On July 28, 2016, the Department of Commerce’s Bureau of Industry and Security (BIS) and the Department of State’s Directorate of Defense Trade Controls (DDTC) issued final rules implementing revisions to U.S. export controls on toxicological agents and directed energy weapons. Specifically, BIS’ final rule describes how articles that the President has determined no longer warrant control under U.S. Munitions List (USML) Category XIV (toxicological agents) and Category XVIII (directed energy weapons) are now controlled under the Export Administration Regulations’ (EAR) Commerce Control List (CCL), while the DDTC’s final rule accordingly amends the International Traffic in Arms Regulations (ITAR) to revise corresponding USML Categories XIV and XVIII. These revisions, part of the Administration’s Export Control Reform initiative, were undertaken to more accurately describe the articles in the subject categories, as well as to establish a “bright line” between the USML and the CCL for the control of these articles.

Toxicological Agents

Revised USML Category XIV broadly controls chemical and biological agents and associated equipment. DDTC’s final rule provides that the ITAR will only control “Tier 1” pathogens and toxins established in the Department of Health and Human Services’ and the Department of Agriculture’s select agent regulations that meet certain capabilities. Further, revised USML Category XIV enumerates other items that are ITAR-controlled, such as chemical warfare agents adapted for use in war; antibodies, recombinant protective antigens, polynucleotides, biopolymers or biocatalysts exclusively funded by a Department of Defense contract for detection of listed biological agents; and certain vaccines funded exclusively by a Department of Defense contract. In response to industry requests to be able to use a Department of State license to export shipments that have a mix of ITAR- and EAR-controlled items, and as with previous revisions of other USML categories, new paragraph (x) has been added to USML Category XIV to allow an EAR item to be licensed under the ITAR if the item is used in or with a defense article controlled under USML Category XIV and is described in the purchase documentation submitted with the ITAR application.

In parallel, BIS’ final rule created a new set of “600 series” Export Control Classification Numbers (ECCNs) in CCL Category 1, specifically 1A607, 1B607, 1C607, 1D607 and 1E607, to cover the toxicological items shifting from control under the ITAR to the EAR. Military detection and protection equipment for toxicological agents, tear gases, riot agents and agents and materials for the detection and decontamination of chemical warfare agents, among other items, will be moved to the CCL.

Directed Energy Weapons

In addition to the changes to USML Category XIV applicable to toxicological agents, the final rules revise the export controls on directed energy weapons. The revisions to USML Category XVIII limit ITAR’s controls to only specific articles that have certain non-acoustic technique direct energy impacts other than as a result of incidental, accidental or collateral effects. Certain tooling and production equipment, test and evaluation equipment and test models for directed energy weapons will be EAR-controlled under a new set of ECCNs, specifically 6B619, 6D619 and 6E619. The new ECCNs will also control specially designed software as well as related technology.

The BIS and DDTC final rules will take effect on December 31, 2016. Companies subject to U.S. export controls should take this opportunity to review their products, software and technologies to determine whether the jurisdiction (i.e., State or Commerce) of such items is still accurate. Companies should work with their vendors and customers to ensure that items are properly classified. If a company is unable to determine an item’s jurisdiction and/or classification, the company should seek assistance from qualified counsel or formal guidance from BIS and DDTC, as appropriate. These changes, as well as others resulting from the Administration’s broader Export Control Reform initiative, allow for greater flexibility inherent in the EAR for those items that are moving to the EAR from the ITAR, and companies would be wise to take advantage of such flexibility when applicable.