Thomas McCarthy Dives into Export Control Reform with Metro Corp Counsel

Akin Gump international trade practice head Thomas McCarthy was interviewed on the topic of export control reform (ECR), its past and future, by Metropolitan Corporate Counsel, the resulting article titled “Higher Walls, Lower Barriers?”

Among the topics covered in the interview:

  • What prompted reform: “In many respects, the system was channeling too many resources into things that were not really the focus of U.S. policy and national security objectives. There were lots of anecdotes in support of those concerns. They ranged from the mundane to the absurd, and some were acknowledged by the U.S. government in launching reform. They gave an example of a bolt for an F-18 fighter jet that was controlled in exactly the same way as the F-18 itself. Everyone, including the government, agreed that was not an appropriate way to approach national security controls on exports.”
  • The impact of moving items from the International Traffic in Arms Regulations (ITAR) to the Export Administration Regulations (EAR): “[T]he impact of ECR on aerospace companies previously subject only to ITAR restrictions has varied widely depending on their product lines, service offerings and business models. The change has added a lot of complexity to existing compliance activities because companies are now required to comply with two regulatory regimes rather than one, which can be challenging from a resource perspective. But as companies have continued to adjust, we’ve seen some take advantage of the changes to allow themselves to enter into, for example, supplier and customer relationships that previously were much more difficult, complicated or even completely foreclosed to them because of the more severe ITAR restrictions that they labored under.”
  • ECR’s state of play: “State, Commerce and Defense have made more progress on ECR than anyone thought possible in 2009. It’s been remarkable. The goals, however, were extraordinarily ambitious, including the complete synthesis of the ITAR and EAR control lists, which were maintained by different agencies, into a single list, as well as other goals like consolidation of the IT system. Ultimately, to achieve the most ambitious of the goals, legislative action will be required, and that is beyond the control of the agencies and the administration. So it remains a work in progress.”

To read the full interview, please click here.