On March 15, 2006, Arent Fox legal secretary Corey Smith attended the quarterly meeting of the Materials Processing Equipment Technical Advisory Committee (MPETAC) at the Department of Commerce. The Committee advises the Office of the Assistant Secretary for Export Administration on technical questions that affect the level of export controls applicable to materials processing equipment. Below is a summary of this meeting.

1. Paul Warndorf, MPETAC Chairman, welcomed everyone to the meeting.

2. The floor was then opened to the presentation of papers and comments by the public. Discussion began on the long standing debate for defining some of the very broad terms that are often used in regulations; specially designed, munitions production and munitions production facilities being the most heavily discussed. Some terms in the EAR, such as munitions production facilities, are marked as defined terms, but are not defined. A definition was then proposed for munitions production facilities to read “those structures coupled with technology or software specially designed for munitions production.” The point was made that this definition did little to pin down exactly what was meant by munitions production facilities, because this definition included other terms, in particular specially designed and munitions production, that also need to be defined. The history of ‘specially designed’ was discussed and we were told that defining that term has turned into an obstacle that no one seems willing or able to tackle. The most consistent definition is based on the jury instructions in Matrix v. Churchill, but even that definition has been generally disregarded in lieu of a broader reading. This discussion on terms led into a discussion on Wassenaar progress, proposals and the possible definitions of terms.

3. George Loh, BIS Licensing Officer, shared some proposals for changes to regulations regarding contact lens manufacturing machines. Under one proposal, machines that: 1) have controllers limited to prescription software; and 2) possess no vacuum chucking capabilities, would no longer require licenses for export. These two parameters would replace the ‘specially designed’ terminology in the existing regulation. The hope is that these parameters will make the licensing for these types of machines easier to understand and more consistent.

4. A representative from the Department of Defense then gave some information on proposed changes to their regulations. He reported that Defense was trying to clarify text in Non-destructive inspection controls (x-ray and ultrasonic machines). This clarification is to “clean up” terminology and is not thought to change restrictions on these machines. Additional controls are proposed for ‘optical finishing tools,’ as other machines that do the same things are not controlled at this time. This new regulation would catch those additional machines.

5. Mr. Loh then spoke about other proposed changes to the EAR. As a trend, he explained, that BIS was trying to conform more closely to Wassenaar regulations. Some of these changes include decontrol of grinders specially designed for crankshafts, allowing X, Z, and C axes for cylindrical grinders, and releasing more gig grinders. There is a proposed change in the regulation on tool grinders to say that those over 150 mm tooling will be controlled and a proposed decontrol of 4 axis milling machines. Discussion as to the merits of this proposal are to the effect that you can make anything with a 4 axis milling machine that you can with a 5 axis machine, and so why not decontrol both 4 and 5 axis milling machines?

6. Mr. Loh began a discussion regarding nuclear proliferation controls. Usually, within NSG (Nuclear Suppliers Group) Nations, BIS does not require licenses for NP (Nuclear Proliferation) items. Recently China and several other smaller nations have joined NSG. China’s entry has made it so that BIS is reluctant to remove those restrictions on any of the new member countries. Discussion then began on Indian restrictions and it was said that the level of restrictions on exports to India is lessening, including several groups in India coming off of sensitive lists, but that India is still not a member of NSG and so NP controlled items still require licenses.

7. Mr. Loh then spoke on the status of the ‘China Catch-All.’ He started by saying that, although 90% of the effect would be felt by exports to China, it was not a ‘China Catch-All’ but a ‘Military End-Use Catch-All’ that was to include other countries with embargoes in place. The purpose is to catch all of the AT (anti –terrorism) controlled items exported for military end-use. He said that 90% of the regulation will involve the 900 number ECCNs with 10% covering other number sections. The regulation will affect about 35 individual ECCNs. He stated that the regulations will stress military end-use and not end-user, because so many of the exports will go to companies controlled by the government (especially in China), which may create a greater amount of uncertainty. He also stressed that since there would be no license requirement for nonmilitary end-use exports, and that the Department would not require any sort of ‘end-use certification.’ Also, exporters would not be held responsible for doing any sort of extensive investigation as to the possible use of their products at some time in the future (as opposed to immediate intended end use). These things being said, Mr. Loh stated that it may be wise to get some sort of end use agreement, and that exporters were expected to make good faith inquiries as to the future use of their products. He then went into a sample of the affected ECCNs including 1B999, 2A993, 2B991, and 2B993. The countries subject to the Catch-All will be listed in section 126 of the ITAR, and includes Afghanistan, Belarus, China, and others.