- The Washington Times - Wednesday, April 21, 2010

The Obama administration will create a new agency to approve export controls on sensitive military technologies as part of a larger effort to boost U.S. exports for the ailing economy.

Defense Secretary Robert M. Gates said in a speech Tuesday that the new export control system will unify enforcement and licensing, now split among several agencies, into what defense officials are calling the “four singles.”

The reforms will produce a single list of exports subject to new controls, one agency for licensing those exports, a separate enforcement agency to guard against illicit exports of technology, and a single information-technology network aimed at streamlining the licensing process.

The new reforms also seek to limit the number of exports currently subject to the highest regulatory scrutiny.

“Some people will be concerned that having fewer items subject to the most onerous export restrictions will make it easier for hostile states or groups to obtain weaponry and technology that potentially could be used against us,” Mr. Gates said in a speech to the group Business Executives for National Security.

“No system — above all, the current one — is foolproof,” he said. “but by consolidating most export licensing functions in one agency and creating an enforcement coordination agency, we can focus our energies and scrutiny on technologies that truly threaten American security, making it far less likely that these critical items will fall into the wrong hands.”

Mr. Gates’ announcement followed a National Intelligence Estimate produced earlier this year that concluded that the country’s 50-year-old export-control system posed a threat to national security, according to defense officials who briefed reporters Monday.

President Obama said in March that he wants to double U.S. exports in the next five years as part of an economic program to boost jobs. In his State of the Union address, the president promised to “reform export controls consistent with national security.”

In recent months, officials from the Pentagon have been working with relevant members of Congress on the possible reforms.

The new export-control reforms were welcomed by business groups eager to increase exports but elicited warnings of caution from national security specialists.

Gary Milhollin, director of the Wisconsin Project on Nuclear Arms Control, said the proposal to streamline export licensing favored arms makers.

“There seems to be an effort to consolidate authority over export controls to the place in the government most favorable to industry,” Mr. Milhollin said. “Anytime you create a special agency to do something where industry has a lot of money at stake, there is a risk that industry will take over the agency. Right now, the risk is lower because the authority is divided.”

Edward Timperlake, a specialist in protecting U.S. technology at the Pentagon during the George W. Bush administration, said “it is now up to Congress to specifically separate platitudes from reality.

Mr. Timperlake said congressional oversight is needed on the issue to “really straighten out export laws” so that they “always first safeguard America’s cutting-edge military technology.”

The administration has yet to choose whether the Defense Department, Commerce Department or State Department will host the new licensing agency.

Richard Perle, who as assistant secretary of defense was responsible for defense department export controls during the Reagan administration, said the ultimate home of the new licensing agency was extremely important.

“The most important question is where this new agency will be located,” he said. “The Commerce [Department] is eager to sell. They always want to sell. Some say the Defense Department is the opposite, but there are elements of Defense that want to sell almost as much as Commerce.”

Brad Sherman, California Democrat and chairman of the House Foreign Affairs Committee’s subcommittee with jurisdiction over export controls, said he favors placing the new agency at the State Department.

“I think State is in the best position,” Mr. Sherman said. “They are thought to be in between Defense and Commerce in the balance. Defense says no more often, Commerce says yes too often.”

In the House, Armed Services Committee Chairman Rep. Ike Skelton, Missouri Democrat, praised the reform proposal, saying it would protect Americans.

Mr. Skelton’s Republican counterpart, ranking member Rep. Howard P. McKeon, California Republican, said Mr. Gates’ plan for a single export-control list, single licensing agency, single enforcement-coordination agency and single information-technology system was a dramatic change from the current system.

“We need to ensure it results in greater protection and monitoring of key defense items and technologies,” Mr. McKeon said.

Remy Nathan, the assistant vice president for international affairs at the Aerospace Industry Association, praised the new plan. “We are pleased that Secretary Gates’ proposal has the right emphasis on enhancing national security while focusing on predictability, efficiency and transparency,” he said.

Short-term improvements are important “but fundamental reform can only come from a more unified government approach to identifying what should be controlled and how it should be controlled that is clear to everyone, exporters and regulators alike,” Mr. Nathan said.

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