Faithful readers of this column are well aware of the on-going efforts to modernize and streamline the current procedures for the export of small arms from the United States. Recent media reports attribute the recent proposed changes to the Trump presidency, but in reality, export control reform has been underway since 2009, at the request of President Obama. Undertaken with the goal of strengthening national security and increasing the competitiveness of U.S. manufacturing, the reform effort has focused on current threats while adapting to changing economic and technological landscapes. The reform effort has taken two noteworthy avenues: ITAR category revisions and EAR/ITAR definition harmonization. Back in 2016, this column predicted that “[t]rue export reform will not occur for most readers until USML Categories I, II and III are completed; however, at this juncture it seems unlikely that massive changes will be made to these categories.” This author could not have been more wrong. In 2018, export reform of USML Categories I, II and III seemed imminent.
Finally, on January 23, 2020, the most recent effort to reform the U.S. Munitions List was published in the Federal Register, with an effective date of March 9, 2020. On the day of publication, 21 states filed a lawsuit in U.S. federal court to delay or prohibit the new regulations from taking place over concerns that 3D-printed firearms would not be subject to sufficient export controls.
On Friday, March 6, 2020, a federal judge in Seattle, WA, agreed with the Trump Administration to allow most of the regulations to take effect on March 9, 2020. The court issued a very narrow injunction against the section of the regulation governing the export of technical data related to 3D-printed firearms.
Transfer of Jurisdiction
Prior to March 9, 2020, the U.S. State Department held jurisdiction over most small arms and ammunition, with the exception of shotguns and shotgun ammunition, which were governed by the U.S. Commerce Department. Under the new regulations, nearly all common sporting firearms, to include single-shot, bolt-action and semiautomatic firearms will transfer from State Department jurisdiction to Commerce Department jurisdiction.
At this juncture, it’s probably easier to state what remains in U.S. Munitions List Category I (under State Department jurisdiction):
(a) Firearms using caseless ammunition.
(b) Fully automatic firearms to .50 caliber (12.7mm) inclusive.
(c) Firearms specially designed to integrate fire control, automatic tracking or automatic firing (e.g., precision guided firearms). Note 1 to paragraph (c): Integration does not include only attaching to the firearm or rail.
(d) Fully automatic shotguns regardless of gauge.
(e) Silencers, mufflers and sound suppressors.
(g) Barrels, receivers (frames), bolts, bolt carriers, slides or sears specially designed for the articles in paragraphs (a), (b) and (d) of this category.
(h) Parts, components, accessories and attachments, as follows:
(1) Drum and other magazines for firearms to .50 caliber (12.7mm) inclusive with a capacity greater than 50 rounds, regardless of jurisdiction of the firearm, and specially designed parts and components therefor;
(2) Parts and components specially designed for conversion of a semiautomatic firearm to a fully automatic firearm.
(3) Parts and components specially designed for defense articles described in paragraphs (c) and (e) of this category; or
(4) Accessories or attachments specially designed to automatically stabilize aim (other than gun rests) or for automatic targeting and specially designed parts and components therefor.
(i) Technical data (see §120.10 of this subchapter) and defense services (see §120.9 of this subchapter) directly related to the defense articles described in this category and classified technical data directly related to items controlled in ECCNs (Export Control Classification Numbers) 0A501, 0B501, 0D501 and 0E501 and defense services using the classified technical data. (See §125.4 of this subchapter for exemptions.)
Most small arms that were once in USML Category I will be moved to 13 new Commerce ECCN categories in the 0X5zz range. In addition, four new “600” series ECCN classifications will be created. The 17 new ECCNs created are:
0A501 – Firearms and Related Commodities: This ECCN governs most firearms (non-automatic, non-semiautomatic and semiautomatic, up to and including .50 caliber), magazines (with a capacity greater than 16 rounds, but less than 50 rounds), receivers, barrels, cylinders and trunnions.
0A502 – Shotguns and Related Commodities: This ECCN governs all non-automatic shotguns, to include those with barrels shorter than 18 inches in length and shotguns with barrels exceeding 18 inches. It also includes controls on parts and components previously listed in ECCN 0A984, the ECCN that previously controlled shotguns and their parts.
0A503 – Discharge Type Arms: This ECCN governs less lethal projectiles and grenades. It is a direct replacement of ECCN 0A985. The new regulation makes clear that such projectiles are classified in that ECCN 0A503 and not classified under ECCN 0A602 or on the USML.
0A504 – Optical Sighting Devices: Previously regulated under ECCN 0A987, the new ECCN no longer differentiates between ITAR-controlled optics previously controlled under USML Category I(f). Export restrictions on most optics are eased or lifted, with limited controls in place for those “specially designed” for use in firearms that are “subject to the ITAR.”
0A505 – Ammunition: This new ECCN governs most ammunition for small arms (up to .50 caliber), blank ammunition, shotgun ammunition up to 10-gauge and the related parts and components. Caseless ammunition, tracer ammunition, ammunition utilizing depleted uranium and ammunition of any caliber preassembled into links or belts (and thus, presumably for use within an automatic weapon) remain controlled by the ITAR under USML Category III.
0A602 – Guns and Armament: This ECCN controls guns and armament (and their parts) manufactured between 1890 and 1919, as well as military flame throwers with an effective range less than 20m. Export restrictions on these commodities are eased, as they do not provide significant military advantage. Modern artillery remains subject to the ITAR under USML Category II. Black powder guns and armament manufactured in and prior to 1890 (and their replicas) have been designated as EAR99.
0B501 – Test, Inspection and Production Equipment for Firearms
0B505 – Test, Inspection and Production Equipment for Ammunition
0B602 – Test, Inspection and Production Equipment for Guns and Armament: These three 0Byyy ECCNs cover “test, inspection and production” equipment for the development or production of firearms, ammunition and (antique) guns. It also extends controls over jigs, fixtures and other metal working implements and accessories designed to be used in the manufacture of firearms, ammunition, ordnance or guns.
0D501 – Software for Firearms
0D505 – Software for Ammunition
0D602 – Software for Guns and Armaments: These three 0Eyyy ECCNs govern software specially designed for the development, operation or maintenance of their respective subject matter categories.
0E501 – Technology for Firearms
0E502 – Technology for Shotguns
0E504 – Technology for Sighting Devices
0E505 – Technology for Ammunition
0E602 – Technology for Guns and Armament: These five 0Eyyy ECCNs govern the export of technical data for their respective subject matter categories. Given the current state of litigation over 0E501 and the issuance of an injunction by the courts, it is possible that the language within 0E501 will change or be modified within coming months.
The following nine ECCNs will be removed, as they have been incorporated into the newly created 0X5yy ECCN categories:
0A918 and 0E984 – Removes the controls over technology for the development, production and/or use of bayonets.
0A984 and 0E984 – Controls over shotguns have been modified and are now controlled under 0A502 or 0A505.
0A985 – Controls over electro-shock weapons have been modified and incorporated into ECCN 0A503.
0A986 and 0E986 – Controls over shotguns shells, equipment to load ammunition and related technology have been modified and incorporated into ECCNs 0A505, 0E502 and/or 0E505.
0A987 and 0E987 – Controls over firearm optics and related technology have been modified and incorporated into ECCN 0A504.
While the new regulatory scheme seems overly burdensome, the reality is that the new regulations should assist in making the export of U.S. arms and equipment easier. Admittedly, the new scheme will require new training throughout the industry to include Commerce Department licensing officers, U.S. Customs officials, foreign end users, manufacturers and exporters. As the barriers to arms export fall, one should anticipate a wave of new “international arms dealers,” who believe that they can effectively export arms with little or no industry experience and who believe that they can export with minimal regulatory interference. In reality, strong controls on the export of arms remain in place under the new regulatory scheme, with the same (or greater) penalties in place for conducting an improper export. As general advice, manufacturers and foreign end users should continue working with existing partners who are well-versed in the export of arms and equipment to avoid civil and criminal penalties for export violations. In return (and with the benefit of time), the industry should see increased export sales under the new regulatory scheme.
Mr. Wong is a Washington licensed attorney. He regularly provides legal counsel to the firearm and defense industry via his law firm, The Firearms Law Group. Mr. Wong also manages Hurricane Butterfly, an import/export company that assists firearm manufacturers, resellers and collectors from around the world wade through the regulatory quagmire of U.S. import/export regulations. The preceding article is not intended as legal advice and should not be taken as legal advice. If the reader has specific legal questions, seek competent legal counsel.