Where Industry and Security Intersect
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Certain technology transferred from the United States Munitions List to the Commerce Control List (CCL) is subject to “enhanced control.” This technology is designated on the CCL by the acronym “SI,” which stands for “Significant Items.” The technology controlled for SI reasons is “hot section” technology for the development, production, or overhaul of commercial aircraft engines, components, and systems. Technology controlled for “significant items” reasons is classified under various paragraphs of export control classification number (ECCN) 9E003 on the CCL. All technology controlled for “significant items” reasons is also controlled for “national security” reasons.
The licensing policy for “hot section” technology is as follows:
A license is required for exports and reexports to all destinations, except Canada, for “hot section” technology.
The United States reviews license applications for “hot section technology” on a case-by-case basis to determine whether the proposed export or reexport is consistent with national security and foreign policy interests.
In Fiscal Year 2006, BIS expanded SI controls on technology controlled under ECCN 9E003.a.11, which is technology required for the development, production, or overhaul of all types of hollow fan blades for commercial aircraft engines (previously limited to fan blades that were “wide cord” and “without part-span support”) (71 FR 52956). This change was made because of revisions to this ECCN made by the Wassenaar Arrangement.
As with other technologies controlled for SI reasons, an export license will be required to export this technology to all destinations except Canada . Applications will be reviewed on a case-by-case basis to determine whether the export or reexport is consistent with U.S. national security and foreign policy interests. For designated terrorism-supporting countries or embargoed countries, the applicable licensing policies are found in Parts 742 and 746 of the EAR (Supp. No. 1 to Part 736 of the EAR for Syria ).
This control provides a mechanism for the United States to monitor the export of this technology more closely to prevent its use in a manner that would adversely affect U.S. nonproliferation goals or the military balance within a region.
1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has determined that this control is likely to achieve the intended foreign policy purpose, notwithstanding various factors, including the availability of these SI-controlled items from other countries, and that the foreign policy purpose has only been partially achieved through negotiations on export controls with the participating states of the Wassenaar Arrangement.
2. Compatibility with Foreign Policy Objectives. The Secretary has determined that this control is compatible with U.S. foreign policy objectives, and that the extension of this control will not have any significant adverse foreign policy consequences. The control is consistent with U.S. foreign policy goals to promote peace and stability and to prevent U.S. exports that would contribute to inappropriate military capabilities abroad.
3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to this control is not likely to render the control ineffective, nor will any adverse reaction by other countries be counter-productive to U.S. foreign policy interests. “Hot section” technology for commercial jet engines is subject to dual-use export controls by other allied countries. These countries also recognize the desirability of restricting goods that could compromise shared security and foreign policy interests.
4. Economic Impact. The Secretary has determined that any adverse effect of this control on the economy of the United States , including on the competitive position of the United States in the international economy, does not exceed the benefit to U.S. foreign policy objectives. In Fiscal Year 2006, the Department of Commerce approved 153 licenses for technology controlled under ECCN 9E003. Most of the 153 licenses approved involved the export of “hot section” technology, but 46 of those involved deemed exports (i.e., the transfer of “hot section” technology to foreign nationals in the United States ). The total dollar value of the licenses approved was $14.6 million in Fiscal Year 2006. There were no rejections of applications involving the transfer of engine “hot section” technology in Fiscal Year 2006.
5. Effective Enforcement of Control. The Secretary has determined that the United States has the ability to enforce this control effectively. The U.S. Government does not experience any unusual problems in enforcing this control. Manufacturers and intermediary companies are familiar with U.S. controls on these products and technology. With the exception of hot section technology not covered by 9E003.a.1 through 9E003.a.11, which is currently used in civil derivatives of military engines controlled on the U.S. Munitions List (9E003.h), all of these items also are subject to multilateral controls. Therefore, cooperation from foreign government enforcement agencies is useful in preventing and punishing violators.
As needed, the Department of Commerce consults with the Transportation Technical Advisory Committee, although there are no major changes envisioned to this control on the CCL.
In an October 23, 2006 , Federal Register notice (71 FR 62065), the Department of Commerce solicited comments from industry on the effectiveness of U.S. foreign policy-based export controls. In addition, comments were solicited from the public via the BIS website. Comments from the Department’s six Technical Advisory Committees and the President’s Export Council Subcommittee on Export Administration are solicited on an ongoing basis and are not specific to this report. The comment period closed on November 22, 2006 , and three comments were received. A detailed review of all public comments received can be found in Appendix I.
The United States has taken the lead in international efforts to stem the proliferation of sensitive items, urging other supplier nations to adopt and apply export controls comparable to those of the United States . The major industrial partners of the United States maintain export controls on almost all of this equipment and technology and control them as dual-use commodities. Pursuant to their agreement to establish a regime for the control of conventional arms and sensitive dual-use goods and technologies, the participants in the Wassenaar Arrangement have agreed to control these items (with the exception of 9E003(h) noted above, which the United States has not sought to control in Wassenaar) and to ensure that transfers of such items are carried out responsibly and in furtherance of international peace and security.
The U.S. Government has undertaken a wide range of diplomatic endeavors, both bilateral and multilateral, to encourage proper control over these items, and has been successful in reaching multilateral agreement in the Wassenaar Arrangement to control most of these items. The United States has specifically encouraged efforts to prevent the unauthorized use or diversion of these items to activities contrary to U.S. national security and foreign policy concerns. However, these efforts do not replace the continued need for the additional control.
Although the United States has been the world leader in this technology, other countries produce “hot section” technology. Most countries that are producers of “hot section” technology are participants in the Wassenaar Arrangement and control these items (with the exception of items controlled under ECCN 9E003.h noted above) as dual-use items in accordance with their national licensing policies. The commitment of the U.S. Government and its Wassenaar partners to maintain controls reflects the cooperation among governments to reduce foreign availability.