On July 7, 2017, the US Department of Commerce’s Bureau of Industry and Security (“BIS”) published a final rule amending the Export Administration Regulations (“EAR”) based on the 2016 Missile Technology Control Regime (“MTCR”) plenary agreements. The MTCR is a multilateral export control regime designed to control the export of certain goods and technology that might contribute to a delivery system for weapons of mass destruction.  The 35 nations that are members of the regime voluntarily agree to guidelines and export restrictions developed under the MTCR and implement those controls through their respective national export control laws.

The changes adopted in the BIS rule are intended to integrate amendments made to the MTCR Annex at the October 2016 plenary meeting in Busan, South Korea and the March 2016 Technical Experts Meeting in Luxembourg City, Luxembourg. The rule also implements several additional changes designed to better conform the EAR to the MTCR Annex.  Many of these amendments are technical changes that do not alter the substantive meaning or scope of control of the EAR.  This advisory focuses only on the substantive changes adopted. 

Substantive Amendments to the EAR

ECCN 1C107, which controls certain graphite and ceramic materials, , is amended to control certain Ultra High Temperature Ceramic Composites (“UHTCCs”). UHTCCs consist of Ultra High Temperature Ceramics (“UHTCs”) made with fiber reinforcement.  Such composites are typically used in “leading edges for hypersonic vehicles, nose tips for re-entry vehicles, rocket motor throat inserts, jet vanes, and control surfaces.”  The final rule also adds a technical note providing examples of substances falling within UHTCs and a note explaining that UHTCs without fiber reinforcement are not controlled under ECCN 1C107.

ECCN 7A103, which controls certain instrumentation and navigation systems used in missiles, rockets, and unmanned aerial vehicles (“UAVs”), is amended to “make the control more precise and rule out items not strictly used for navigation purposes.” Specifically, the final rule defines “inertial measurement equipment and systems,” in the context of 7A103.a, as “incorporat[ing] accelerometers or gyros to measure changes in velocity and orientation in order to determine or maintain heading or position without requiring an external reference once aligned.”  The final rule also adds a note with an illustrative list of inertial measurement equipment and systems controlled in ECCN 7A103.

The final rule creates new ECCN 9B104, which controls “aerothermodynamic test facilities” used for certain rockets, missiles, and UAVs. The new ECCN was added “in order to fully cover the types of ground test facilities necessary to reproduce the flight environments that occur during the reentry phase.”  Aerothermodynamic test facilities are defined as including “plasma arc jet facilities and plasma wind tunnels for the study of thermal and mechanical effects of airflow on objects.”

Finally, ECCN 9D104, which controls software specially designed for the use of gas turbine engines, UAVs, turbojet and turbofan engines, and certain missile systems, is amended by adding a note clarifying that “specific software for the conversion of manned aircraft to an unmanned aerial vehicle” falls within the scope of the control.

Conclusion

The BIS final rule set out a large number of technical changes, and only made limited substantive changes as described above. BIS noted that it did not expect these amendments to result in a significant change in the number of license applications it receives.  Nonetheless, the changes should be noted, in particular by manufacturers of UHTCCs and companies in the avionics and aerospace industries.