Where Industry and Security Intersect
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Department of Commerce, HCHB Room 3884, Washington, DC
29 April 2008 - 9:30 a.m.
Minutes of Meeting
Open Session
Welcome and Introductions
- The SITAC chair, John Goodrich1 opened the meeting with an introduction of all of the attendees. The Department of State was represented by Dr. John Albert, Greg Tarr, and Lisa Wenger.
- John Goodrich recognized Christopher Costanzo with a certificate of accomplishment signed by the attending members of the SITAC in recognition of achieving a doctorate while continuing to service as the Designated Federal Official (DFO) of the committee.
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. In particular he mentioned that he had sent a regulation out two weeks earlier to the Departments of State and Defense asking for their comments on the proposed changes to regional stability requirements for cameras. The new rule, if agreed to, would:
-- make cameras incorporating 160 x 120 element focal plane arrays subject to national security (NS2) controls.
--make cameras incorporating 320 x 240 element focal plane arrays subject to regional stability (RS2) controls.
--require licenses for military end-user and end-uses.
--institute a reporting requirement for all cameras exported under the no license required provision (NLR).
-Matt Borman explained that there have been two Policy Coordinating Committee (PCC) meetings already to discuss the proposed rule. If no agreement can be reached, he expects that additional PCC meetings will be held. Matt Borman also mentioned that the Wassenaar Arrangement (WA) regulations addressing low light level devices will be sent interagency this week.
- L3 representative Mr. Stan Kummer asked BIS to comment on two specific issues.
First, he asked if BIS could describe what the new rule on low light level devices would entail. BIS representative John Varesi stated that charge multiplication devices, devices with an extended spectral response into the infrared, or hybrid devices would be identified on the Wassenaar dual use list2. The Department of Commerce believes that these new devices will be licensed as dual use items with the following provisos and that no licenses will be required to the European Union nations and there will be no military end use or end-user controls.
Second, he asked Matt Borman what was slowing down acceptance of the proposed regional stability rule which appeared imminent at the last meeting. Matt Borman explained that, in his mind, he believed the Additional Permissive Reexport (APR) restrictions he was offering now should be sufficient to address the interagency concerns. He stated that DoD has now been offered everything that they asked for two years earlier.
- Matt Borman than asked if anyone had any further questions and subsequently turned the discussion over to Bernie Kritzer who explained that long time export practitioner Donald Weadon, esq. had passed away. Bernie Kritzer gave a brief summary of Mr. Weadon’s accomplishments which ranged from military service in the Navy to his thriving law practice in the District. He invited Carol Kalinoski, one of Mr. Weadon’s colleagues, to say a few words. She praised him as being a “lion” in export controls.
- Bernie Kritzer continued stating some licensing statistics. There were 1336 export applications processed between 1 October 2007 and 14 April 2008. These applications totaled $162 million USD. While 1184 of these licenses were approved, 150 were returned without action and 2 were rejected. Of the approved cases, only 595 had been shipped against3. The average processing time remains at about 29 days for 6A003 cameras with the top ten destinations (decreasing value) being Sweden, France, UK, Switzerland, Germany, Italy, Turkey, Mexico, Norway, and Australia. Bernie Kritzer commented that the low ship rate may be related to the worldwide availability of infrared cameras despite the falling exchange rate for the U.S. dollar.
- Mr. Goodrich asked if the issue resulting in a spate of licenses being escalated to the Operating Committee which occurred in the prior quarter had been resolved. BIS representative John Varesi commented that the issue had been resolved. The solution was arrived at by clarifying a note on the standard conditions which now states that APR is available to 6A003 commodities.
- James Thompson, director of the Sensors and Aviation Division, spoke next stating that eight proposals in Category 6 had been forwarded to Wassenaar for review. Most of these, he claimed, would have a minimal impact on thermal imaging camera manufacturers in the U.S. as they pertained mostly to hydrophone based systems and some clarification notes on the image intensifier tube photocathode. James Thompson also commented that there would be an intercessional meeting in the summer that would begin revising export controls on 6A002 and 6A003 commodities. John Varesi continued by explaining that this working group will address not only low light level commodities but thermal imaging ones as well. This effort will be focused on how to add new items to the list easier. Furthermore, this group will attempt to standardize certain definitions which have not kept up with development of newer technologies. While Dr. Harrington is away, Greg Tarr will head up the working group. Greg Tarr wants to make the WA language more understandable and try to rewrite the controls so that they are based on performance instead of material or technology dependent.
- James Thompson challenged the industry members to consider attending the summer intercessional meeting in Vienna. He acknowledged that this would be at their own expense although he could help make arrangements for them so that they could attend the meetings.
- Bill Root had posed two questions to the BIS management
First, he mentioned that the last publication of the Wassenaar agreed changes took 11 months. He wondered if the latest changes would take as long. Bernie Kritzer stated that he thought that the regulation would be published sooner than the previous changes since the rule had been divided into two sections, making some parts easier to agree to than others.
Second, he commented that the term “specially designed” had been elevated to the court system where the appeals court has stated that “specially designed” has no legal meaning. Stan Kummer highlighted the importance of this term as it is used in not just the CCL but also the ITAR and in the Commodity Jurisdiction process. Bernie Kritzer said that he would speak with Matt Borman about this issue later.
Industry Presentations
- Patton Boggs representative and council for NoblePeak Mr. Daniel Waltz was introduced at the SITAC by Mr. Goodrich. He elaborated on the problem his client is facing by describing the origin of the TriWave camera which is designed for use in the security market. It operates in the short wave infrared spectrum and was developed for applications where placing physical lighting is not practical. Customers would include WalMart and Jack in the Box where this device could be used in low light level situations. He mentioned that NoblePeak had been denied funding by DoD on at least 5 separate occasions with the most recent occurrence being a year old. Mr. Waltz continued stating that a previous export license was issued by the USG after been heard at senior levels within the Department of Commerce who debated the pending commodity jurisdiction request. The commodity jurisdiction request was submitted by DTSA without any vetting by the company prior to submission. Mr. Waltz then explained that he sent letters and emails to a number of officials at the Department of Defense including Beth McCormick and also to Bob Kovac and Ann Ganzer at the Department of State on the 16th of the month requesting them to convene a meeting to discuss either withdrawing the faulty submission or to allow the company representatives to meet with USG officials to explain the facts surrounding this CJ. As of the SITAC meeting, they had not acknowledged receipt of the letter or email.
- Dr. Frank Vallese, the CEO of Electrophysics Corporation based in New Jersey, than asked to be recognized by the chair. He explained that a similar situation arose with his latest product – the HotShot HD camera. This is a thermography camera specifically designed for civil markets. It makes use of a 640 x 480 element uncooled microbolometer focal plane array and as such represents the latest evolution of thermography cameras. Dr. Vallese was concerned about the current pending CJ on his product as DTSA had submitted the CJ without his knowledge and input.
- Lisa Wenger of the Department of State was asked what she know of the increase in CJ filings by DTSA and if she could explain why State is not adhering to the ITAR in their rulings. She was unable to provide a clear answer to the members. It was therefore suggested by Dr. Costanzo that she invite Bob Kovac to the next SITAC meeting and have him explain the process which has become very confusing according to the industry.
- L3 representative Mr. Stan Kummer then presented his thoughts on the Foreign Availability . He began by mentioning that he had met with Kevin Kurland of the Office of Technology Evaluation on Monday to discuss his planned submission. He conveyed to the industry participants that such assessments had not been performed in a long time and that there was a lot of work being done on both USG and industry to understand Part 768 of the EAR. He went on to say that there were four critical elements which needed to be demonstrated in order to obtain a successful foreign availability finding. These elements were (1) sufficient quantity, (2) availability in fact, (3) comparable quality, and (4) there had to be non-U.S. sources of the item. Mr. Kummer went on to say that while it has been known that Wuhan Guide, SAT, and Dali were well established companies manufacturing infrared cameras in the PRC, that he learned recently that there were at least three new Asian based corporate entrants to this market which were Wuhan Hua Zhong Numerical Control (PRC), Nanjing Kuyee Technology Company (PRC), and KG Instruments (Malaysia). Mr. Kummer also explained that a foreign availability finding would only affect controls to that destination, not a globally. He questioned whether or not ACTI would be willing to engage in this effort given the perceived value that might result for the industry. Although he expected that there would be a discussion at the ACTI meeting later to decide. Mr. Kummer ended his presentation on the foreign availability submission and then began a brief overview of what was presented at the March SPIE conference held in Florida.
The SPIE conference is the largest U.S. gathering of the worldwide thermal imaging community4. This show touts extensive education programs, technical presentations, and a trade show. The most notable exhibits being displayed this year included the Israeli high resolution microbolometer focal plane arrays5 from Semi Conductor Devices (SCD) and the cameras that incorporate them from Opgal. Even Chinese camera manufacturers such as Dali were showing their predictive maintenance cameras at the show. There were U.S. distributors of foreign cameras also demonstrating their latest products. Mr. Kummer also explained that the number of technical papers detailing advancements in microbolometer development had grown considerably. The U.S. was not keeping up. From the publications and presentations at the conference, it was seen as one in which the U.S. was losing its lead in both uncooled and cooled infrared camera developments6. A number of countries including the British, French, and Israel were demonstrating their midwave and longwave cooled systems which were developed using the coveted mercury-cadmium-telluride (HgCdTe) and platinum silicide (PtSi) material.
- Mr. Kummer noted that in preparing the foreign availability presentation he found out that Dr. William Wells had passed away.
New Business
None.
Meeting Adjournment
- John Goodrich then adjourned the open session of the April SITAC meeting.