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Satellites, electronics next in U.S. export control reform

By Andrea Shalal-Esa

WASHINGTON (Reuters) - The U.S. government is making "great strides" in its drive to reform unwieldy export rules, and expects to unveil proposed changes covering exports of satellites, electronics and chemicals this year, a senior White House official said Tuesday.

Caroline Atkinson, deputy national security adviser for international economics, said an inter-agency working group had already modified regulations for 13 of 21 categories on the U.S. Munitions list, which together account for about $80 billion in U.S. exports and support about 450,000 U.S. jobs.

The items already addressed include aircraft, explosives, gas turbine engines, missiles and military vehicles - accounting for about 90 percent of all export licenses.

This year, the U.S. government aimed to finish rewriting the munitions list, expand the capacity of a multi-agency enforcement center, and create a single licensing database for companies seeking to export goods, Atkinson told an event hosted by the Center for Strategic and International Studies.

She said the group also planned to tackle export issues associated with encryption, cloud computing and cybersecurity, and sort out definitions for terms such as "public domain."

The Obama administration last year announced the first of a series of changes aimed at simplifying export licensing requirements for less sensitive items and building better protections for the most critical technologies.

U.S. companies have long clamored for a streamlined export control process, arguing that slow processing of export licenses have cost them billions of dollars in lost sales that have gone to foreign suppliers.

"Export control reform remains a priority for the president," Atkinson said, adding that the concerted efforts under way across the government were aimed at improving both U.S. national security and economic security.

Tom Kelly, acting assistant secretary of state for political military affairs, stressed that items formerly on the lists of controlled weapons were still subject to oversight and controls under the Commerce Department's list.

"Our goal at the end of the day is an agile, dynamic export control regime that is responsive to today's and tomorrow's national security and foreign policy challenges," Kelly said. "These new controls are going to reduce bureaucracy, they are going to accelerate goods to market for close allies and security partners, and they're still going to maintain a very high level of scrutiny over arms exports."

Tim Hoffman, deputy director of the Defense Technology Security Administration, the Pentagon office that oversees technology security policies, told the event the various agencies involved in the effort were working together better than ever and finding increasing "convergence" on issues.

The Defense and State departments were already using the same computer system, and would soon be joined by the Commerce Department, which would give all three agencies a "common operating picture" as they addressed export control issues.

Once work was completed on the munitions lists, the agencies involved would work on building a single portal for companies to use when requesting permission to export items.

Kevin Wolf, assistant commerce secretary for export administration, told the event that he and other government officials were working hard to explain the changes to industry, and to understand and correct any issues that arose.

He said the government expected to publish proposed changes for satellite exports this spring, followed by modifications for exports of electronic equipment in the early summer.

He said while some satellite exports would be eased by shifting them off the munitions list, restrictions would remain in effect for commercial spaceflight, which remains governed by the Missile Technology Control Regime (MCTR), a voluntary set of controls established in 1987 to avoid proliferation of nuclear, chemical and biological weapons.

Wolf said U.S. officials were aware of industry's concerns about excessive restrictions on exports of unmanned planes, the largest of which are also covered by the MCTR, but had not yet tackled that issue in any great detail.

(Editing by Ken Wills)

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