SHAHEEN WELCOMES PROGRESS ON EXPORT CONTROL REFORM

New export control framework will strengthen national security and increase business competitiveness

August 31, 2010

(Washington, D.C.)-U.S. Senator Jeanne Shaheen, a member of the Senate Foreign Relations Committee and the Committee on Small Business and Entrepreneurship , today issued the below statement regarding the Obama Administration's efforts to reform the nation's export control system.  The new approach announced today by President Obama will simplify the complex export control system and improve its effectiveness for America's defense industries:

"I welcome the White House's efforts to move forward on a new framework for our country's export control system," said Shaheen.  "This move is a good first step to strengthen U.S. national security and increase the competitiveness of American defense-related businesses.  I look forward to working with my colleagues in Congress to reform the outdated export control system and put in place a system engineered for the 21st century that will better protect our nation's security and help small and medium-sized businesses compete in new markets abroad."

Senator Shaheen wrote in March 2010 to the Departments of State, Commerce, and Defense calling for increased coordination on export controls, clearer lines of jurisdiction, and increased outreach and support for businesses.   In that letter, Senator Shaheen voiced support for export control reform as "critical to strengthening our national security, maintaining our military superiority, preserving America's defense industrial base, and ensuring our economic competitiveness." 

According to the White House, the new changes announced today will reduce ambiguity, confusion and jurisdictional disputes that have plagued the export control system in recent years.  Senator Shaheen's full letter appears below.

March 26, 2010

The Hon. Ellen Tauscher

Under Secretary of State for Arms Control and International Security Affairs

U.S. Department of State

Washington, D.C. 20520

The Hon. Daniel Hill

Acting Under Secretary for Industry and Security

U.S. Department of Commerce

Washington, DC 20230

The Hon. Michele Flournoy

Under Secretary of Defense for Policy

U.S. Department of Defense

Washington, DC 20301

CC:  General James L. Jones, Jr., USMC (Ret)

         Assistant to the President for National Security Affairs

Dear Under Secretaries Tauscher, Hill, and Flournoy:

I write today to express my support for this Administration's commitment to review and reform our nation's export control system and to encourage you to improve interagency coordination, increase outreach for American businesses, regularly assess system effectiveness, and continue improving licensing efficiency as you consider new policies and programs to implement this export control reform agenda. 

I share the Administration's view that reviewing and reforming our export control regime is critical to strengthening our national security, maintaining our military superiority, preserving America's defense industrial base, and ensuring our economic competitiveness. 

Our current export control system is a confusing, complex, and outdated set of laws, regulations, and processes designed decades ago for a Cold War environment.  This antiquated system can lead to serious security vulnerabilities and unnecessary barriers to enhancing business and trade interests. 

In 2007, the Government Accountability Office (GAO) designated the protection of critical technologies as a government-wide risk area and called for a strategic reexamination of existing export control and other programs.  More recent GAO reports contend that the export control system "may be ill-equipped to overcome challenges in the current security environment."  In addition, poor government coordination, unclear jurisdictional lines, licensing inefficiencies, and outdated control lists have resulted in overly burdensome and unnecessary obstacles for many American defense-related businesses. 

A comprehensive reexamination of the current export control regime is long overdue, and I applaud this Administration for taking on this challenge.  It is my understanding that in the coming weeks, the Administration will outline its export control reform agenda.  As the various government agencies begin considering programs, policies, and regulations to implement these new efforts, I urge you to address four key ongoing challenges for our export control system:

1)       Poor coordination and unclear jurisdictions hamper effective controls and create unnecessary confusion for American businesses.  Our current export control system is controlled by multiple departments and agencies with differing objectives and priorities.  This has led to divergent regulatory interpretations and jurisdictional disagreements over which department controls certain items.  As GAO noted in June 2009 testimony, this "increases the risk that critical items will be exported without the appropriate review and resulting protections" and creates an "unlevel playing field" for businesses unfamiliar with the intricacies of export controls.  Better inter-agency coordination and clear lines of jurisdiction can have positive security and economic benefits.

2)       A lack of outreach, support and information-sharing for America's small and medium-sized defense-related businesses harms export opportunities.  We need to do more to assist American businesses in navigating our complex export control system. As the Administration works toward the President's goal of doubling exports in the next five years, small- and medium-sized exporters will play a key role in meeting that objective; however, these businesses often do not have the capacity or resources to take on the additional challenge of becoming experts on export control processes.  We should do more to reach out and help de-mystify the export process for our defense-related small- and medium-sized businesses. 

3)       Government agencies do not regularly assess priorities and the overall effectiveness of our export control programs.  As GAO notes, "To be able to adapt to 21st Century challenges, federal programs need to systematically reassess priorities and approaches and determine what corrective actions may be needed to fulfill their missions." State and Commerce do not have a vehicle for assessing and reassessing priorities and effectiveness.  Regular program assessments are critical for ensuring that the system is working.     

 

4)       License processing times and delays can frustrate many competitive companies wishing to do legal business overseas.  Export license application reviews are critical for ensuring national security interests.  In recent years, the State Department has undertaken important efforts to reduce licensing backlogs and processing times, and significant progress has been made.  We need to maintain focus on reducing unnecessary delays and burdensome application processes without diminishing our security.   

In the coming months, I look forward to working with this Administration and Congress as we attempt to develop a 21st century export control system that keeps Americans safe and helps our businesses remain competitive in a rapidly changing environment. 

Sincerely,

Jeanne Shaheen

U.S. Senator

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