difficult. India would also benefit from export control 

liberalization, especially with regards to dual-use materials. U.S. electrical and aviation goods account for 

40 percent of total U.S. exports to India. The Indian 

Space Research Organization currently faces difficulty 

in gaining access to sensitive aerospace items and software. Foreign partners could more easily purchase 

middle- and lower-tier military equipment necessary 

for routine maintenance, research and development, 

and training. Such items could include satellite navigation guidance systems for precision-guided munitions, gas turbine engines for armored fighting vehicles, night vision gear, armor piercing ammunition, 

and nonlethal crowd suppression weaponry, which is 

also available from U.S. allies like France, Israel, and 

the UK. 
57

Human rights groups and others have already 

raised significant concerns about the potential of these 

reforms to erode the current laws that were established to keep U.S. defensive assets out of the hands 

of terrorists, torturers, and belligerents. They believe 

that the decontrols will make it more likely that dangerous items will reach such recipients. Furthermore, 

they expect that the resources needed to move large 

numbers of items from USML to the CCL may divert 

attention to oversight of items still on USML. Critics 

also fear that the new STA exemption may increase 

the amount of sensitive items sent to allies and friends 

that could become available to hostile third party actors.212 The administration argues that it is “a misconception that ECR is simply a decontrol effort that will 

result in U.S.-origin items being more widely available 

for use in human rights abuses. In fact, the opposite is 

true.” According to the administration, for example, 

even for the STA countries, the United States is relaxing controls only on less-sensitive items and strengthening the audit trail for any sales of these articles. In 

addition, for items removed from USML, “the eased 

licensing burden will be balanced by an increase in the 

enforcement resources focused on the export of items” 

moved to the CCL. Furthermore, the administration 

claims that it is expanding exports controls to items on 

the CCL that had not previously been subject to UN 

and U.S. arms embargoes.213

U.S. industry hopes that the reforms will continue 

to remove items from ITAR jurisdiction, resulting in 

greater predictability in the licensing system, reducing delays, and making U.S. exporters more competitive.214 For example, the reforms have been welcomed 

by the Aerospace Industries Association, whose members believe that the changes will strengthen oppor-
58

tunities for U.S. companies to sell space and satellite 

products internationally and level the playing field for 

the global market of such products.215 As of 2015, the 

average time to process an ITAR license request had 

fallen to about 25 days.216

Even so, while moving items from ITAR to the 

EAR presents visible action, sometimes the regulatory burden on U.S. exporters or foreign importers is 

not significantly eased. For example, changes in the 

EAR regulations created a new category for many 

aircraft parts moved off of USML, called the “600 

Series.”217 This new category requires more stringent 

licensing than other EAR items, which some exporters complain makes it hard to distinguish from previous ITAR-mandated licensing processes.218 Although 

Gates and other officials have claimed that creating a 

single list of restricted national security exports would 

streamline the U.S. arms export process, the new distinctions (“tiers”) within the list could engender more 

problems with arbitrary distinctions. Moreover, with 

so many different satellite and spacecraft items being 

transferred from USML and ITAR control to CCL and 

EAR control, space exporters and manufacturers may 

find it challenging to establish how their products fit 

into the new, complex, and shifting control system. 

They must master the regulations and licensing procedures of the DOC, which differ sharply from those 

of the DDTC.219

On November 9, 2010, Executive Order 13558 

created the new Export Enforcement Coordination 

Center (E2C2), a first step toward building a single 

clearinghouse for handling exports and coordinating 

licensing. The new center will coordinate the efforts of 

eight U.S. governmental departments and 15 federal 

agencies to detect, prevent, disrupt, investigate, and 
59

prosecute violations of U.S. export control laws by increasing the sharing of intelligence and law enforcement data.220 The E2C2’s mission aims to create: 

a more robust whole-of-government approach to enforcement that ensures interagency coordination, promotes multiagency collaboration, minimizes the duplication of efforts and strengthens the link between 

law enforcement, the intelligence community, and 

export licensing entities.221

On November 20, 2014, the Department of Commerce launched a web search tool for the Consolidated Screening List (CSL), a streamlined collection of 

nine different “screening lists” managed by the Commerce, State, and Treasury Departments. Altogether, 

CSL holds the names of more than 8,000 firms and individuals subject to U.S. export regulations, sanctions, 

or other restrictions—U.S. companies are generally 

prohibited from doing business with them.222 However, creating a single export licensing and screening 

agency would require legislation by a Congress still 

dissatisfied by the perceived problems of the most recent consolidation of executive agencies, the Department of Homeland Security, in 2003.223 It is unclear 

how beneficial a single licensing agency would be for 

U.S. arms exporters. It would likely reduce agency 

overhead and save money, but it may not accelerate 

the issuing of export licenses. Would a single agency, 

tasked with twice the work and twice as complicated 

a job as the DDTC and EAR, be more efficient? Probably not, though such an agency would also make the 

export process more transparent and organized.
60

Although the ECR should save the Pentagon money 

in the long run, the current budgetary crisis is impeding the reform’s implementation. To take one recent 

example, the DoD Better Buying initiative promotes 

the principle of design for exportability by mandating 

the use of “defense exportability features” in choosing weapons systems. However, the debate continues 

over who should pay for the short-term costs, which, 

in the long run, should increase U.S. military exports, 

raise interoperability, and reduce costs through larger 

production runs and other efficiencies.

The U.S. system of separation of powers presents 

major institutional barriers to export control reform. 

ECR Phase III will require major legislative changes 

to consolidate the reorganizations. Many different 

congressional committees have some authority over 

U.S. exports, and, at times, the different congressional 

committees have favored diverging approaches. One 

consideration that can often unite them is limiting the 

discretion of the executive branch and constraining 

near-term spending on reforms that will only have 

long-term payoffs. The Congress has not fully supported the administration’s reform plan, and no consensus has arisen behind the legislation required for 

wholesale reform. Even within the executive branch 

bureaucracy, the export reform issue pits U.S. national 

security against economic agencies. 

The final objective of the reform process is to amend 

every USML category, but the Obama administration 

is unlikely to complete revisions of the list by the time 

it leaves office in January 2017. The other envisaged 

reforms may take considerably longer than updating 

the Munitions List, raising the obvious question of 

whether the next administration will be as committed 

to reforming ITAR as the Obama administration, as 
61

well as whether it will seek the same export reforms or 

proceed in a different direction.

RECOMMENDATIONS

The U.S. Army should welcome efforts to reform 

the U.S. arms export process. A more competitive 

and vibrant U.S. defense industry can provide better 

military technologies to the Army and its allies. U.S. 

economic strength, reflecting general U.S. defense industrial capabilities, is the foundation of U.S. national 

power. U.S. arms sales reduce the Army’s overhead 

costs, maintain U.S. defense production lines and a 

highly skilled and trained workforce essential for resetting and reconstituting the force, expand the range 

of foreign defense suppliers, promote interoperability 

between U.S. and foreign military forces, and make 

important contributions to U.S. international account 

balances and national security.

The current regulations adopted during the Cold 

War are outdated in a global environment characterized by the proliferation and constant evolution of 

weapons technology. ITAR has long impeded U.S. 

defense firms seeking to compete in an increasingly 

global defense market. Although the United States 

has a larger share of the global arms market than any 

other country, reductions to the market, such as those 

caused by ITAR, impede U.S. Army goals. These impediments make it more difficult to sustain core U.S. 

defense technological and industrial advantages, reduce U.S. Army interoperability with foreign partners 

that purchase non-U.S. weapons, and create other 

undesirable effects for the U.S. Army and other U.S. 

military services.
62

Reform would allow the U.S. export managers to 

concentrate more on the national security concerns of 

the greatest importance, rather than wasting time and 

resources on insignificant considerations. By replacing a redundant, complex, and inefficient system, the 

United States would better secure U.S. national security interests, apply limited resources mostly to the 

most important threats, strengthen interoperability 

with allies through expedited and expanded access to 

U.S. weaponry, and bolster the U.S. defense industrial 

base by decreasing incentives for foreign companies 

and militaries to stop using U.S. exports. The creation 

of a single arms export list with “tiered” controls, with 

the most stringent controls applied only to the most 

sensitive exports, along with a single U.S. arms exportlicensing agency to manage the process by adjudicating license applications and enforcing these decisions, 

would reduce the time to approve export licenses and 

decrease the general confusion about licensing. 

The Quadrennial Defense Review directs DoD, including the Army, to promote innovation, prepare to 

fight with partners as well as alone, ensure that critical 

skills are retained, and be able to mobilize its capabilities for sustained conflict. Whatever the result of the 

current effort, it will be essential for future U.S. presidential administrations, members of Congress, and 

U.S. Army leaders to treat export control reform as a 

living and likely unending process, and to take into 

constant account any changes in threats, technology 

and other critical variables.
63

ENDNOTES 

1. “The International Traffic in Arms Regulations (ITAR),” 

Washington, DC: U.S. Department of State, Directorate of Defense 

Trade Controls, July 7, 2015, available from https://www.pmddtc.

state.gov/regulations_laws/itar.html.

2. “Export Control Provisions,” Washington, DC: Federation 

of American Scientists, October 12, 1998, available from www.fas.

org/nuke/control/export/provisions.htm.

3. Ibid.

4. Ronald J. Stay, “Cryptic Controversy: U.S. Government 

Restrictions on Cryptography Exports and the Plight of Philip 

Zimmermann,” Georgia State University Law Review, Vol. 13, No. 

2, February 1997, p. 586.

5. “22 U.S. Code § 2778—Control of arms exports and imports,” Cornell University Law School: Legal Information Institute, 

2013, available from www.law.cornell.edu/uscode/text/22/2778.

6. “Executive Order 11958—Administration of arms exports 

controls,” Washington, DC: U.S. National Archives and Records 

Administration, January 18, 1977, available from www.archives.

gov/federal-register/codification/executive-order/11958.html.

7. Peter Tompa, “The Arms Export Control Act and Congressional Codetermination over Arms Sales,” The American University International Law Review, Vol. 1, No. 1, p. 293.

8. Ibid., pp. 296, 298.

9. “Export Control Provisions.”

10. “Arms Export Control Act (P.L. 90-629),” Washington, 

DC: U.S. Congress, October 8, 2010, p. 433.

11. “22 USC § 2751—Need for international defense cooperation and military export controls: Presidential waiver; report to 

Congress: arms sales policy,” Cornell University Law School: Legal 

Information Institute, 2013, available from https://www.law.cornell.
64

edu/uscode/text/22/2751; see also Cristy Passman, “International 

Security Assistance and Arms Export Control Act of 1976,” Maryland Journal of International Law, Vol. 2, No. 2, May 4, 1976, p. 174, 

available from digitalcommons.law.umaryland.edu/cgi/viewcontent.

cgi?article=1029&context=mjil.

12. Morgan Dwyer, Gwen Gettliffe, Whitney Lohmeyer, Annie Marinan, Erik Stockham, Annalisa Weigel, and Kerri Cahoy, 

“The Global Impact of ITAR on the For-Profit and Non-Profit 

Space Communities,” Cambridge, MA: Massachusetts Institute of Technology, May 10, 2012, available from ssl.mit.edu/files/

website/class_reports/student_paper-The%20Global%20Impact%20

of%20ITAR%20on%20the%20For%20Profit%20and%20Non%20

Profit%20Space%20Communities.pdf. 

13. “Administration of Export Controls on Encryption 

Products,” Federal Register: The Daily Journal of the United States 

Government, November 19, 1996, available from https://www.

federalregister.gov/articles/1996/11/19/96-29692/administration-ofexport-controls-on-encryption-products.

14. Benjamin Stone and Hugo Posey, “U.S. Defense-Export 

Controls: Stuck in Cold War,” National Defense Magazine, September 2004, available from www.nationaldefensemagazine.org/archive/2004/September/Pages/US_Defense-Export3439.aspx.

15. Christopher Cox, Chairman, “Final Report of the United 

States House of Representatives Select Committee on U.S. National Security and Military/Commercial Concerns with the People’s 

Republic of China,” Chapter 6, May 1999, available from www.

house.gov/coxreport/body/ch6bod.html; see also Jonathan D. Pollack, “The Cox Report’s ‘Dirty Little Secret,’” Arms Control Today,

April-May 1999, available from www.armscontrol.org/act/1999_04-

05/jpam99.

16. U.S. Congress, “The Strom Thurmond National Defense 

Authorization Act For Fiscal Year 1999,” 105th Cong., 2nd sess., 

October 17, 1998, Washington, DC: U.S. Government Printing 

Office, 1999, pp. 1-359.

17. “Earthbound,” The Economist, August 21, 2008, available 

from www.economist.com/node/11965352/print.
65

18. “Subchapter M—International Traffic in Arms Regulations,” Washington, DC: U.S. Department of State, 2013, available from https://www.pmddtc.state.gov/regulations_laws/documents/

official_itar/2013/ITAR_Part_120.pdf.

19. Ibid.

20. “Notification of Changes in Registration Information,” 

Washington, DC: U.S. Department of State, Directorate of Defense 

Trade Controls, November 6, 2012, available from www.pmddtc.

state.gov/registration/notification_chreg.html; see also 22 .F.R. §120.4, 

Cornell University Law School: Legal Information Institute, 2013, 

available from https://www.law.cornell.edu/cfr/text/22/120.4.

21. “Registration,” Washington, DC: U.S. Department of State, 

Directorate of Defense Trade Controls, October 24, 2013, available 

from www.pmddtc.state.gov/registration/.

22. John A. Ordway, “U.S. International Traffic in Arms 

Regulations (‘ITAR’),” Washington, DC: Berliner, Corcoran & 

Rowe, L.L.P., p. 7, available from www.cistec.or.jp/english/service/

report/0802ITARarticleforCISTEC.pdf. 

23. 22 CFR § 120.6. Items currently on USML belong to one 

of the following categories: Firearms, close assault weapons and 

combat shotguns, guns and armament, ammunition/ordinance, 

launch vehicles, guided missiles, ballistic missiles, rockets, torpedoes, bombs and mines, explosives and energetic materials, 

propellants, incendiary agents and their constituents, vessels of 

war and special naval equipment, aircraft and associated equipment, military training equipment and training, protective personnel equipment and shelters, military electronics, fire control, 

range finder, optical and guidance and control equipment, auxiliary military equipment, toxicological agents, including chemical agents, biological agents and related equipment, nuclear 

weapons and design and testing related items, directed energy 

weapons, submersible vessels, oceanographic and associated 

equipment “Subchapter M—International Traffic in Arms Regulations, Part 121-The United States Munitions List,” Washington, 

DC: U.S. Department of State, available from www.ecfr.gov/cgi-bin/

text-idx?SID=86008bdffd1fb2e79cc5df41a180750a&node=22:1.0.1.13.

58&rgn=div5. 
66

24. 22 CFR § 121.1.

25. 22 CFR Part 120.10, available from https://www.pmddtc.

state.gov/regulations_laws/itar.html.

26. Formally, ITAR defines “exports” to include:

Sending or taking a defense article out of the United States in 

any manner, except by mere travel outside of the United States by 

a person whose personal knowledge includes technical data; or

Transferring registration, control or ownership to a foreign 

person of any aircraft, vessel, or satellite covered by the US Munitions List, whether in the United States or abroad; or

Disclosing (including oral or visual disclosure) or transferring 

in the United States any defense article to an embassy, any agency 

or subdivision of a foreign government (e.g. diplomatic missions); 

or,

Disclosing (including oral or visual disclosure) or transferring 

technical data to a foreign person, whether in the United States or 

abroad; 

Performing a defense service on behalf of, or for the benefit 

for, a foreign person, whether in the United States or abroad. A 

launch vehicle or payload shall not, by reason of the launching 

of such a vehicle, be considered an export for purposes of this 

subchapter. However for certain limited purposes, the controls of 

this subchapter may apply to any sale, transfer or proposal to sell 

or transfer defense articles or defense services. 

22 CFR § 120.17.

27. ExportSolutionsInc, “The Best Webinar You’ll Ever Attend About Export Control,” September 11, 2015, available from 

www.youtube.com/watch?v=XYuZtdeJOBo. 

28. ITAR, p. 463, available from www.gpo.gov/fdsys/pkg/CFR2005-title22-vol1/pdf/CFR-2005-title22-vol1-part123.pdf; see also 22§ 

CFR 120.9. 

29. “Notification of Changes in Registration Information,” 

Washington, DC: Department of State, Directorate of Defense 

Trade Controls, May 28, 2013, available from www.pmddtc.state.

gov/registration/notification_chreg.html.
67

30. “Renewing Your Registration,” Washington, DC: Department of State, Directorate of Defense Trade Controls, January 29, 

2015, available from www.pmddtc.state.gov/registration/renewing_

yr.html.

31. Section 120.16 defines as any natural person who is not 

a lawful permanent resident . . . or who is not a protected

individual . . . [or] any foreign corporation, business association, 

partnership, trust, society or any other entity or group that is not 

incorporated or organized to do business in the United States, as 

well as international organizations, foreign government, and any 

agency or subdivision of foreign governments (e.g., diplomatic 

missions). 

22 CFR § 120.16.

32. Ordway.

33. David M. Dunbar, “Key Concepts and Definitions,” College Park, MD: University of Maryland, p. 2, available from www.

docsrush.net/2521710/key-concepts-and-definitions-under-the-international-traffic.html.

34. Ordway, p. 1.

35. 22 CFR § 120.15. Protected individuals include certain 

refugees and those who have been granted political asylum, See 

USC 8 1324b(a)(3).

36. Tamer A. Soliman, Mac B. Fadlallah and Alan M. Hayes, 

“Inside New ITAR Rules For US Defense Service Providers,” Law 

360, June 29, 2015, www.law360.com/articles/673558/inside-new-itarrules-for-us-defense-service-providers.

37. 22 CFR Part 120.2.

38. 22 CFR Part 120.4(2).

39. 22 CFR Part 120.3

40. ITAR, p. 423, available from www.gpo.gov/fdsys/pkg/

CFR-2005-title22-vol1/pdf/CFR-2005-title22-vol1-part120.pdf; see 

also CFR 22 120.3.
68

41. “Export Control Provisions.”

42. “Dual Use Export Licenses,” Washington, DC: International Trade Administration, October 4, 2012, available from 

export.gov/regulation/eg_main_018229.asp.

43. Ibid. 

44. 22 CFR Part 120.4.

45. “The form of the item is its defined configuration, including the geometrically measured configuration, density, and weight 

or other visual parameters which uniquely characterize the item, 

component or assembly.” See ITAR, p. 464, available from www.

gpo.gov/fdsys/pkg/CFR-2005-title22-vol1/pdf/CFR-2005-title22-vol1-

part123.pdf.

46. 22 CFR Part 120.4.

47. 22 CFR 123.9(b).

48. 22 CFR 129.3(c). 

49. 22 CFR § 122.1-122.5.

50. 22 CFR § 122.1.

51. Ibid.

52. 22 CFR § 122.3.

53. 22 CFR § 122.5.

54. 22 CFR § 123.16.

55. 22 CFR § 121.1, Category XIII(b)(1).

56. 22 CFR § 123.

57. 22 CFR § 124.

58. 22 CFR § 124.11.
69

59. Ibid.

60. 22 CFR § 125.1.

61. Ibid.

62. 22 CFR § 125.3.

63. 22 CFR § 125.4.

64. 22 CFR § 126.1.

65. Ibid.

66. 22 CFR § 126.3.

67. Frank Ruggiero, “Defense Trade Issues,” Defense News, 

April 21, 2008, available from 2001-2009.state.gov/t/pm/rls/

rm/104012.htm.

68. 22 CFR § 126.14.

69. “USA Moves to Improve Arms Export Regulation Process,” Defense Industry Daily, July 20, 2011, available from www.

defenseindustrydaily.com/usa-moves-to-reform-arms-exportregulation-process-04665/.

70. Taylor Dinerman, “America’s Economic War Against Itself: US Export Controls,” New York: GateStone Institute, January 

2, 2012, available from www.gatestoneinstitute.org/2717/us-exportcontrols.

71. These documents officially include an application for 

permanent export or a temporary import license and supporting 

documents, Shipper’s Export Declaration, Invoice, Declaration of 

destination, Delivery verification, Application for temporary export, Application for registration, Purchase order, Foreign import 

certificate, Bill-of-lading, Airway bill, Nontransfer and use certificate, and any other document used in the regulation or control 

of a defense article, defense service or technical data for which a 

license or approval is required . . .

22 CFR § 127.2.
70

72. 22 CFR Part 127. 

73. Ibid.

74. Ordway, pp. 4-5.

75. Ibid.

76. ExportSolutionsInc, “The Best Webinar You’ll Ever Attend 

About Export Control,” September 11, 2015, https://www.youtube.

com/watch?v=XYuZtdeJOBo.

77. 22 CFR §128.1.

78. 22 CFR § 128.1-128.17.

79. 22 CFR § 129.1.

80. 22 CFR § 129.3.

81. 22 CFR § 130.9.

82. 22 CFR § 130.1-130.17. 

83. Jonathan Caverley and Ethan B. Kapstein, “Arms Away: 

How Washington Squandered Its Monopoly on Weapons Sales,” 

Foreign Affairs, October 2012, available from www.foreignaffairs.

com/articles/138035/jonathan-caverley-and-ethan-b-kapstein/armsaway.

84. “High Risk Series: An Update,” Washington, DC: U.S. 

Government Accountability Office (GAO), January 2007, p. 2, 

available from www.gao.gov/assets/260/255951.pdf; see also “Failure to Protect Sensitive Technology,” Washington, DC: Center for 

Public Integrity, December 10, 2008, available from www.publicintegrity.org/2008/12/10/6256/failure-protect-sensitive-technology.

85. Export Controls: State and Commerce Have Not Taken Basic 

Steps to Better Ensure U.S. Interests Are Protected,” Statement of 

Ann Calvaresi Barr, Director Acquisition and Sourcing Management, Testimony Before the Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of 
71

Columbia, Committee on Homeland Security and Governmental 

Affairs, U.S. Senate, Washington, DC: GAO, April 24, 2008, p. 2, 

available from www.gao.gov/new.items/d08710t.pdf. 

86. Mitchell B. Wallerstein, “Losing Controls: How U.S. Export Restrictions Jeopardize National Security and Harm Competitiveness,” Foreign Affairs, Vol. 88, No. 6, November-December 

2009, p. 14.

87. “Briefing of the Working Group on the Health of the U.S. 

Space Industrial Base and the Impact of Export Controls,” Washington, DC: Center for Strategic and International Studies, February 2008, available from csis.org/files/media/csis/pubs/021908_csis_

spaceindustryitar_final.pdf. 

88. “From Reform to Revenue: The Impact of Amending 

ITAR on New Space Markets,” New Space Global Analysis, March 

29, 2013, available from bigthink.com/above-the-clouds/from-reformto-revenue-the-impact-of-amending-itar-on-newspace-markets.

89. Dwyer et al.; see also Tobin L. Smith, Josh Trapani, Anthony Decrappeo, David Kennedy, “Reforming Regulation of 

Research Universities,” Issues in Science and Technology, Summer 

2011, pp. 57-64.

90. David A. Broniatowski et al., “Balancing the Needs 

for Space Research and National Security in ITAR,” Reston, 

VA: American Institute of Aeronautics and Astronautics, p. 8, 

available from www.academia.edu/1416900/Balancing_the_Needs_

for_Space_Research_and_National_Security_in_the_ITAR.

91. Ibid., p. 6.

92. Dwyer et al.

93. Ibid.

94. “Export Controls: Improvements Needed to Prevent Unauthorized Technology Releases to Foreign Nationals in the United States,” GAO-10-557, Washington, DC: GAO, February 2, 2011, 

p. 7, available from www.gao.gov/products/GAO-11-354.
72

95. John McHale, “Export compliance reforms on the way 

for aircraft and satellite suppliers,” Military Embedded Systems, 

available from mil-embedded.com/articles/export-reforms-the-foraircraft-satellite-suppliers/.

96. Jim Wolf, “Exclusive: U.S. squeezes French-led satellite 

maker over China,” Reuters, February 9, 2012, available from 

www.reuters.com/article/2012/02/09/us-usa-france-china-satelliteidUSTRE8181F020120209.

97. Steve Brotherton, “Beyond Reach? How to Develop ITARfree systems?” WorldECR, March 2011, pp. 3-4, available from 

www.worldecr.com/archives/beyond-reach-how-to-develop-itar-freesystems-2/. 

98. Pranab Dhal Samanta, “Your firms are out of fighter contract fray, India to US,” Indian Express, April 28, 2011, available 

from www.indianexpress.com/news/your-firms-are-out-of-fighter-contract-fray-india-to-us/782696/.

99. Sandra I. Irwin, “U.S. Industry Loses Big in India: Is 

ITAR to Blame?” National Defense Magazine, April 28, 2011, available from www.nationaldefensemagazine.org/blog/lists/posts/post.

aspx?ID=402.

100. “Brazil’s F-X2 Fighter Competition,” Defense Industry 

Daily, June 19, 2013, available from www.defenseindustrydaily.com/

brazil-embarking-upon-f-x2-fighter-program-04179/.

101. Harrison G. Wolf, “ITAR Reforms for Dual-Use Technologies: A Case Analysis and Policy Outline,” Los Angeles: CA, 

Viterbi School of Engineering, 2012, available from viterbi.usc.edu/

aviation/assets/002/79883.pdf.

102. Michèle Flournoy, “Want to Export an F-16 Fighter Jet?” 

The Wall Street Journal, March 11, 2013, available from online.wsj.

com/article/SB10001424127887324128504578346332458725010.html.

103. Mitchell B. Wallerstein, “Losing Controls: How U.S. Export Restrictions Jeopardize National Security and Harm Competitiveness,” Foreign Affairs, Vol. 86, No. 6, November-December 

2009, p. 13.
104. Peter Ito, David M. Moore, Stuart Young, Kevin Burgess, 

and Peter Antill, “Impact of U.S. Export Control and Technology 

Transfer Regime on the Joint Strike Fighter (JSF) Project-Views of 

Key UK Stakeholders,” International Journal of Defense Acquisition 

Management, Vol. 4, 2011, pp. 1-52, available from www.acquisitionjournal.org/articles/NPS2011-01.pdf.

105. Rachel Lehmer Claus, “Space-Based Fundamental Research and ITAR: A Study in Vagueness, Overbreadth, and Prior 

Restraint,” Santa Clara Journal Of International Law, Vol. 2, No. 1, 

2004, p. 4.

106. Zach Rosenberg, “Space industry unites in criticism 

of ITAR restrictions,” Flight Global, November 24, 2011, available from www.flightglobal.com/news/articles/in-focus-space-industry-unites-in-criticism-of-itar-restrictions-364544; and Ryan J. Zelnio, 

“Determining the Effects of ITAR Regulation on the Commercial 

Space Manufacturing Sector,” Fairfax, VA: George Mason University, p. 17, available from scholar.googleusercontent.com/scholar?q=

cache:V0f2Esmwj9IJ:scholar.google.com/+%22ITAR%22&hl=en&as_

sdt=0,47.

107. “Defense Industrial Base Assessment: U.S. Space Industry—Final Report,” Dayton, OH: U.S. Air Force, August 31, 2007, 

available from https://www.bis.doc.gov/index.php/forms-documents/

doc_view/38-defense-industrial-base-assessment-of-the-u-s-spaceindustry-2007. 

108. “Competing for Space: Satellite Export Policy and U.S. 

National Security,” Arlington, VA: Aerospace Industries Association, January 2012, p. iii, available from www.aia-aerospace.org/

assets/CompetingForSpaceReport.pdf. 

109. Marty Hauser and Micah Walter-Range, “ITAR and the 

U.S. Space Industry,” Washington, DC: Space Foundation, 2008, 

p. 1, available from www.spacefoundation.org/sites/default/files/

downloads/SpaceFoundation_ITAR_0.pdf.

110. Peter B. de Selding, “U.S. Satellite Export Regs Remain a 

Frustration for European Industry,” Space News, February 7, 2014, 

available from spacenews.com/39414us-satellite-export-regs-remaina-frustration-for-european-industry.

73
111. Sandra I. Erwin, “Export Rules Under Fire for Eroding 

U.S. Space Industry,” National Defense Magazine, June, 2009, 

available from www.nationaldefensemagazine.org/archive/2009/June/

Pages/ExportRulesUnderFireforErodingUSSpaceIndustry.aspx. 

112. Steven Overly, “For the U.S. Satellite Industry, Strict Export Controls Cost Market Share,” The Washington Post, March 27, 

2011, available from articles.washingtonpost.com/2011-03-27/business/35260683_1_export-controls-satellite-industry-iridium.

113. Richard Kusiolek, “ITAR: Balancing the Global Playing Field?” Satellite Today, August 1, 2008, available from www.

satellitetoday.com/via/features/ITAR-Balancing-the-Global-PlayingField_23882.html.

114. Sandra I. Erwin, “Export Rules Under Fire for Eroding U.S. Space Industry,” National Defense Magazine, June, 2009, 

available from nationaldefensemagazine.org/archive/2009/June/Pages/

ExportRulesUnderFireforErodingUSSpaceIndustry.aspx. 

115. John Hillery, “U.S. Satellite Export Control Policy,” 

Washington, DC: Center for Strategic and International Studies, 

September 20, 2006, p. 1, available from csis.org/files/media/csis/

pubs/060921_sat_export_controls.pdf.

116. Ibid.

117. “Health of the U.S. Space Industrial Base.”

118. Marty Bollinger and Joshua M. Boehm, “Moving Toward 

a Faster and More Predictable Process of Licensing Defense Articles and Services for Export: Recommendations for Government 

and Industry,” Frederick, MD: Booz Allen Hamilton, May 2006, 

available from www.boozallen.com/media/file/Export_Controls_Survey.pdf. See also “U.S. Space Industry “Deep Dive” Assessment: 

Impact of U.S. Export Controls on the Space Industrial Base,” 

Washington, DC: U.S. Department of Commerce, February 2014, 

available from www.bis.doc.gov/index.php/forms-documents/doc_

view/898-space-export-control-report.

119. Robert M. Gates, “Business Executives for National Security” Speech, Washington, DC: U.S. Department of Defense, 

April 20, 2010, available from archive.defense.gov/Speeches/Speech.

aspx?SpeechID=1453. 

74
75

120. Department of Justice, “Fact Sheet: Major U.S. Export 

Enforcement Actions in the Past Year,” Washington, DC: Department of Justice, October 11, 2007, available from www.justice.gov/

opa/pr/2007/October/07_nsd_807.html. See also U.S. Attorney’s Office, District of New Mexico, “Chinese National Pleads Guilty to 

Arms Export Control Act Violations,” Albuquerque, NM: Foreign 

Bureau of Investigation, July 23, 2014, available from www.fbi.

gov/albuquerque/press-releases/2014/chinese-national-pleads-guilty-toarms-export-control-act-violations.

121. Wolf.

122. Ibid.

123. The preceding George Bush administration also made a 

modest effort at export reform. For example, a Presidential Directive issued in January 2008 called for reducing the export licensing time to no more than 60 days and for streamlining the process 

of how technology is assessed in regards to the USMCL.

124. Evelyn N. Farkas, “U.S. Export Controls: Emerging Consensus on Increasing Risk,” Washington, DC: American Security 

Project, April 2010, p. 1, available from americansecurityproject.

org/wp-content/uploads/2010/09/US-Export-Controls-Consensus-andRisk-FINAL.pdf.

125. Caroline Atkinson, “The Path Forward on Export Control Reform,” Washington, DC: Center for Strategic and International Studies, February 4, 2014, available from csis.org/event/pathforward-export-control-reform.

126. Ian F. Fergusson and Paul K. Kerr, “The U.S. Export Control System and the President’s Reform Initiative,” Washington, 

DC: Congressional Research Service, April 19, 2013, p. 14, available from www.fas.org/sgp/crs/natsec/R41916.pdf.

127. U.S. Department of State, “Amendment to the International Traffic in Arms Regulations: Initial Implementation of 

Export Control Reform,” Federal Register, Vol. 78, No. 73, April 16, 

2013, p. 22740. 

128. Daniel Shortt, “State Department Exports Items From 

ITAR to EAR,” May 15, 2013, available from www.wecomply.com/
76

blog/post/1639480-State-Department-Exports-Items-From-ITAR-toEAR.

129. “Export Control Reform News,” U.S. Export Control 

Reform, July 30, 2013, available from export.gov/ecr/eg_main_

043652.asp.

130 . “President’s Export Control Reform Initiative,” ECR 

Blog, July 28, 2015, available from www.export.gov/ecr/.

131. Atkinson. 

132. Ibid.

133. “Export Control Reform,” Washington, DC: Department 

of State, Directorate of Defense Trade Controls, July 31, 2014, 

available from www.pmddtc.state.gov/ECR/index.html. 

134. “President’s Export Control Reform Initiative.”

135. The National Defense Authorization Act For Fiscal Year 

2010, Pub. Law, No. 111-84, 123 Stat. 2190, 2010, available from 

www.gpo.gov/fdsys/pkg/PLAW-111publ84/html/PLAW-111publ84.

htm.

136. Christopher R. Wall, Stephan E. Becker, and Benjamin J. 

Cote, “Obama Administration Moves Forward With Export Control Reform,” Washington, DC: Pillsbury Law, March 15, 2013, 

available from www.pillsburylaw.com/publications/obama-administration-moves-forward-with-export-control-reform.

137. “Amendment to the International Traffic in Arms 

Regulations: Revision of U.S. Munitions List Category XV and 

Definition of ‘Defense Service’,” Washington, DC: U.S. Federal 

Register, 2013, available from https://www.federalregister.gov/articles/2013/05/24/2013-11985/amendment-to-the-international-trafficin-arms-regulations-revision-of-us-munitions-list-category-xv#h-8.

138. Jeffrey P. Nosanov, “Viewpoint: International Traffic in 

Arms Regulations—Controversy and Reform,” Astropolitics: The 

International Journal of Space Politics & Policy, November 3, 2009, 

available from www.tandfonline.com/loi/fast20.
77

139. “President Obama Issues Presidential Determination 

to Facilitate Satellite Reclassification,” Global Trade Expertise, 

November 8, 2013, available from www.globaltradeexpertise.com/

news/2013/11/8/president-obama-issues-presidential-determination-tofacilitate-satellite-reclassification.

140. Hauser and Walter-Range, p. 2.

141. Ibid.

142. Ibid.

143. Sheppard Mullin, “ECR Series—Episode II: The First 

Change—Reevaluating your ITAR Aircraft Parts,” July 11, 2013, 

available from www.globaltradelawblog.com/2013/07/11/what-export-control-reform-means-for-you-let-us-cl-ear-up-changes-to-theitar-episode-ii-the-first-change-reevaluating-your-itar-aircraft-parts/.

144. Veronica Magan, “President Obama Signs Law, Makes 

Communications Satellites Legal for Export,” Satellite Today, January 7, 2013, available from www.satellitetoday.com/st/curated/40373.

html. 

145. John R. Shane, Lori Scheetz, and Laura El-Sabaawi, “U.S. 

State and Commerce Departments reform export controls applicable to satellites and spacecraft systems,” Winchester Walk, London, UK: Globe Business Publishing Ltd, May 16, 2014, available 

from www.lexology.com/library/detail.aspx?g=f1958030-537d-40ddaeef-1f363dcd1797.

146. Rick Phipps, “Reforms on Satellites Arrive,” Commonwealth Trading Partners, May 14, 2014, available from www.ctp-inc.

com/reforms-satellites-arrive/.

147. Shane, Scheetz, and El-Sabaawi.

148. Ibid.

149. Ibid.

150. Goldstein PLLC, “Amid Many Stumbles, One Giant 

Leap for ECR,” Defense Trade Law Blog, May 21, 2014, available 
78

from defensetradelaw.com/2014/05/21/amid-many-stumbles-onegiant-leap-for-ecr/.

151. Nina Shenai, “Export Control Reform 2010: Transforming the Legal Architecture of Dual-Use and Defense Trade Controls,” Washington, DC: American Enterprise Institute, February 2, 2010, pp. 8-9, available from www.aei.org/files/2010/02/02/

Export%20Control%20Reform%20Paper.pdf.

152. “Revisions to the Export Administration Regulations: 

Initial Implementation of Export Control Reform,” Federal Register, Vol. 78, April 16, 2013, pp. 22660 and 22740.

153. Ibid., p. 22744.

154. U.S. Department of State, “Amendment to the International Traffic in Arms Regulations: Initial Implementation of Export Control Reform,” Federal Register, Vol. 78, No. 73, April 2013, 

p. 22745.

155. The new rules do confirm, however, that existing commodity jurisdiction judgments will not be reversed by the new 

rules. U.S. Department of State, “Amendment to the International 

Traffic in Arms Regulations: Initial Implementation of Export 

Control Reform,” Federal Register, Vol. 78, No. 73, p. 22745.

156. Micah Zenko, “The Great Drone Contradiction,” Foreign Policy, February 19, 2015, available from foreignpolicy.

com/2015/02/19/the-great-drone-contradiction-unmanned-aircraftsystems/.

157. Bill Carey, “U.S. Export Policy Allows Wider Unmanned 

Aircraft Sales,” AINonline, February 17, 2015, available from 

www.ainonline.com/aviation-news/defense/2015-02-17/us-exportpolicy-allows-wider-unmanned-aircraft-sales.

158. Office of the Spokesperson, “U.S. Export Policy for Military Unmanned Aerial Systems,” Washington, DC: U.S. Department of State, February 17, 2015, available from www.state.gov/r/

pa/prs/ps/2015/02/237541.htm.
79

159. Andrew Hunter and Andrew Metrick, “Not So FastU.S. Drone Export Policy Isn’t as ‘New and Improved’ as Advertised,” FYSA: For Your Situational Awareness, Issue 17, CSIS, March 

2015, csis.org/files/publication/150401_ISP_FYSA_Issue_17_MAR_

2015.pdf.

160. Carey.

161. John M. Hynes, “New ITAR Rule on Transfer of Defense 

Articles to Dual and Third-Country Nationals Creates Substantial 

New Compliance Obligations,” The National Law Review, June 23, 

2011, available from www.natlawreview.com/article/new-itar-ruletransfer-defense-articles-to-dual-and-third-country-nationals-createssubstant. 

162. U.S. Department of State, “International Traffic in Arms 

Regulations: Dual Nationals and Third-Country Nationals Employed by End-Users,” Federal Register, Vol. 76, No. 94, p. 28177.

163. Ibid.

164. Hynes.

165. Ibid.

166. Thomas B. McVey, “Proposed ITAR Amendment Provides Important Benefit for Government Contractors,” Williams 

Mullen, July 9, 2015, www.williamsmullen.com/news/proposeditar-amendment-provides-important-benefit-government-contractors. 

A copy of the proposed regulation can be found at: www.pmddtc.

state.gov/FR/2015/2015-12295_05_22_2015.pdf.

167. Thomas B. McVey, “Proposed Amendments Provide Data Security Standard Under ITAR and EAR,” Williams 

Mullen, September 15, 2015, www.williamsmullen.com/news/proposed-amendments-provide-data-security-standard-under-itar-andear#_ftn3. 

168. Ibid.

169. Dwyer et al. 
80

170. Ibid.

171. Doug Messier, “Obama’s ITAR Reform Includes Creation 

of Single Agency to Oversee Export Control,” Parabolic Arc, July 5, 

2010, available from www.parabolicarc.com/2010/07/05/obamas-itarreform-includes-creation-single-agency-oversee-export-control/.

172. “Export Controls: Observations on Selected Countries’ 

Systems and Proposed Treaties,” GAO-10-557, Washington, DC: 

GAO, May 27, 2010.

173. U.S. Department of State, “Export Control Reform Initiative Fact Sheet #3: Rebuilding the Control Lists,” January 2, 2013, 

p. 1, available from export.gov/static/ECR%20Factsheet%203%20

-%20Rebuilding%20the%20Control%20Lists%20v%202_Latest_eg_

main_047474.pdf.

174. Dwyer et al. 

175. Fergusson and Kerr, p. 11.

176. “President’s Export Control Reform Initiative.” 

177. 15 CFR § 740.12; Federal Register Notice 76, Federal Register, p. 35276, available from www.gpo.gov/fdsys/pkg/FR-2011-06-16/

pdf/2011-14705.pdf.

178. Export Control Reform Initiative Factsheet #4: License 

Exception “Strategic Trade Authorization” (STA), January 25, 

2012, available from https://new.export.gov/cms_files/ECR%20Factsheet%204%20-%20STA_Latest_eg_main_047475.pdf.

179. George Tuttle III, “Commerce Announces Its New strategic Trade Authorization (STA) License Exception,” George R. 

Tuttle Law Offices, July 28, 2011, available from www.tuttlelaw.

com/newsletters/sta_license_exception7-26-2011.html.

180. The 36 countries included in the § 740.20(c)(1) group 

one (STA1) are Argentina, Australia, Austria, Belgium, Bulgaria, 

Canada, Croatia, the Czech Republic, Denmark, Estonia, Finland, 

France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, 

Latvia, Lithuania, Luxembourg, the Netherlands, New Zealand, 
81

Norway, Poland, Portugal, Romania, Slovakia, Slovenia, South 

Korea, Spain, Sweden, Switzerland, Turkey, and UK.

181. The eight countries included in § 740.20(c)(2) group two 

(STA2) are Albania, Hong Kong, India, Israel, Malta, Singapore, 

South Africa, and Taiwan.

182. Tuttle.

183. Export Control Reform Initiative Factsheet #4.

184. Fergusson and Kerr.

185. “Fact Sheet: Announcing the Revised U.S. Export Control 

System,” Washington, DC: The White House Office of the Press 

Secretary, October 15, 2013, available from www.whitehouse.gov/

the-press-office/2013/10/16/fact-sheet-announcing-revised-us-exportcontrol-system. 

186. Fergusson and Kerr, pp. 20-21.

187. “IT Systems for Export Control,” Washington, DC: U.S. 

Department of Commerce, Bureau of Industry and Security, July 

17, 2012, available from mtitv.com/Conference2012/PDF/it_systems_

update_2012.pdf.

188. Paul McLeary, “Reforms Push New Day for US Foreign 

Military Sales,” Defense News, October 1, 2014, available from 

www.defensenews.com/article/20141001/DEFREG02/310010036/.

189. “Vision 2020,” Washington, DC: Defense Security Cooperation Agency, October 2014, pp. 4-8, available from www.

dsca.mil/sites/default/files/StratPlanImages/2014%20Strategic%20

Plan%20-%20Vision%202020.pdf.

190. Paul McLeary, “Reforms Push New Day for US Foreign 

Military Sales,” Defense News, October 1, 2014, available from 

www.defensenews.com/article/20141001/DEFREG02/310010036/.

191. Mary-Louise Hoffman, “Kidd Manville: DSCA Eyes 

Streamlined Foreign Defense Sales,” Executive Gov., October 2, 

2014, available from www.executivegov.com/2014/10/kidd-manvilledsca-eyes-streamlined-foreign-defense-sales/.
82

192. “Editorial: Time to Reform Export Rules,” Defense 

News, October 6, 2014, available from www.defensenews.com/

article/20141006/DEFFEAT05/310060014/Editorial-Time-ReformExport-Rules.

193. Paul McLeary, “DoD Kicks Off Fiscal Year With Streamlined Export Rules,” Defense News, October 5, 2014, available from 

www.defensenews.com/article/20141005/DEFREG02/310050005/

DoD-Kicks-Off-Fiscal-Year-Streamlined-Export-Rules.

194. “Our Mission,” Washington, DC: Export–Import Bank of 

the United States, available from www.exim.gov/about/.

195. Shayerah Ilias Akhtar, “Export-Import Bank: Overview 

and Reauthorization Issues,” Washington, DC: Congressional Research Service, June 30, 2014, pp. i-10, available from www.fas.org/

sgp/crs/misc/R43581.pdf.

196. Justin Raimondo, “Why the War Party Loves the Export-Import Bank,” AntiWar.com, June 30, 2014, available from 

original.antiwar.com/justin/2014/06/29/why-the-war-party-loves-theexport-import-bank/.

197. Thomas Donnelly, “Don’t kill the Ex-Im Bank,” Washington, DC: American Enterprise Institute, July 1, 2014, available 

from www.aei.org/article/foreign-and-defense-policy/defense/dont-killthe-ex-im-bank/.

198. Raimondo.

199. Donnelly. 

200. Vicki Needham and Kevin Cirilli, “GOP calls to mend, 

not end, Ex-Im,” The Hill, June 25, 2014, available from thehill.com/

policy/finance/210640-gop-calls-to-mend-not-end-ex-im.

201. Alan Greenblatt, “Congress’ Latest Death Match Involves A Bank You’ve Never Heard Of,” National Public Radio, 

July 13, 2014, available from www.npr.org/2014/07/10/330434582/

congress-latest-death-match-involves-a-bank-youve-never-heardof?ft=1&f=1001. 
83

202. Ian Katz, Kevin Hamlin, and Brian Parkin, “Rivals Already Outgun U.S. on Trade Subsidies as Ex-Im Imperiled,” 

Bloomberg, June 30, 2014, available from www.promote-trade.org/

blog/072014/rivals-already-outgun-us-trade-subsidies-ex-im-imperiled.

203. Greenblatt.

204. Timothy P. Carney, “The Export-Import Bank’s corporate welfare: War by other means,” The Washington Examiner, June 

27, 2014, available from washingtonexaminer.com/the-export-importbanks-corporate-welfare-war-by-other-means/article/2550256.

205. Veronique de Rugy, “The Unseen Costs of the ExportImport Bank,” U.S. News and World Report, July 7, 2014, available 

from www.usnews.com/opinion/economic-intelligence/2014/07/07/

export-import-bank-hurts-businesses-and-taxpayers.

206. Vicki Needham, “Report: Failure to fund Ex-Im Bank 

puts US manufacturers at global disadvantage,” The Hill, July 29, 

2014, available from thehill.com/policy/finance/213637-report-failureto-fund-ex-im-bank-puts-us-manufacturers-as-global-disadvantage.

207. Veronique de Rugy, “The Crony Capitalism Machine: The 

Export-Import Bank is inefficient and immoral,” Reason, AugustSeptember 2014, available from reason.com/archives/2014/07/19/thecrony-capitalism-machine%20.

208. “Export-Import Bank Keeps America Competitive in Foreign Markets,” Washington, DC: Nuclear Energy Institute, available from www.nei.org/Issues-Policy/Exports-Trade/Ex-Im-Bank-Reauthorization.

209. Raimondo.

210. Donnelly.

211. Salim Furth, “The Export-Import Bank: What the Scholarship Says,” Washington, DC: The Heritage Foundation, August 

7, 2014, available from www.heritage.org/research/reports/2014/08/

the-export-import-bank-what-the-scholarship-says.
84

212. William D. Hartung, “Risk and Returns: The Economic 

Illogic of the Obama Administration’s Arms Export Reforms,” 

Washington, DC: Center for International Policy, August, 21, 

2013, available from www.ciponline.org/research/entry/risk-and-returns-the-economic-illogic-of-the-obama-administrations-arms-exp.

213. “President’s Export Control Reform Initiative.” 

214. Sandra I. Irwin, “Export Reforms Can’t Come Soon 

Enough for Defense Industry,” National Defense Magazine, May 

2, 2013, available from www.nationaldefensemagazine.org/blog/Lists/

Posts/Post.aspx?ID=1133.

215. “Export control norms on satellites, components relaxed by US,” The Economic Times, May 14, 2014, available from 

articles.economictimes.indiatimes.com/2014-05-14/news/49846681_1_

satellites-components-aia.

216. “License Processing Times,” Washington, DC: U.S. Department of State, Directorate of Defense Trade Controls, September 2, 2015, available from www.pmddtc.state.gov/metrics/

index.html. 

217. U.S. Department of Commerce, “Revisions to the Export 

Administration Regulations: Initial Implementation of Export 

Control Reform,” Federal Register, Vol. 78, No. 73, p. 22660.

218. John J. Burke, “U.S. Export Control Reform to Move 

Wide Array of Aircraft Parts off the Munitions List but Still 

Prohibit Many of them from Being Exported to China,” Lexology, June 4, 2013, available from www.lexology.com/library/detail.

aspx?g=994253e1-c983-4834-92be-7f39e48d7941.

219. Shane, Scheetz, and El-Sabaawi.

220. “Export Enforcement Coordination Center,” Export.

gov, January 17, 2014, available from export.gov/%5C%5C/e2c2/

index.asp.

221. U.S. Export Control Reform, “Export Enforcement Coordination Center,” November 14, 2012, available from export.gov/

e2c2/index.asp.
85

222. “President’s Export Control Reform Initiative.”

223. Colin Clark, “Hill Balks at Arms Export Agency,” DoD 

Buzz, June 30, 2010, available from www.dodbuzz.com/2010/06/30/

hill-balks-at-arms-export-agency/#ixzz0spjQj0lB.

U.S. ARMY WAR COLLEGE

Major General William E. Rapp

Commandant

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STRATEGIC STUDIES INSTITUTE

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U.S. ARMY WAR COLLEGE PRESS

Director

Professor Douglas C. Lovelace, Jr.

Director of Research

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Author

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