Whether the President’s reelection makes you rejoice or tear out your hair, one thing is certain. With the election behind us, the biggest changes to export controls in a generation are about to become a reality.

The Administration launched export control reform in 2009 with great fanfare. By 2012, many thought it had run out of gas. Going into an election year, visible progress was hard to see from the outside, but unpublished regulations continued to stack up. Since the election, OMB has published three of the more than 20 regulations sitting in the hopper. The rest will follow as soon as there is space available in the Federal Register.

The reform plan drafted by the National Security Council, of which I was an author, has a three phase approach. Phase 1 changed policies, which could be done with a minimum of formal process. Phase 2 was to streamline and harmonize the different agencies’ regulations, including a complete rewrite of the control lists. It was huge task which required thousands of man hours, but will be largely complete when the current backlog becomes final rules. Phase 3 involves statutory changes, merging agencies and the control lists, and is still to come.

“With the election behind us, the biggest changes to export controls in a generation are about to become a reality.”

Phase 1 has already had significant impact – albeit mostly behind the scenes. Consider enforcement. A large group of law enforcement agencies (FBI, ICE, OEE, DoD IG, etc.) investigate export control violations, and it was common for multiple agencies to investigate the same matter without talking to each other. Sometimes this blew cases by exposing another agency’s investigation, and there is no telling how many cases were never solved because information wasn’t shared. So Immigration and Customs Enforcement established the Export Enforcement Coordination Center (E2C2), where the agencies pool resources. Since E2C2 opened, in 60 percent of the enforcement cases some other agency had relevant information that had been independently developed. This new level of coordination is hugely important in allowing the government to effectively prosecute export violations. This and numerous other parts of Phase 1 are now essentially complete.

The regulatory push since the election marks the beginning of the end of Phase 2. Leaving the statutory authorities of the agencies intact, the goal is the most comprehensive rewrite of export control regulations in a generation. In the first half of 2013, if all goes according to plan, entirely reworked control lists and new procedures are going live. Even if the Administration runs into unforeseen opposition that prevents it from completing Phase 3, Phase 2 is now pretty much a given. Industry needs to prepare for a rapidly changing regulatory environment starting now.

“In the first half of 2013, if all goes according to plan, entirely reworked control lists and new procedures are going live.”

Companies that are positioned to take advantage of the new system will have a strategic advantage. Those that don’t plan may find their operations disrupted. If your company’s business involves products or services that are regulated for export:

  1. Secure current operations. Carefully assess proposed rules that will define the controls impacting your company, including the impact on outstanding export authorizations, and jurisdiction and classification determinations. As jurisdiction for large numbers of items transfers from one agency to another, careful planning will prevent significantly disruptive surprises.
  2. Prepare for new opportunities. Coming changes will streamline access to many existing markets, and open entirely new ones. The biggest advantage will go to the first movers.
  3. Come clean. Enhanced enforcement means lingering problems are more likely to bite. Voluntary disclosure of past violations will put them behind you with the greatest likelihood of reducing or eliminating penalties.

The new system won’t be nirvana, but it will be a lot better than what we have now. Get ready!

This article originally appeared in International Trade Magazine.