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Hill Balks At Arms Export Agency

For the first time since the Clinton administration, the Obama White House urgently wishes to change the arms export control regime, loathed by allies and disliked by the U.S. defense industry.

Jim Jones, President Obama's national security advisor, outlined the major changes to the regime on Capitol Hill today at a lunch of the Senate Aerospace Caucus organized by the Aerospace Industries Association.

The biggest news to come out of the administration’s revamp is a tiered U.S Munitions List. The list governs what equipment companies must submit arms export licenses for to the State Department.

Jones announced that the administration has "developed independent objective criteria to create a tiered control list structure, with the 'crown jewels' and WMD in the top tier and then cascading down the tiers as the technology or product life cycle matures," he said. Industry and senior defense officials have long supported such an approach. Stealth technologies, many algorithms and heaps of highly classified weapons technologies would constitute the crown jewels.

Jones said the tiered approach "has several clear advantages" such as the ability "to quickly add new items and technologies" and, perhaps as important, the ability to remove them "as technologies age and are no longer in need of being controlled. “You may be surprised to learn that, as part of our review, we uncovered a copy of the very first Munitions List, dated 1935, that includes military railway trains. What may surprise you even more is that these trains remain on the Munitions List today."

But the administration's plans may founder on its desire to create a single new executive agency charged with overseeing both dual-use and military equipment that American companies want to sell overseas.

"For the Single Licensing Agency, as we’re calling it, the Administration supports the creation of an independent entity, governed by a Board of Directors comprised of the Cabinet officials of the current departments with export control responsibilities, which reports to the President. We anticipate that leadership of the SLA would be nominated by the President, with the advice and consent of the Senate," Jones said. He added that "it is critical that the leaders in the Administration, the Congress, and industry work together to make it happen."

That may not happen. A congressional source who knows arms export issues reacted this way when asked about the prospects for legislation that would be needed to get things moving:  "Not good.  It's a massive change for a single agency, and rationale has not yet been provided."

The main reason for congressional caution are memories of what many people believe was the disastrous result of the creation of the Department of Homeland Security, this source said. While the new agency would constitute several hundred people from the State and Commerce departments, perhaps supplemented by personnel from the Pentagon's Defense Technology Security Administration.

But the Aerospace Industries Association's Remy Nathan, who leads their efforts on arms export reform, said the Munitions List news was paramount and described how it might work. Under the current system, anything that is meant to be used on anything used by the military would be placed on the Munitions List. Jones offered the example of a screw on an F-18 If the screw "holds together things and doesn't enhance capability" it would probably get moved to the Department of Commerce's dual use arms export list, Remy said. On the other hand, if "this is a very high performance screw critical to a military item it would stay on the list, but" as it would probably be a tier-three technology, that would probably mean it could be sold to NATO allies and a company would not have to get permission from the State Department each time it wanted to export some screws, as happens under the current system.

And the administration is making a raft of other changes to the arms export system. "One item on which we have made significant progress is the development of a single application form that would be used by all three licensing agencies. While this may seem mundane, it will be a significant improvement for U.S. exporters and an important early step in developing our single IT system," Jones said.

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