Export Controls

Export controls have long protected US technology with military applications.  Certain US-origin goods and services require a license before they can be exported or re-exported to certain foreign countries.  US export control laws also restrict “deemed exports,” or the transfer of technology or technical data within the United States to a person who is a non-US national.  Exports are regulated by the US Department of State, under the Arms Export Control Act, and the US Department of Commerce, under the Export Control Reform Act.  New legislation and regulations over the last several years have expanded the reach of export controls, making them also an additional tool for controlling foreign direct investment.  Export controls are not trade actions but do restrict the movement of goods and services.

Arms Export Control Act

The Arms Export Control Act authorizes the President to control the import and the export of defense articles and defense services and to provide foreign policy guidance to persons of the United States involved in the export and import of such articles and services.  The President is authorized to designate which items to consider as defense articles and defense services, which includes hardware that is specifically designed, developed, configured, adapted or modified for a military application, as well as technical data and defense services.  The list of such items is called the United States Munitions List.  The export of these items is prohibited without a license issued by the US State Department.

Export Control Reform Act

The Export Control Reform Act authorizes the President to regulate the export, reexport, and in-country transfer of items that would make a significant contribution to the military potential of any other country or combination of countries which would prove detrimental to the national security of the United States or would further significantly the foreign policy of the United States or to fulfill its declared international obligations.  These items are known as  “dual-use” items—i.e., US-origin civilian products, materials, technology, technical data and software that have potential military applications, and are listed on the Commerce Control List.  The export of these items is prohibited without a license issued by the US Commerce Department.

Application

The legislation has a number of goals:

• To control the release of items for use in the proliferation of weapons of mass destruction or of conventional weapons; the acquisition of destabilizing numbers or types of conventional weapons; acts of terrorism; military programs that could pose a threat to the security of the United States or its allies; or activities undertaken specifically to cause significant interference with or disruption of critical infrastructure.

• To preserve the qualitative military superiority of the United States.

• To strengthen the United States defense industrial base.

• To carry out the foreign policy of the United States, including the protection of human rights and the promotion of democracy.

• To carry out obligations and commitments under international agreements and arrangements, including multilateral export control regimes.