Export Controls and National Security


Situation

U.S. export controls laws restrict the unlicensed export of sensitive, defense-related goods and services. In 2009, the Obama Administration launched a multi-phased initiative to revamp the nation’s export control regime with a principal focus on bolstering national security and enhancing the competitiveness of U.S.companies in the global marketplace. A major aspect of the reform effort was a rewrite of the U.S. Munitions List (USML)—the list of defense articles, services and related technology for which the export is controlled by the U.S. State Department.

For IPC, the global trade association for the electronic interconnect industry, a rewrite of US export controls posed both an opportunity and challenge. IPC had longstanding concerns that many defense contractors were mistakenly procuring printed circuit boards for sensitive defense technologies from foreign sources in violation of U.S.export control laws. The trade association saw an opportunity in the reform effort to clarify export controls on printed circuit boards. The challenge was to persuade the State Department that printed circuit boards for military electronics merited enumeration of the USML.

Protecting printed circuit boards for defense technologies is important because even the most basic boards revel sensitive information about the military electronics into which they are incorporated.


Strategy & Implementation

Working with IPC, we developed and implemented a two-pronged strategy. The first of these two prongs focused on clarifying current law. The timeframe for the USML rewrite was unclear and IPC saw an immediate need to prevent the unlicensed export of printed circuit boards and related technical data. A focus on current law also reaffirmed the need to establish clearer rules in the rewrite. We proposed to IPC that they unveil a new educational campaign, Follow the law, Protect the Board. As part of that campaign, IPC commissioned a white paper authored by one of the nation’s leading export control attorneys, engaged Executive and Legislative Branch officials, hosted educational seminars, and met with defense industry leaders.

The second prong of our strategy centered on influencing the rewrite of the USML. We met directly and frequently with export control officials at the State Department’s Directorate of Defense Trade Controls (DDTC), the Defense Department’s Defense Technology Security Administration (DTSA), and the Commerce Department’s Bureau of Industry and Security (BIS). We also provided in advance and in response to proposed rulemakings comments explaining the need to clarify the rules for printed circuit boards.

Separately, we cultivated champions on Capitol Hill who authored supportive letters to DDTC and posed questions to Executive Branch officials during congressional hearings and in staff-level meetings. In short, we made sure that the unlicensed export of printed circuit boards was an issue that federal policymakers needed to address during the USML rewrite.


Results

During our advocacy effort, we learned that DDTC was persuaded that the rules for printed circuit boards needed to be clarified and that they signaled their intent to do so in Category XI of the USML.

In July 2014, the U.S. Department of State issued a final rule for Category XI, that for the time ever, explicitly enumerates printed circuit boards specially designed for defense articles. Following release of the final rule, IPC worked closely with DDTC to educate the defense community about the enumeration and the national security imperative of safeguarding printed circuit boards for military electronics. Industry reports indicate that the enumeration has played a critical role in stemming the unlicensed export of defense-related printed circuit boards and technical data.