Export Control Reform Regulations Published

Export Control Reform Regulations Published

In August 2009, President Obama directed a comprehensive review of our current export control system to ensure that the U.S employs a system which reflects the changing economic and technological landscape.  Since that time, an interagency team has worked tirelessly on the largest Export Control Reform (ECR) initiative since 1977.  Throughout this process, SEMI has played an active role in ensuring the reform effort provides the intended benefits to those equipment and materials companies which export goods with both commercial and military uses (known as “dual-use” goods).

The President has a stated goal of Export Control Reform completion by year’s end and administration officials took a significant step in that direction last month.  On April 16, the U.S. Departments of State and Commerce published a Federal Register notice detailing amendments to the regulations governing both military and dual-use goods.  Of particular importance is a revision of the definition of “specially designed,” a term that determines the export licensing treatment of most parts and components.  In concert with our members, SEMI twice submitted comments to the Commerce Department in 2012, outlining our support for a transparent and unambiguous description of the term.  

The April 16 notice provides a revision of the “specially designed” definition by way of a “catch and release” approach.  The amendment starts out by catching many things but eventually releases most of them based on a complex series of criteria and exceptions that will determine whether a part or component qualifies as “specially designed.”   With the primary goal of the reform effort to streamline the process and reduce the burden on U.S. companies, it is true that this revision fails to define the term “specially designed” in and of itself.  That said, with the universal overhaul of such an archaic system and the consolidation of two very different sets of control lists, the April 16 amendments show many encouraging signs of modernization and improvement. 

It is important for companies exporting dual-use products to actively engage with the government on this revised definition, so as to ensure they remain compliant with U.S. law.  While the recently published regulations are in final form, they are currently under congressional review and will not come into effective until October 15, 2013.  If your company stands to be affected by these changes or if you would like more information about SEMI’s export control work, please contact Taylor Sholler, manager, North America Public Policy at Tsholler@semi.org.

 

May 7, 2013