We receive numerous questions each week regarding “when do I trip the wire as a gunsmith and need to pay the ITAR (Part 122) registration fee?” The answer was always a challenge because the term “manufacturing” is not defined in the ITAR. Furthermore, there are two distinct U.S. laws that concern manufacturing of firearms –the Arms Export Control Act (AECA) (22 U.S.C. §2751 et seq.) and the Gun Control Act (GCA)(18 U.S.C. §921 et seq.). Last week (Friday, July 22, 2016) the Directorate of Defense Trade Controls (DDTC) finally released a three and a half page Advisory Letter consolidating policy guidance about whether various activities related to firearms constitute “manufacturing”. We posted the full DDTC letter on our homepage, see the right hand column below “Subscribe to our Blog” — in the “Download” section.
Export Control Reform
Government Relations, LLC was selected by the U.S. Navy’s International Programs Office (IPO) to participate in its U.S. Industry Partner program. RADM Shannon, Deputy Assistant Secretary of the Navy for International Programs, welcomed the select “Washington Insiders”.
The Defense Security Cooperation Agency (DSCA) gave the first Vision 2020 briefing. The DSCA emphasis was to create and maintain a network of enduring defense partnerships that contribute to a secure international community. DSCA wants to enable more U.S. responsive industry participation in security domestic and international cooperation. They want U.S. defense and security providers to remain (or become) the choice for our international partners, with a focus on Foreign Military Sales (FMS). DSCA wants to increase U.S. FNS customer visibility. The DSA will be synchronizing security cooperation activities to assure effectiveness and efficiency.
The U.S. Department of Commerce’s International Trade Administration (ITA) has been given the responsibility by The White House to support specific U.S. contractor opportunities overseas, especially government to government advocacy. ITA’s responsibility is to provide a counter weight to foreign political pressure by utilizing all resources in the U.S. Government (USG) from department heads to U.S. embassies overseas. ITA’s Defense Advocacy Center (DAC), working with the full USG resources helps ferret out which defense and security leads are worth pursuing and which are only “mid-level foreign bureaucrats making a request that is beyond their pay grade.” As an example, the USG representatives go to “the proper level and helps determine if the mid-level bureaucrat was out of his/her league and did not have authority.” DAC and its USG partners can help U.S. companies “not waste their time on ‘wishful’ requests, which will not lead to real sales.”
Navy IPO partners received an Export Control Reform (ECR) perspective from the inside focusing on ITAR and the shift of United States Munitions List (USML) items to the Export Administration’s (EAR) new Commerce Control List (CCL) 500 and 600 Series. The emphasis was made by all Industry Partner briefers that export license clearance has to be obtain, whether a DSP-5 or other export license issued by ether the Directorate of Defense Controls (DDTC) or the Bureau of Industry and Security (BIS), prior to the USG becoming a nation or exclusive “advocate.”
The final briefing focused on “industry outreach” to the Navy IPO Industry Partners. Government Relations, LLC (GRLLC) can provide domestic companies support in obtaining the Navy IPO and Defense Advocacy Center focus to learn of cross-border defense and security sales opportunities and obtaining the full resources of the USG in furthering efforts on your behalf. Donald E. Ellison, the founder and president, of GRLLC said, “We will be attending many more seminars in the U.S. Industry Partner series. GRLLC is your office in the Nation’s Capital!”
The Export Control Reform (ECR) now enables you to export items more easily than before. Despite making exports simpler and easier, there is a high chance you will need to find help with the ECR. Here is a closer look at 3 reasons why you need help with the ECR:
1. The Changes Enable Simplicity but Are Exhaustive To Understand
While the ECR makes exporting easier, especially less sensitive items, the same cannot be said about the written changes. When you go through the ECR, you will notice that the changes made are highly exhaustive in nature. For example, revisions to the United States Munitions List (USML) have made exporting space-related equipment and parts easier. However, understanding those changes can be time-consuming and you are likely to misinterpret certain changes and run into financial and legal problems. As such, acquiring legal help will help you understand the changes that pertain to your industry.
2. Implementing the ECR Changes in Current Systems May Not Be Easy
Once you understand the changes pertaining to your industry, you still need to integrate the changes into your own system. Integrating these changes can be tricky as you may not know what rules you need to remove from your system and what changes you need to incorporate. Finding technical help will give you an edge and allow you to transition from your old system to the new one effortlessly.
3. The CCL Has Fewer Restrictions but Takes Time to Understand
You already know that the implementation of the ECR has led to 15 out of the 21 USML categories being revised and many items moved to the Commerce Control List (CCL). While the CCL usually has fewer restrictions, you still need to understand the changes and the differences between the restrictions. Moreover, you need to understand the numerous clauses attached to the changed rules.
Finding professional help will make your life easier and will allow you to obtain simple information about the moves from the USML to the CCL and better understand how they affect you. By doing so, you save plenty of time and thus can allocate resources to improving your exports.
The ECR makes exporting easier and places the US at a competitive standpoint in the global market. However, understanding the changes made, including those made to the USML and CCL, can be difficult. As such, there is a high chance you can run into minor legal problems. To avoid reading through the exhaustive changes and risking legal action and heavy fines, seek help from professionals who know plenty about the ECR.