Where Industry and Security Intersect
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Washington, DC 20230
29 January 2008
The SITAC meeting was held at the Department of Commerce in Room 3884 from 9:30 am to 12:30 pm.
The open session covered the following topics which was followed by a brief closed session:
1. Welcome and Introductions
2. Remarks from the Bureau of Industry and Security Management
3. Industry Presentations
4. New Business
5. Meeting Adjournment
Welcome and Introductions.
John Goodrich opened the meeting with an introduction of all of the attendees. The Department of State was represented by John Albert and Greg Tarr. The Department of Defense was represented by Gordon Anderson. The only teleconference participant in this meeting was Donald Weadon who was representing Weadon and Associates, a law firm in District of Columbia.
Remarks from the Bureau of Industry and Security Management.
- Shortly after the introductions, John Goodrich introduced Matt Borman, the Deputy Assistant Secretary for the Bureau of Industry and Security. He described some of the initiatives that he was taking to improve the exportability of certain imaging cameras incorporating uncooled microbolometer focal plane arrays. He mentioned that he was attempting to scheduled a meeting with the National Security Council ( NSC) to continue pressing for changes to the regional stability controls which began nearly two years ago. He believes that the current delay in arranging the next meeting is because the NSC was finalizing the National Security Policy Directive (NSPD). Such changes would affect export controls on infrared cameras incorporating uncooled microbolometers having more (less?) than 21,000 pixels. In the mean time, he intended to press forward with revisions to infrared cameras incorporating focal plane arrays with smaller array formats as DoD had agreed to at the NSC. He intended issue a final rule to DoD and DoS within a week as it was not necessary to go to the general public again. This would reduce the time needed for review even though he would like to SITAC members to comment on it once it was written.
- Stan Kummer of L3 asked if this new regulation meant that DoC was not going to pursue the more expansive recommendation that was submitted to the NSC. Mr. Borman explained that he was committed to the original proposal but wanted to get some relief for the thermal imaging industry as soon as possible. He did not believe that seeking relief on the 160x120 pixel microbolometer based cameras would undermine the DoC position on higher performance camera decontrols proposed to the NSC.
- Bernie Kritzer who summarized licensing statistics for sensors and cameras. He stated that from 1 October 2007 to 22 January 2008, there were 756 license applications processed worth $75,684,180 USD. Of these applications, 659 were approved, none were rejected, and 97 were returned without action. Only 291 were actually shipped against and the average processing time was 27 days for all applications.
During the same time period in the previous fiscal year, there were 701 export applications received worth $40,491,253 USD. Of these applications, 666 were approved, 40 were RWA’d, and 1 was rejected. There were 391 licenses actually shipped against with the average processing time of all applications being nearly 33 days.
The number of export licenses shipped against has decreased by 25% during the first quarter of the last two fiscal years despite the increase in revenue. The licensing volumes have steadily decreased as well. In CY05 there were 2587 license applications received. In CY06 there were 2430 and by CY2007 the number of license applications the Bureau had processed had fallen to 2400. This decline has continued despite an increase in worldwide demand for microbolometer based imaging cameras.
- Mr. Goodrich was concerned about recent comments that many licenses were being held up by the DoD objection to the use of license exception APR (additional permissive reexports). Mr. Kritzer outline the current DoD concern and how the operating committee was preparing to resolve the issue. Mr. Kritzer believes that the pending 135-140 cases may be held up for one to two weeks before the issue gets completely resolved. However, he was hopeful that these cases would not be escalated to the advisory committee on export policy (ACEP) for resolution.
- Mr. Goodrich invited James Thompson, Director of the Sensors and Aviation Division, to provide a general update on Wassennaar related matters. Mr. Thompson mentioned that there were about fifty proposals that had been submitted for review from industry, DoC, and DoD. Of these proposals, he believes that there is agreement on only eleven so far- none of them being from Category 6. The ones that have not been agreed to can be escalated to the NSC for a determination on how to proceed.
- The DoD representative, Dr. Anderson, arrived at the meeting where he was introduced. Mr. Goodrich invited Mr. Kritzer to say a few comments on Dr. Anderson’s impending retirement which was scheduled for 3 February. Mr. Kritzer, and the SITAC participants, thanked Dr. Anderson for his long and distinguished service in export controls. Dr. Anderson did not know who would be his successor at future SITAC meetings.
- Mr. Goodrich then invited Kevin Kurland of the Office of Technology Evaluation ( OTE) to give an overview of foreign availability assessments. Mr. Kurland began by stating that his office is involved in (1) evaluating technology controls and effectiveness, (2) foreign availability assessments, and (3) industrial technology base assessments. He also stated that the NSPD included a section on the importance of foreign availability assessments. Mr. Kurland explained that the NSPD talked about developing a broader method to evaluate such assessments beyond the national security scope.
Part 768 describes the foreign availability assessment process and specifies the four criteria that needs to be addressed to begin an assessment. These include (a) availability-in-fact, (b) non-U.S. source, (c) sufficient quantity, and (d) comparable quality. Don Weadon commented on the previous foreign availability assessment that was submitted by the SITAC in 2001 when Stan Kummer was the chair. He claimed that the Bureau’s Undersecretary at the time, Kenneth Juster, determined that the submission did not meet the sufficiency standard. He thought it may be useful to use the old submission as a basis for the new assessment. Kevin Kurland explained that he thought that new information would be more informative than older data. Joe Chuchla, a consultant, said that he believed in the past that information such as full production volumes, list of customers, and participation in testing devices needed to be part of the foreign availability submission. This would be difficult to obtain from foreign sources. Mr. Kritzer explained that such data may not be required given the current evidence found in brochures and the literature. Kevin Kurland wanted to clarify that since countries like the PRC did not appear to manufacture microbolometer focal plane arrays, that such focal plane arrays were obtained from ULIS in France under licenses. This, he questioned, would imply that the cameras produced in the PRC were potentially not useful in showing an indigenous PRC capability. However, members of the SITAC argued that there were no end-user controls on the French licenses and so the cameras produced in the PRC were actually uncontrolled. Kevin Kurland suggested that the SITAC look to find sources of focal plane arrays and cameras in uncontrolled countries such as Taiwan and Israel who are not members of the Wassenaar Arrangement. Mr. Goodrich asked Kevin Kurland about the foreign availability process and its conclusion. Kevin Kurland and Joe Chuchla explained that while national security controls could be removed from certain countries, the regional stability controls on cameras would still apply. This meant that licenses would still be needed for export to the European Union and he wondered whether or not this would be helpful. Given that Mr. Borman was seeking to eliminate regional stability controls on lower performance cameras, a change in national security controls would be useful for such cameras according to Jim Thompson. Furthermore, Mr. Thompson argued that it may be possible to remove regional stability controls unilaterally if foreign availability was found.
- Camille Caesar, an attorney for the Office of Chief Council thought, despite the earlier foreign availability submission which was ultimately rejected, that it was important for the SITAC to continue to press for changes to export controls that were justifiable. Otherwise the military industrial base would be weakened. She believes that there is a renewed interest in updating such controls by senior management. Peter Klason, also from the Office of Chief Council, mentioned that if the SITAC certifies foreign availability of a commodity, that there is a 90 day window for the Secretary of Commerce to make a determination and seek ways to remedy the situation. Even if regional stability controls remained and national security controls were removed, it could be used as a positive force in seeking to inform the NSC as to the need for a policy change.
- Jim Thompson commented further that the Department of Homeland Security (DHS) is now involved in the Commodity Jurisdiction process. They can become involved whenever they have an interest in the technology or commodity being adjudicated. For instance, Mr. Thompson mentioned that aircraft landing systems may be of interest to DHS.
- Don Weadon explained that the SIES study showed that export controls on uncooled microbolometer based cameras were harming the military industrial complex. He called for a more concerted effort to resolve this important issue.
- Kevin Kurland wanted to reinforce the idea that if the SITAC proceeded with a foreign availability assessment, that he would be willing to work with them to ensure that it does meet the necessary criteria for submission. He furthermore suggested that the SITAC committee not restrict itself to the providing data on controlled countries but to uncontrolled countries as well.
- Bill Root commended the Department of Commerce for attempting to find ways to put forth changes in controls on sensors given the difficulty in changing regulatory, not statutory, text.
Industry Presentations.
None.
New Business.
- Mr. Goodrich and Kamil Agi asked Mr. Kritzer to try and provide a copy of an unclassified version of the NSPD to the SITAC.
- Mr. Goodrich stated that the next SITAC meeting would be held on the last Tuesday of April.
Meeting Adjournment.
- John Goodrich then adjourned the open session and the January SITAC meeting.