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4 Column Emplate Classification Classification Departments of State and Commerce issue proposed revisions to rules on the export of firearms and ammunition A change in jurisdictional control over the export of many firearms, ammunition, and related parts and technology from State to Commerce will likely bring both benefits and challenges for business, write David A. Ring, Jared Clark and Matt Cvercko. n 24 May 2018, the civilian use. If the proposed rules are jurisdiction and classification determ - departments of State and adopted, US businesses exporting inations, US exporters must follow the O Commerce jointly unveiled products affected by the changes will USML and CCL ‘orders of review’ to long-anticipated proposals to need to initiate top-to-bottom reclassify their products as necessary. streamline the nation’s export laws as reclassification procedures to ensure The table below summarises some part of the US government’s ongoing that they are in compliance with the of the most significant classification Export Control Reform (‘ECR’) new regulations. As with all export changes under the proposed rules. initiative. The proposed rules, published in the Federal Register at 83 Items transitioning to the CCL Items remaining on the USML FR 24198 (State) and 83 FR 24166 (Commerce), would shift jurisdictional Non-automatic and semi-automatic firearms Fully automatic firearms; firearms firing control and licensing authority over the (other than shotguns) with a caliber of less caseless ammunition; fully automatic shotguns; export of many firearms, ammunition, than or equal to .50 inches; and non-automatic firearms specially designed to integrate fire and related parts and technology from and non-semi-automatic rifles, carbines, control, automatic tracking, or automatic firing revolvers, and pistols with a caliber greater systems; and parts and components specially the Department of State to the than .50 inches but not greater than .72 inches designed to convert a semi-automatic firearm Department of Commerce. to a fully automatic firearm Specifically, the changes would affect defence articles currently Antique guns and armament (manufactured Guns and armament with a caliber greater than enumerated on the State Department’s between 1890 and 1919); BB guns; pellet .50 inches, including howitzers, artillery, rifles; paint ball guns; and air rifles cannons, mortars, recoilless rifles, grenade United States Munitions List (‘USML’) launchers, and developmental guns funded by Category I (Firearms, Close Assault the Department of Defense Weapons and Combat Shotguns), Category II (Guns and Armament), and Detachable magazines with a capacity of Magazines for firearms with a caliber of .50 greater than 16 rounds but less than 50 inches or greater with a capacity of greater than Category III (Ammunition and rounds specially designed for the firearms 50 rounds Ordnance). The articles removed from described above the USML would be listed on the Commerce Department’s Commerce Riflescopes without night vision or infrared Riflescopes with night vision or infrared Control List (‘CCL’) and subject to the capabilities capabilities Commerce Department’s Export Flash suppressors Silencers, mufflers, and sound suppressors Administration Regulations (‘EAR’), rather than the State Department’s Barrels, receivers (frames), bolts, bolt carriers, Barrels, receivers (frames), bolts, bolt carriers, International Traffic in Arms triggers, hammers, pistol grips, and sears slides, and sears specially designed for articles specially designed for the firearms described remaining listed on the USML Regulations (‘ITAR’). above The proposed reforms, while intended to reduce regulatory burdens Flame throwers with an effective range of less Flame throwers with a minimum effective range on US businesses dealing in firearms than 20 meters of 20 meters and related commodities, also raise Ammunition for small arms (generally those Ammunition: (a) for the firearms described new considerations and challenges for with a caliber of less than or equal to .50 above; (b) with little or no civil use, or that is US exporters and their domestic and inches) and ammunition for firearms not inherently military, such as ammunition foreign supply chain partners. specifically listed in USML Category III preassembled into links or belts, caseless ammunition, projectiles with a hardened tip or core, and explosive projectiles; and (c) Product reclassification specifically listed USML in Category III The departments of State and Commerce proposed the revisions to Technology required for the development, Technical data and defense services directly USML Categories I-III for the purpose production, operation, installation, related to the articles described above of establishing a brighter line between maintenance, repair, or overhaul of the items described above defence articles and items common to 1 World ECR www.worldecr.com Classification Classification Brokering subject to the ITAR’s brokering (‘EEI’) in the Automated Export The Department of State imposes requirements or whether their System (‘AES’). The export clearance registration, reporting, and export activities are covered by the carve-out requirements would apply to exports licensing obligations on companies discussed above. It is critical that of all such firearms, including and individuals who engage in certain businesses make the correct temporary exports, regardless of value ‘brokering activities’ related to defence determination, as violations of or destination. To assist US law articles or services listed on the USML, enforcement officials in verifying that as does the Department of Justice’s The proposed reforms, such exports are authorised and Bureau of Alcohol, Tobacco, Firearms conform to the export clearance and Explosives (‘ATF’) with regard to while intended to reduce procedure, the proposed rules would items listed on the United States regulatory burdens on increase the amount of information Munitions Import List (‘USMIL’). required in AES filing for these items Under the ITAR, such ‘brokering US businesses dealing in to include serial numbers, make, activities’ generally include any action firearms and related model and calibre. taken on behalf of another to facilitate The proposed rules would also the manufacture, export, permanent commodities, also raise amend the EAR’s record-keeping import, transfer, reexport, or new considerations and requirements in two ways: first, with retransfer of defence articles or challenges for US regard to many firearms and shotguns, services controlled by the USML the exporter or any other ‘party to the and/or USMIL. exporters and their transaction’ that creates or receives the The proposed regulatory reforms domestic and foreign EAR-required record – including the include ‘conforming changes’ to the serial number, make, model, and ITAR’s brokering provisions, clarifying supply chain partners. calibre of the export – would be the that certain defence articles would person responsible for retaining the transition from the USML to the CCL brokering regulations can result in records; second, the proposed rules but still remain listed on the USMIL – civil and criminal fines, denial of would narrow the scope of an EAR and thus continue to be subject to the export privileges, and even record-keeping exemption regarding ITAR’s brokering requirements. imprisonment. warranty certificates, requiring However, in another conforming exporters to maintain such certificates change, the proposed rules explicitly Firearms training and ‘Defense when issued for many firearms and carve-out from the ITAR’s list of Services’ shotguns. activities triggering brokering The State Department requires requirements those activities that authorisation under the ITAR to Entry clearance process for facilitate the export, reexport, or provide ‘defense services’, which are temporary imports transfer of an item subject to the EAR defined to include training or Under the proposed rules, the EAR that has been approved pursuant to a instructing foreign persons in the use would regulate temporary imports into licence or licence exception under the or operation of defence articles. In the US of firearms, ammunition, and EAR, or a licence or other approval contrast, as the proposed rules state, other items previously under the under the ITAR. 1 This carve-out may ‘[t]he EAR does not include a concept jurisdiction of the Department of provide relief to companies engaged in of “defense services,” and the State. Although the temporarily brokering activities related to the “technology” related controls are more imported items would now be listed on export or transfer of items that narrowly focused and apply in limited the CCL, some of these items would transition from the USML to CCL but contexts as compared to the ITAR.’ remain on the USMIL, the ATF’s remain on the USMIL; however, Therefore, under the proposed control list for permanent imports; the companies engaging in brokering rules, US persons providing training or proposed rules would establish a new activities related to the manufacture or instruction to foreign persons in the entry clearance process for such items permanent import of such items would use or operation of firearms that would so that US businesses would not need still be subject to brokering transition from the USML to the CCL to obtain temporary import requirements. would no longer need to obtain authorisation from two different If the proposed rules are adopted, authorisation to provide such training, government agencies.
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