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December 22, 2016

ECR Continues with More Changes Affecting Military Aircraft, Gas Turbine Engine Items

As part of the Export Control Reform (ECR) Initiative, on October 15, 2013 certain military aircraft and gas turbine engine items were added to the Commerce Control List (CCL). At the same time, the U.S. Munitions List (USML) was amended by revising Category VIII (Aircraft and Related Articles) and by creating Category XIX (Gas Turbine Engines and Associated Equipment) to describe items controlled in those categories in positive, objective terms. Then in 2015, the U.S. Departments of Defense, State, and Commerce reviewed these changes to assess their effectiveness and utility. The Departments of Commerce and State solicited public comments at that time and issued in February 2016 proposed rules to revise the treatment of military aircraft and gas turbine engine items. Following an interagency review of the public comments on the proposed rules, on November 21, 2016 the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and State Department issued final rules.

The State Department’s final rule described more precisely the items controlled in USML Categories VIII (aircraft and related articles) and XIX (gas turbine engines and associated equipment). Moreover, the State Department subsequently posted a notice stating that as a result of its final rule “a narrow range of articles” (which relate “primarily to next-generation platforms”) previously subject to the Export Administration Regulations (EAR) will become subject to the International Traffic in Arms Regulations (ITAR). BIS’ final rule implemented certain clarifications and revisions regarding military aircraft and gas turbine engines as well as related items. Specifically, BIS clarified the types of military aircraft controlled on the CCL and clarified and expanded the lists of items controlled only for anti-terrorism reasons; among other things. Both rules become effective December 31, 2016.

Below is a synopsis of BIS’ major changes.

Note Regarding Castings, Forgings and Other Unfinished Products

BIS made the following changes to Section 770.2 of the EAR:

ECCN 3A611
BIS made the following changes to ECCN 3A611:

ECCN 8A992
BIS made the following changes to ECCN 8A992:

ECCN 9A115
BIS made the following changes to ECCN 9A115:

ECCN 9A610
BIS made the following changes to ECCN 9A610:

ECCN 9A619
BIS made the following changes to ECCN 9A619:

ECCNs 9B610 and 9B619
BIS made the following changes to ECCNs 9B610 and 9B619:

ECCN 9C610
BIS made the following changes to ECCN 9C610:

ECCN 9C619
BIS made the following changes to ECCN 9C619:

ECCN 9E610
BIS made the following changes to ECCN 9E610:

ECCN 9E619
BIS made the following changes to ECCN 9E619:

For specific questions, please contact us.

[1] Paragraph .g of ECCN 8A992 controls certain inboard and outboard marine engines other than gas turbine engines.
[2] BIS stated that the “addition of the national security controls would not increase the number of destinations to which a license is required for the commodities controlled by these paragraphs as those paragraphs already have missile technology and regional stability controls.”
[3] BIS stated that this “classification will retain the license requirement for all destinations except Canada and, like all other aircraft controlled under ECCN 9A610.a, License Exception STA will not be available for the LM-100J aircraft unless such use is approved pursuant to the procedures set forth in § 740.20(g) of the EAR.”
[4] BIS stated that there are many types of underwater beacons, but that underwater beacons installed on aircraft generally are designed to facilitate locating the aircraft if it crashes in the water. BIS's intent is to cover only these types of beacons.
[5] The materials proposed by the State Department in USML Cat. XIX included: “Powders specially designed for thermal or environmental barrier coating of defense articles enumerated in paragraphs (f)(1)-(f)(4) of this category;” “Superalloys (i.e., nickel, cobalt or iron based), used in directionally solidified or single crystal casting, specially designed for defense articles enumerated in paragraphs (f)(1)-(f)(4) of this category;” and “Imide matrix, metal matrix, or ceramic matrix composite material (i.e., reinforcing fiber combined with a matrix) specially designed for defense articles enumerated in paragraphs (f)(1)-(f)(4) of this category.”
[6] License Exception Strategic Trade Authorization (STA).