International Trade Law News

Published by Jacobson Burton Kelley PLLC

Five axis grinding machines are controlled by the Export Administration Regulations (EAR) under ECCNs 2B001.b.2 (mills) and 2B001.c.2 (grinders). Exports of five axis machine tools from the U.S. are controlled for NS, NP, and AT reasons and there are no license exceptions.

The following is a summary of the key findings of the critical technology assessment:

• Foreign availability of certain five axis simultaneous control mills, mill/turns, and machining centers controlled by ECCN 2B001.b.2 exists in China and Taiwan, both having an indigenous capability to produce five axis simultaneous control machine tools with parameters comparable to those produced in the U.S.;

• U.S. export license processing times, especially to China, are longer than those of other Wassenaar Arrangement members, placing U.S. exporters at a competitive disadvantage;

• The U.S. is losing market share to its European and Asian competitors, particularly South Korea;

• U.S. producers of five axis simultaneous control machine tools, while currently profitable, face an uncertain future for their five axis machine tool product lines with imports outpacing domestic sales and increasing customer demand for foreign machine tools;

• A potential vulnerability exists with regard to sensitive data stored in the computerized numerical controllers of machine tools connected to the Internet.

As a result of the assessment, the following recommendations were made:

• The EAR should be amended to facilitate the export of five axis simultaneous control mills, mill/turns, and machining centers of certain precision accuracies controlled by ECCN 2B001.b.2 with foreign availability to controlled countries under license exception or similar-type authorization, and work with international partners to modify the existing multilateral export control of five axis simultaneous control machine tools;

• Producers and distributors of these machine tools are encouraged to identify or develop anti-tampering and anti-diversion features that can be utilized to mitigate concerns of machine tool misuse or diversion after export to facilitate interagency review of license applications to sensitive destinations;

• Improve communication between U.S. companies and U.S. export licensing officials to decrease processing times of license applications for exports destined to China;

The complete report can be found here (pdf).

Labels: BIS, Export Controls