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SPIE Professional July 2015

Proposed changes to US export rules to impact global photonics industry

By Jennifer Douris

graphic for ITAR article

The stakes are high for the global optics and photonics industry as the US considers new regulations on the export of technologies and commodities covered by the International Traffic in Arms Regulations (ITAR).

A 60-day public comment period on proposed changes to Category XII of the US Munitions List (USML), which could affect non-military uses of photonics products and technologies everywhere, is scheduled to end 6 July.

It is important that all businesses review the proposed changes carefully because they contain many provisions that could hamper global competitiveness of US industry now and in the years to come. The proposal could also impact imports by non-military suppliers outside the US.

The proposed regulations govern certain cameras, range-finder systems, detectors, and other optical components and software and have broad implications for manufacturers, exporters, and research universities both inside and outside the US.

The rewrite of Category XII is part of a general overhaul of the US export control system, called Export Control Reform (ECR), that the Obama administration initiated in 2009. Most of the other export control categories have already been addressed. The administration saved Category XII for last due to its complexity and importance to both industry and the military.

The ECR initiative was launched with the express purpose of focusing government enforcement resources on protecting the most significant military technologies and reducing controls on less significant technologies; i.e., building “higher walls” around fewer items. The ECR was also aimed at strengthening the US industrial base by reducing incentives for non-US companies to avoid using US products that come with ITAR restrictions. Furthermore, ECR was meant to clarify and simplify export control regulations, reducing redundancies and ambiguity.


The proposed changes for Category XII deviate greatly from these core principles. The proposal, published in the Federal Register 5 May, is far more complex and expansive than the commodities controlled under the current Category XII. More importantly, the proposal does not properly recognize the non-US availability of many of the commodities that it proposes to control.

Commercial markets dominate sales of many technologies described in the Category XII proposal. For example, there are at least nine companies located in seven countries outside the US that manufacture uncooled infrared detectors. The governments of all of those countries control those items as commercial/dual-use.

By controlling these items as ITAR, the US government ensures that foreign industry will continue to grow while US industry is effectively hampered from competing in the global marketplace. Ultimately, a reduction of the industrial base in the US is a national security issue.

Companies everywhere that make dual-use products deemed to fall under the proposed Category XII could find themselves at a disadvantage in the global marketplace. For example, manufacturers of medical equipment that includes advanced focal-plane-array detectors may encounter export or import problems.

Companies outside the US who sell primarily in their “local” markets may think they won’t be affected by the proposed rules. However, in today’s world, all markets are global; exclusion from the US market or added overhead to participate in a major part of the market will act as an economic deterrent for these and other companies to use some advanced technologies.


Moreover, the Category XII proposal defines performance parameters for items on the list that are not unique to military applications. Instead, the performance parameters listed are either at the edge of or intruding on today’s commercial market.

Performance parameters that specify wavelengths, pixel counts, and maximum radiant sensitivity, for instance, will be used to determine whether the technologies or goods are included on the USML.

This approach is troublesome, given rapid advances in technology and performance improvements of the items covered by Category XII and the extremely slow and difficult process of changing US regulations.

In addition, placing limitations on the performance of goods and technologies that might have a dual use is a disincentive for US companies to invest in emerging technologies that might require exceeding those parameters.


A solution to many of the problems in the proposal for Category XII is to fully apply the “specially designed” criteria (defined in section 120.41 of the USML) to the commodities and components listed, and to align that list with the Wassenaar Arrangement to ensure equal footing with US allies. The US and 40 other countries are signatories to the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-use Goods and Technologies, which has its own munitions list.

One goal of the ECR was to create a regulatory definition of “specially designed” under both the USML and the Department of Commerce Control List (CCL) to streamline the decision on whether an item is “specially designed” for the military and thus subject to ITAR controls. The US departments of Defense and Commerce agreed on a common definition in October 2013. The definition, when applied, would release commodities that are in commercial use from Category XII and place them on the CCL where they would be treated as dual-use items.

This approach would also eliminate the need to establish specific performance parameters on these items.

Many of the commodities and components the USML proposes to control would more appropriately be placed on the CCL. Though still controlled under Commerce, the CCL allows for more flexibility on how export controls are applied and can adjust to conditions more quickly than the USML.


It is likely that an interim proposed rule will be published before the rules for Category XII are finalized. That would allow for a second chance for companies to comment on the changes.

Nonetheless, the real opportunity for photonics companies to express their opinions on the proposed changes is now.

Get involved with or learn more about export controls with these resources from SPIE. These include links to the proposed rules, sample comment letters, and press releases about how the proposed export rules will affect the optics and photonics industry.

Jennifer Douris is government affairs director at SPIE

–Jennifer Douris
is government affairs director at SPIE and a member of the Sensors and Instrumentation Technical Advisory Committee (SITAC) within the US Department of Commerce.



DOI: 10.1117/2.4201507.24

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