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Regional stability (RS) controls ensure that exports and reexports of controlled items do not contribute directly or indirectly to a country's military capabilities in a manner that would alter or destabilize a region's military balance contrary to the foreign policy interests of the United States. This control traditionally covers items specially designed or modified for military purposes and certain dual-use commodities that can be used to manufacture military equipment.
On September 23, 2002, the Department of Commerce published a final rule that transferred certain "space qualified" items from the Commerce Control List (CCL) to the United States Munitions List (USML). This rule also clarified the licensing policy for "space qualified" items that remained on the CCL. The rule extended RS controls to the "space qualified" items under nine Export Control Classification Numbers (ECCNs): 6A002.e; 6A008.j.1; 6A998.b; 6D001 (for items in 6A002.c or 6D008.j.1); 6D002 (for items in 6A002.c or 6D008.j.1); 6D991 (for items in 6A002.e or 6A998.b); 6E001 (for items in 6A002.e or 6A008.j.1); 6E002 (for items in 6A002.e, 6A003.b.4, or 6A008.j.1); and 6E991 (for items in 6A889.b). Other items formerly on the USML that have been transferred to the CCL include certain image-intensifier tubes, infrared focal plane arrays, and certain software and technology for inertial navigation systems, gyroscopes, and accelerometers.
This report also notifies the Congress that the Department of Commerce still intends, as was stated in the 2002 Report on Foreign Policy Export Controls, to publish an amendment to the Export Administration Regulations (EAR) that expands the scope of explosive detection equipment controls under ECCN 2A993, which will be renumbered to 2A983, and creates new license requirements for the export and reexport of related software and technology, under ECCNs 2D983 and 2E983. To date, the U.S. Government has required a license only for the export and reexport of this equipment and only to designated terrorist-supporting states. With this amendment, the Department of Commerce will impose broader controls, by requiring a license for RS reasons for equipment, software and technology to all destinations except members of the North Atlantic Treaty Organization (NATO), Japan, Australia, and New Zealand. The amendment is designed to enhance the security and safety of airline travel and physical structures, including government buildings.
Section 742.6 of the EAR requires a license for RS reasons to export certain image-intensifier tubes, infrared focal plane arrays, certain software and technology for inertial navigation systems, gyroscopes and accelerometers, to all destinations except Canada. All license applications for these items are reviewed on a case-by-case basis to determine whether the export could contribute, directly or indirectly, to a country's military capabilities in a manner that would destabilize or alter a region's military balance contrary to U.S. foreign policy interests.
The EAR requires a license for RS reasons to export military-related items (e.g., certain vehicles and trainer aircraft) and certain commodities used to manufacture military equipment to all destinations except member nations of NATO, Australia, Japan, and New Zealand. The U.S. Government will generally consider applications for such licenses favorably, on a case-by-case basis, unless the export would significantly affect regional stability.
Upon publication of the new rule regarding explosive detection equipment, the EAR will require a license for the export and reexport of explosive detection equipment and related software and technologies to all destinations except NATO members, Australia, Japan, and New Zealand. License applications for the export or reexport of such items will be reviewed on a case-by-case basis.
This control provides a mechanism for the U.S. Government to monitor the export of these items to restrict their use in instances that would adversely affect regional stability or the military balance within a region and to protect the national security and foreign policy interests of the United States. The purpose of the expansion of controls on explosive detection equipment and imposition of controls on related software and technology is to enhance the security and safety of airline travel worldwide and physical structures including government buildings.
1. Probability of Achieving the Intended Foreign Policy Purpose. The Secretary has determined that these controls are likely to achieve the intended foreign policy purpose. Regional stability controls, including the planned expanded controls on explosive detection equipment, software, and technology, contribute to U.S. national security and foreign policy objectives by enabling the United States to restrict the use or availability of certain sensitive U.S.-origin goods and technologies that would adversely affect regional stability or the military balance in certain areas.
2. Compatibility with Foreign Policy Objectives. The Secretary has determined that these controls are compatible with U.S. foreign policy objectives. Regional stability controls, including planned expanded controls on explosive detection equipment, software, and technology, are consistent with U.S. foreign policy goals to promote peace and stability and prevent U.S. exports that might contribute to weapons production, destabilizing military capabilities, or terrorist acts.
3. Reaction of Other Countries. The Secretary has determined that any adverse reaction to these controls is not likely to render the controls ineffective. A number of other countries limit exports of items and technologies with military applications to areas of concern, recognizing that such items and technologies could adversely affect regional stability and military balances. For example, the United States and other member countries of the Wassenaar Arrangement each have their own national controls on the export of certain night vision devices. All members of the Missile Technology Control Regime (MTCR) maintain controls on software and technology related to missile guidance and control devices. Although other countries may object to new unilateral RS controls, allies and partners of the United States support U.S. efforts against regional conflict and terrorism and appreciate the need to keep certain equipment and technologies from those who could misuse the items to destabilize countries or regions.
4. Economic Impact on United States Industry. The Secretary has determined that any adverse effect of these controls 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 United States foreign policy objectives. Items controlled for regional stability reasons generally require licenses for export to all destinations except NATO countries, Australia, Japan, and New Zealand. Certain RS-controlled items, including those controlled for missile technology reasons, however, require licenses for export to all destinations except Canada. Explosives detection equipment and related software and technology will require a license to all destinations except NATO countries, Australia, Japan, and New Zealand.
In FY 2002, the Department of Commerce approved 1,662 license applications for items controlled for RS reasons, with a total value of $441 million. Thirteen applications for these items were denied, with a total value of $383,639. In addition, the Department of Commerce returned without action (RWA) 96 applications, valued at $21.8 million. Most of the RWA's were due to commodity jurisdiction questions involving the Department of State or because insufficient end-user or end-use information was provided. Seventy-four of the 96 RWA'd cases were for imaging cameras classified under ECCN 6A003.
The Department of Commerce expects that the amendment to the EAR on the export and reexport of explosive detection equipment and related software and technology may substantially increase the number of license applications for these items. The Department of Commerce anticipates that the expansion of these controls to include a greater range of detection products to most destinations will have an impact on industry. Although the potential economic impact is unclear, security risks necessitate the control. The Department of Commerce will work with industry to minimize any adverse economic effect that may result from this new control.
The table below lists the total number and value by ECCN of export licenses that the Department of Commerce issued for regional stability items during FY 2002:
| ECCN | Description | Number of Applications | Dollar Value |
|---|---|---|---|
| 9A018 | Military trainer aircraft and vehicles designed or modified for military use | 246 | $384,240,118 |
| 6A002 | Optical detectors and direct view imaging equipment incorporating image intensifier tubes or focal plane arrays | 50 | $5,345,325 |
| 6A003 | Imaging cameras incorporating image intensifiers or focal plane arrays | 1,344 | $51,254,474 |
| 6E001* | Technology for the development of equipment, materials, or software controlled by 6A, 6B, 6C, or 6D | 5 | $5 |
| 6E002* | Technology for the production of equipment or materials controlled by 6A, 6B, or 6C | 3 | $1 |
| 7D001 | Software for the development or production of equipment in 7A or 7B | 0 | $0 |
| 7E001 | Technology for the development of items in 7A, 7B, or 7D | 3 | $0 |
| 7E002 | Technology for the production of items in 7A or 7B | 2 | $1,000 |
| 7E101 | Technology for the use of items in 7A, 7B, or 7D | 8 | $64,000 |
| 1B018.a | Equipment for the production of military explosives and solid propellants | 1 | $57,000 |
| 2B018 | Equipment on the International Munitions List | 0 | $0 |
| TOTAL | 1,662 | $440,961,923 |
NOTE: The number of sub-categories under each ECCN that are not controlled for regional stability reasons is insignificant and is not reflected in this data.
*All cases but one under these ECCNs were for the transfer of technology to foreign nationals employed at U.S. facilities.
5. Effective Enforcement of Control. The Secretary has determined the United States has the ability to effectively enforce these controls. Image intensifier tubes, infrared focal plane arrays, certain software and technology for inertial navigation systems, gyroscopes, and accelerometers and other items controlled for regional stability purposes are almost all subject to multilateral controls for either national security or missile technology reasons. The multilateral nature of these controls aids in enforcement. The imposition of unilateral controls for explosive detection equipment, software, and technology is intended to enhance the security of airline travel worldwide and the safety of physical structures, including government buildings. The license requirement should assist in the enforcement of controls on such items by providing a mechanism for determining who exports these systems and to which destinations. The Department of Commerce can effectively enforce these controls by focusing on preventive enforcement, using regular outreach efforts to keep businesses informed of its concerns, and gathering leads on activities of concern. Given the enhanced anti-terrorism efforts of the U.S. Government, it is expected that industry will continue to support enforcement efforts.
The Department of Commerce consults regularly with industry and its Technical Advisory Committees on RS controls. For example, the Department has requested comments from the Sensors and Instrumentation Technical Advisory Committee (SITAC) to assist it in possible revisions to the USML's night vision thermal imaging entry. (Issues regarding licensing jurisdiction of night vision equipment are being addressed in the interagency review of the USML.)
On September 27, 2002, the Department of Commerce, via the Federal Register and the Bureau of Industry and Security's Web page, solicited comments from industry on the effectiveness of foreign policy-based export controls. On October 30, 2002, the SITAC responded by requesting that Category 6 commodities related to commercial night vision and thermal imaging equipment (specifically 6A002, 6A003, 6E001, and 6E002) be moved from Regional Stability (RS) Column 1 to RS Column 2. Although RS Column 1 includes all countries except Canada, the imposition of RS Column 2 controls would allow such items to be exported to Canada, most European Union members, Japan, and several others countries without a license. Due to foreign competition in the United Kingdom, France, and Japan, SITAC stated that "the negative effect on U.S. companies far exceeds the perceived benefit to the foreign policy objective." SITAC cited the importance of thermal imaging for firefighting, law enforcement, and security organizations worldwide. SITAC also stated that the U.S. effort to build a large international coalition to combat terrorism is undermined when the United States restricts access of key technology to allies. SITAC further stated that treating all regions with the exception of Canada as being potentially unstable "dilutes the focus on regions where stability may truly be in question." A summary of all comments received is available in Appendix I.
BIS has received comments from the Regulations and Procedures Technical Advisory Committee (RPTAC) regarding BIS's intention to expand the scope of controls on explosives detection equipment and related software and technology. RPTAC comments will be taken into consideration as the proposed Rule undergoes final government review.
The Wassenaar Arrangement controls most items that the United States controls for RS purposes. Wassenaar participating states have agreed to incorporate the Wassenaar Dual-Use Control List into their own national export controls to prevent exports that could contribute to destabilizing buildups of conventional arms. In addition, members of the MTCR incorporate the MTCR control list into their own national control lists. The Department of Commerce intends to brief allies and major trading partners on the expansion of the scope of controls for explosive detection items and does not anticipate significant objections.
The United States has undertaken a wide range of actions to support and encourage regional stability and has specifically encouraged efforts to limit the flow of arms and militarily useful goods and other special equipment to regions of conflict and tension. U.S. regional stability export controls remain an important element in U.S. efforts to limit regional instability.
Military vehicles and other military-type equipment that are controlled for RS purposes may be obtained from numerous foreign sources. Nearly all of the commodities and related software and technology controlled for regional stability purposes are also subject to multilateral controls for either national security or missile technology reasons under multilateral regimes. Manufacturers of imaging cameras controlled in ECCN 6A003 have voiced complaints to the Department of Commerce that there is considerable foreign availability of these items in Europe and Japan. Although there are multilateral controls on these items, members of the European Union do not control the export of these items among themselves, but U.S. companies are required to obtain export licenses for exports to all destinations except Canada. U.S. industry believes that this disparity hinders them in this market. There also are foreign manufacturers of explosive detection equipment - although none of which produce items with equivalent technical capabilities as to U.S. products. The Department of Commerce is not aware of foreign competitors that, at this time, produce the highest level of Federal Aviation Administration-certified explosive detection equipment.