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Author Information

Christopher Stagg was a senior member of the policy and commodity jurisdiction sections at DDTC from August 2010 to September 2013.

At DDTC, he was also the deputy lead on Export Control Reform where his responsibilities included reviewing public comments, revising the U.S. Munitions List, and updating key aspects of the ITAR.

Mr. Stagg provides strategic and practical legal counsel to clients on export control laws, including the impact under Export Control Reform.

Contact Information

Christopher B. Stagg
Stagg P.C.
521 Fifth Avenue
17th Floor
New York, NY 10175
D: (212) 518-4854
F: (888) 824-3015
[email protected]

 

CLIENT ALERT

Influencing Export Control Reform: Preparing Effective Public Comments for the Next Tranche of Proposed Rules

Christopher B. Stagg   December 1, 2014

Summary

The public comment period is the primary and only direct means of influencing the regulatory revisions to the ITAR and EAR, including to the U.S. Munitions List and Commerce Control List. It is important for companies to submit public comments to advocate their interests, and it is equally important that these comments have the power to persuade the government. This is especially the case when the government audience is not just the Department of State, but also includes the Departments of Commerce and Defense.

It is critical then for companies to prepare effective and persuasive public comments that are positioned to advocate their interests and protect against consequences not anticipated by the regulatory drafters. Christopher Stagg can advise your company on how to use this process to advocate its interests to the U.S. Government. Mr. Stagg can also advise companies on what they can do if they have missed the opportunity to comment on a proposed rule and the rule is already or about to go into effect.

Introduction

One of the most overlooked aspects of Export Control Reform is the opportunity for companies to provide feedback to the government through public comments when a proposed rule is issued by DDTC or BIS. It is important that those affected by these proposals understand the public comment process and participate by advocating their positions to the government when the rules could materially affect their interests.

As a former member of DDTC who was responsible for reviewing the public comments for Export Control Reform and preparing them for interagency consideration, I can attest to the value placed on public comments by the drafters. This is demonstrated by the many changes to proposed rules that the government accepted based on the concerns raised by commenting parties.

The failure to provide persuasive public comments, and the opportunity to be heard by DDTC or BIS, can have significant consequences. Those parties who have an interest in the outcome of a proposed rule should always actively participate through this method. It is the primary and only direct means of influencing the regulatory revisions to the ITAR and EAR. The alternative methods for seeking change after the time for comments has passed are more difficult.

Companies should also use this opportunity to signal support for a proposed rule. The reason to do so is because other commenting parties may strongly disagree with the government's proposed course of action. In the absence of noted support, the government may agree with those who did provide comments. Consequently, this could materially affect a company’s interests and it would not be realized until the final rule is issued - and then the company faces an uphill battle to get the government to reverse course.

Although fifteen of the twenty-one U.S. Munitions List categories have been revised under Export Control Reform, the six remaining categories are all significant control areas. These category revisions will affect emerging technologies, fundamental research, and areas where the distinction between commercial and military applications is not clear. These remaining categories are:

Category I: Firearms
Category II: Artillery
Category III: Ammunition
Category XII: Fire Control/Sensors/Night Vision
Category XIV: Toxicological Agents
Category XVIII: Directed Energy Weapons

In addition, DDTC and BIS are still considering harmonized definitions of key terms that are outside of the controlled lists but will have a material impact on regulated parties. These include finalized or proposed definitions for "defense services" and "technical data" (and presumably for "public domain" and "fundamental research"), as well as other possible new or revised definitions such as for cloud computing. The government may also seek public comments on rules that have already gone into effect involving other categories.

Although these six categories and other key regulations have yet to receive proposed rules from DDTC and BIS, it is important that a company take this time now to review where it is under the ITAR today and to start analyzing what results it would like from any final rule. When the proposed rule is issued for public review, a company should carefully analyze its intended and unintended consequences to the company and if any of the provisions are unclear. Then the company should prepare public comments to provide the government with the necessary feedback.

Again, the use of the public comment process is of vital importance as it is often the sole means to advocate a company's position to the government - either by supporting what the government is proposing or argue against the proposed action.

How We Help

Our firm can advise your company on how to use the public comment process to advocate its interests to the U.S. Government. In particular:

  • We write persuasive public comments to proposed rules concerning the ITAR and EAR, including the U.S. Munitions List and Commerce Control List.

  • We advise companies on the government's likely objections to its proposed alternative, and we offer ways to potentially overcome these objections.

  • We review how the proposed rule will affect the company, including other related proposed or final rules that may impact the client.

  • We counsel companies on how the government reviews the public comments and the government's key interests to provide sound positions by the client.

  • We balance the detail that is sometimes required to make the client’s argument by not disclosing proprietary information, as the public comments are made publicly available.

  • We advise companies on what they can do if they have missed the opportunity to comment on a proposed rule and the rule is about to go final or is final.

For further information, please contact Christopher Stagg at (212) 518-4854.

 

 
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