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  • Export Controls Reform: Paradise on Hold
    Posted by Michael Bruno 6:07 PM on Oct 26, 2010

    If you thought the hard work in export licensing reforms is complete now that the U.S.-U.K. and U.S.-Australia treaties are ratified and the Obama administration is pushing its “four-ones” overhaul [caution: my goofy name for it], then guess again.

    A panel of well-informed analysts on U.S. export reforms, speaking on the sidelines of AUSA in Washington, quickly set me and a few other members of the audience straight this morning, noting that bureaucratic support for the four-ones appears to be tepid, while the world is moving much faster than just the bilateral treaties can handle.

    “We’ve all seen this movie before,” says Joel Johnson, the Teal Group’s executive director for international and formerly with the U.S. Aerospace Industries Association (AIA). Johnson said his optimism is “limited” and that what industry really wants is just for things not to get worse for it inside federal offices as Washington tries to implement the overhaul and treaties.

    “What we don’t want in industry is two more years of disruption,” said Johnson, who left AIA in 2005 as vice president for international after 16 years and spent five years before that as executive VP for the American League for Exports and Security Assistance.

    The four-ones refer to the pillars of the administration’s overhaul, as detailed this year by Defense Secretary Robert Gates and others. Their vision is for a single licensing agency, operating from a single list of restricted goods or capabilities and using a single IT system, to streamline licensing while a single enforcement agency keeps watch. Considering there is currently the Commerce and State departments controlling their respective commercial and munitions lists, with Defense weighing in, you can see why Johnson says industry is anxious about the transition.

    Moreover, Suzanne Palmer, founder and president of Export Compliance Solutions, and formerly with State and Northrop Grumman, says it will be difficult to get to just one agency issuing licenses. Whoever it is is going to rely on the expertise from other agencies in other departments while it gets stood up. Plus, she and Johnson perceive a significant absence of enthusiasm at top State levels for potentially losing control of the diplomatic nature that exports entail.

    To be sure, neither Johnson nor Palmer dismissed the four-ones or treaties – indeed, if anything they lauded them as long-overdue changes. But their sobering take stands in comparison to the unabated cheerleading we heard from AIA and other reform advocates as the administration has pushed the changes. And it’s not just because of bureaucratic resistance or inherent treaty limitations that cause these analysts to curb their own enthusiasm. Johnson noted that industry could stick to a mother-may-I pursuit of licenses to make sure to get it has a license in hand rather than run the risks that not having that preapproval could bring to business relationships.

    Says Johnson, “If you have a piece of paper that says you can do this, you feel a lot better than if you do not have a piece of paper.”

    Tags: ar99, ausa10, export, license

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