US proposes new export control rules for aircraft

Mon Nov 7, 2011 7:18pm EST

* Industry hails proposed reforms as "major milestone"

* Changes to save paperwork, lowering costs -industry group

WASHINGTON Nov 7 (Reuters) - The Obama administration on Monday proposed new rules to govern exports of military aircraft and associated parts, a move that a major industry group said would save U.S. companies time and money.

The proposed changes, published in the Federal Register, call for certain less sensitive items such as nuts, bolts and fasteners, to be moved under the oversight of the Commerce Department, while providing more specific language to govern exports of complex items such as avionics.

The Aerospace Industries Association, which includes major aerospace companies such as Boeing Co and Lockheed Martin Corp , welcomed the changes as a "major milestone" in long overdue efforts to reform Washington's "cumbersome and outdated export control system."

The proposed changes are the second in a series of detailed export control reforms initiated by the Obama administration last year, following changes to export rules for military vehicles and tanks that were released this summer.

Remy Nathan, vice president of international affairs for the trade group, said U.S. companies would still need to seek permission to export military aircraft and associated items, but the process would be streamlined for items that were essentially commercial in nature.

"This is not changing no's to yes's; it's the process by which you get to yes, and get to export," Nathan said.

Moving low-risk items from the Munitions Control list, which is administered by the State Department, to the Commerce Control List would allow companies to get certain export approvals in advance, as opposed to seeking approval for such exports for each transaction.

"It's paperwork, it's time, and all of that equates to cost," Nathan said.

AIA said it would submit comments on how to improve the proposed revisions but gave no details.

The Federal Register notice said items were retained on the Munitions List if they were either inherently military or possessed characteristics that provided a critical military or intelligence advantage to the United States.

It said the changes would serve national security by allowing greater cooperation with NATO and other allies and help improve the U.S. defense industrial base by reducing incentives for foreign companies to avoid U.S. items that were subject to export control restrictions.

The changes would also allow the U.S. government to "focus its resources on controlling, monitoring, investigating, analyzing, and, if need be, prohibiting exports and reexports of more significant items to destinations, end uses, and end users of greater concern than our NATO allies and other multi-regime partners," according the notice.

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