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Championing Responsible National Security Policy

Growing Concerns Over Deregulation of Arms Export Controls

Two weeks ago, the Deputy Assistant Secretary of State for Nonproliferation Programs, Simon Limage, passionately expressed the need for countries to develop strong “laws, licensing systems, and enforcement capabilities” to combat the serious challenge of weapons proliferation at the 14th International Export Control Conference in Dubai. However, he failed to mention that the Obama Administration is quietly dismantling critical controls the U.S. government has employed for decades to effectively curb illicit arms trafficking.

The Administration’s Export Control Reform Initiative ostensibly aims to strengthen national security by increasing the competitiveness of the U.S. defense industry and the focus on the “crown jewels” of U.S. military technology such as target drones and advanced missile systems. Since the Administration began implementing the initiative in October 2013, however, former and current law enforcement officials and U.S. prosecutors have been increasingly raising concerns that it will instead make it easier for our adversaries to illicitly acquire useful U.S. military technology and war materials. The New York Times has called the initiative “shortsighted arms deregulation.”

The problem appears to lie with the Administration’s misreading of the proliferation risks and how to disrupt and effectively combat illicit arms trafficking and smuggling.

According to numerous Justice Department public releases, Chinese, Iranian, Russian, and other foreign procurement networks often focus on acquiring seemingly innocuous U.S. military parts to develop and advance their own weapons systems instead of targeting complete U.S. weapons systems. In the words of a State Department overview of arms trade controls, “exports of small arms or helicopter spare parts can contribute to instability as easily as attack aircraft or missiles.”

In recent years, for instance, Iran has smuggled or attempted to smuggle U.S. military aircraft parts such as canopy panels for the F-5 fighter jet and diaphragm seals for the CH-53 Sea Stallion heavy-lift military helicopter. The Chinese have also illegally acquired U.S.-origin radiation-hardened microchips that have helped them advance their satellite and missile capabilities.

While the Obama Administration says it will maintain strong controls on military items that give the U.S. military and intelligence community a technological advantage, they are significantly weakening controls on many military parts such as the above items, as well as on some complete weapons systems such as Black Hawk helicopters still in use by the U.S. military. Yet, there has been relatively little public attention or congressional oversight of this dramatic deregulation of arms export controls.

A central component of the ongoing deregulation effort has been the regrouping of tens of thousands of military items from the State Department’s more strictly controlled U.S. Munitions List (USML) to the Commerce Department’s more loosely controlled Commerce Control List (CCL). Designed to control civilian or commercial items that may have secondary military applications, the CCL lacks many controls that are key to protecting against the proliferation of military technology and weapons systems. In fact, important U.S. prosecutions of illicit arms trafficking in the past would likely have been undermined had the changes been in place at the time.

In 2012, for example, Pratt & Whitney Canada Corp. (PWC), a subsidiary of U.S.-based United Technologies Corporation (UTC), pleaded guilty to illegally exporting military helicopter engine control software listed on the USML to China. The software was used to help the Chinese military develop its first modern military attack helicopter, the Z-10. Under the changes put into effect this past October, this engine control software could easily fall to the controls of the Commerce Department now. In fact, it is very possible that the software would not have required a license from the Commerce Department before its export to China despite its clear military application. Had that been the case at the time, the criminal and administrative enforcement actions brought against PWC and UTC would likely never have occurred or would have been extremely problematic.

The above example is just one of the enforcement challenges with the Administration’s loosening of export controls for U.S. military technology and war materials. There are many other enforcement gaps in how the Commerce Department controls arms exports on the CCL compared to how the State Department controls arms exports on the USML. These include 1) the availability and use of broad license exceptions to export arms; 2) the failure to require companies and individuals to register with the U.S. government before exporting or brokering arms; 3) the loss of a disclosure requirement when U.S. arms are exported to countries under U.S. arms embargoes (a key charge in the PWC/UTC case above); and, 4) the lack of an annual public report detailing U.S. licensed and unlicensed arms exports to every country.

As the public becomes more aware of the likely damaging effects of these changes, it is critical that they urge Congress to apply the above-mentioned controls, among others, to military items being transferred to the CCL. Without these key controls added to military items on the CCL, the Administration runs the serious risk that its reforms will harm the security and foreign policy interests of the United States, frustrate criminal enforcement in curbing illegal arms trafficking, and undermine U.S. leadership in persuading other countries to establish strong arms export controls.