Clifford Chance
Publication of the First Final US Export
7 May 2013
The first set of final Export Control Reform rules should have caught no one by surprise given the steady drumbeat since 2009 announcing the US government's intent to rethink its entire approach to protecting sensitive US technology. These new rules, published in final form on April 16, 2013, by the US Departments of Commerce and State, have been previously published in five proposal notices, commented on extensively by interested parties, and discussed via weekly teleconferences with the officials involved. And yet, they promise a shock, pleasant or unpleasant, to export compliance systems and managers who have not experienced reforms on this scale in decades.
The new rules begin a massive shake up of the existing controls for US exports. The Reform effort boils down to this: only the most sensitive or strategic items will be covered by
the strictest controls and those items will be enumerated in a positive list; the rest, that had been captured with "catch-all provisions" and other "bucket classifications," will move to a
different list and will be subject to less strict controls. In order to accommodate the move, both regulatory regimes were substantially modified by the new rules and the entire process
was kicked off by transferring certain aircraft parts and engines, effective in 180 days, to be followed by additional transfers in coming months.
The impact will be profound on aerospace and defense companies. But there will be a ripple
effect on the commercial sector as well, particularly companies in the electronics, chemical,
satellite and military vehicle sector.
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