The 600 Series is Coming!

IntroductionMajor reforms are officially under way in the United States export control system.  Many items that were considered Military in nature, and thus subject to stringent controls, will soon be re-classified.  The aim of the reform is to move less significant Military items from State Department control to the Commerce Department where they will be subject to more liberal controls.  These items, newly labelled as the ‘600’ series, could result in easier exporting for you!  The details were announced today (April 15th, 2013) and the changes will take effect on October 15th, 2013.

What does this mean to me? If you produce goods or technologies that are currently on the US Military List, and are thus controlled by the International Traffic in Arms Regulations (ITAR), these changes will apply to you.  Such items currently controlled under the ITAR will need to be reclassified.  In addition to items moving to Commerce department control, the ITAR Categories are being re-written and you will need to ensure that you have the correct classification for your goods.

How can I classify my goods? By following the State and Commerce department websites, and the site set up specifically for Export Control Reform (http://export.gov/ecr/) you can read about the changes and their implementation.  If you need assistance in re-classifying any of your goods, CTP Inc. has a team of experts who can assist you with this process.

What if my goods move to Commerce Department control under the 600 Series?  This may be good news for you.  Your items will still be under export control but will be listed under the Export Administration Regulations (EAR) rather than ITAR.  The EAR has some relaxations that are not available under the ITAR and you may be able to export your goods under a license exception or other expedited processes.  However, if you have always dealt with the State Department under ITAR, you will now need to understand the processes used by the Commerce department.  Several CTP employees are former BIS experts, so we are familiar with the DOC system and can guide you through in the most effective way.

I have already exported  goods to Europe.  How can I deal with these?  The extra-territorial nature of the ITAR controls means that goods sent abroad will still come under ITAR controls for re-transfer.  It is important that these goods are also re-classified as it may mean that these controls can be relaxed.  The pending changes to the U.S. legislation will have an impact worldwide and it is important that U.S. exporters or multinationals quickly re-assess their inventories in third countries.  Within Europe, CTP works with Interexport Management Systems Ltd (IMS) who are experts on classifications within the EU region.  IMS will guide you through the ‘600’ series changes while also advising on existing EU legislation.  Remember that a U.S. Military item that is moved to the ‘600’ series will still be considered as a Military item in most other countries in the world.  IMS– with its experts in the UK, Germany, Holland and Estonia–can advise you on the classification of your goods under different legislation.

Where can I get more information?  The State and Commerce departments are keeping U.S. Industry informed through their websites as these changes unfold.  For more specific advice and services, call Rick Phipps to discuss your compliance situation.

Phone: 1-703-683-5806; rphipps@ctp-inc.com.