Your See Through Rule Blues

Q: What is all the fuss about this See-Through Rule?  A: Let’s pretend you are Export Compliance SuperPerson with x-ray vision that can see through, say, an aircraft engine. Your uncanny sight can distinguish USML (United States Munitions List)  classified parts from commercial parts.  Let’s say you see a USML nut and bolt in there, but all else is commercial. Under the current interpretation of the See Through Rule, Export SuperPerson must now consider the entire engine as being  under the USML jurisdiction.   Or maybe not? This is the puzzling mud-pit known as the “See Through Rule”. Some call it “ITAR Creep” because of its slow moving and, well, creepy quicksand nature.  It is when one bad ITAR apple spoils the whole bunch.  

Brilliant analogies aside, the Rule considers products to be on the USML list if any part or component in the commercial dual use item is on the USML. 

While tight export restrictions can be a good thing when it comes to protecting US technology from smarmy evildoers, industry, particularly the military industrial complex, is up in arms:  “globalization” efforts and sales of dual use equipment to China are frozen since, as we all know, USML parts or their related technology can’t be sent there. It is also more costly, or even impossible to outsource production or to even export ITAR-tainted products for sale to other countries. Not to mention all that infected stuff out there was previously exported in more carefree days.

Thus, the industry argues, it will lose out against foreign competitors who aren’t impeded by Cold War era ITAR restrictions. So industry is still pushing for clarification of the see-through rule but the State Department won’t give it up just yet. A Big Chill was sent though the aeronautics industry a few years back when Boeing was fined $15 million because a USML classified QRS-11 navigation chip was included in a commercial engine exported for sale to China. 

 The question is: just how far will the See Through Rule be applied?  If State decides that the See Through Rule applies to all things, then there are lots of export violations floating around this planet which will be a world of bureaucratic hurt for US exporters.   JR 

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