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January 23, 2008 

Reform of U.S. Defense Trade Policies and Practices are Abound: President Issues Export Controls Directive

The President issued a directive yesterday calling for more efficient procedures at the U.S. Department of State for export licensing of military equipment, services and data. The directive is designed to limit the period of time the government is permitted to make license determinations for items on the U.S. Munitions List to 60 days. Although the directive indicates that additional funding will be allocated for defense export licensing, it is unclear how much financial support will be made available for this purpose. Under the directive, the Secretary of State is also required to update U.S. controls on defense exports involving dual and third country nationals from NATO and other allied countries. The likely affect of this reform is a reduction in the number of goods that will require a license.

The President’s directive also calls for an electronic licensing system that permits all agencies access to defense related licenses. With respect to the resolution of jurisdictional issues arising from the licensing of defense articles, the President directs the creation of a formal interagency dispute mechanism, “the Commodity Jurisdiction process”, made up of the Departments of State and Commerce, and assigns oversight jurisdiction to the National Security Council. In the same breadth, the President’s directive reflects a continued commitment to prevent the diversion of defense articles to unauthorized users.

The State Department's fact sheet on the effect of the President's directive as it applies to defense trade issues can be found here. The Bureau of Industry and Security's fact sheet on the President's directive as it applies to dual-use export controls can be found here.

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