U.S. export control reforms starting to help U.S firms - official

COLORADO SPRINGS, Colorado Tue May 20, 2014 6:15pm EDT

COLORADO SPRINGS, Colorado May 20 (Reuters) - U.S. export control reforms are helping U.S. companies sell more goods overseas at a time when U.S. defense spending is declining, a top U.S. Commerce Department official said.

Commerce Undersecretary Eric Hirschhorn told Reuters that moving some items from the State Department's tightly controlled munitions list to the Commerce Department's list of items that could be more easily exported to allies was speeding up the export process and helping U.S. companies.

It would also eliminate the ability of U.S. competitors to market their products as "ITAR-free" or not requiring tough reviews required under the U.S. International Traffic in Arms Regulations (ITAR) law, he said in an interview on Monday.

"There is more receptiveness on the part of European allies to buying parts that are under the Commerce jurisdiction," Hirschhorn told Reuters during a conference hosted by the Space Foundation. "It's a big difference. It used to be the reason for not using U.S. products."

The Obama administration last year kicked off a series of changes to simplify export licensing requirements for less sensitive items and build better protections for the most critical technologies. Items already addressed include aircraft, gas turbine engines, military vehicles, and satellites, which account for over 90 percent of all export licenses.

U.S. aerospace and defense companies including Boeing Co have long clamored for a streamlined export control process, arguing that slow processing of license requests has cost them billions of dollars in sales.

Hirschhorn said the government expects to publish new guidelines for defense electronics in June but is still working on other issues, including encryption technology, night vision equipment, cybersecurity technologies and unmanned vehicles.

Items regulated by the Commerce Department that account for less than 25 percent of the value of a system are only subject to export controls if they are going to an embargoed country.

"It really lubricates the system," he said, noting that companies now knew the conditions for export and most licenses handled by the Commerce Department took two weeks to process.

He said the U.S. government was working with allies on possible cyber export controls and was studying the broader issue of export licenses for unmanned aerial vehicles.

"There's general recognition that there is a future for these kind of vehicles in the commercial sector and we can't ignore that," he said. "There are concerns about misuse as well. It's something that the administration is taking seriously."

Hirschhorn said the administration planned a fairly regular review of controls to better track of advances in technologies.

Rick Ambrose, who heads Lockheed Martin Corp's space business, welcomed the export control reform effort, and said it was already changing discussions with potential foreign buyers.

"It's much different. It's a good step in the right direction," Ambrose said. "There will be some components that will have some restrictions, but it will be scaled back and a little more manageable." (Reporting by Andrea Shalal; Editing by Cynthia Osterman)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.