#ACIExport

ACI’s 17th National Forum on Global Export Controls Compliance

Kathleen Palma

Senior Counsel

International Trade Compliance

GE Aviation

The New World of ECR: How to Minimize Mistakes

In EAR Re-classifications

Susan Fernandez

Director, Trade Compliance

HEICO Corporation

June 12-13, 2014

Tweeting about this conference?

#ACIExport

• Export control reform is likely to be the biggest professional challenge you’ve seen in your career

• Break it down into logical progressions, and prioritize

• Review the foundation: • Classification Order of Review (Supp. 4 to 774)

• ‘Specially Designed’

• Classify to the ECCN subparagraph level

• Technology Classifications

• General Technology Notes (Supp. 2 to 774)

• License Exceptions (740)

• New Terms and Definitions (772.1)

Overview

#ACIExport

The Continuing Plan for ECR

1. Assemble your internal ECR Team

2. Learn and Understand the Fundamentals of

ECR

3. Partner with others

4. Determine business needs

5. Revise export authority strategy

6. Execute

#ACIExport

The Internal Team

• Trade Compliance Dept. to initiate/motivate

• Program Management

• Information Technology Systems

• Engineering

• Sales/Customer Service

• Purchasing/Procurement/Supply Chain

• Traffic/Shipping

#ACIExport

GE: ECR Reclassification

#ACIExport

New Jurisdiction Analysis

Unique Military Items on

USML

State Dept. Jurisdiction

Subject to ITAR

Listed on the USML

Classification -> USML

Category

State Dept.? OR Commerce? OR Commerce Military?

Civil / Dual Use Items

Commerce Dept. Jurisdiction (Dual Use items are Commerce Jurisdiction ONLY, NOT Both

Commerce and State Dept.)

Subject to EAR

Listed on the CCL

Classification -> ECCN

Unique Military Items not on USML

Commerce Jurisdiction

Subject to EAR

Listed on the CCL

Classification -> 600 Series

#ACIExport

Military Aircraft –Summary

• Generally:

• Military aircraft will be 9A610.a, usually requiring a license

• Specific Systems will be 9A610.f-w, only some are STA eligible

• Some less important parts will be 9A610.y, and be NLR

• Other specially designed parts of the above systems will be 9A610.x, and STA eligible

• Technology for above is 9E610, with specific restrictions on STA use (design technology for more important items)

• “Build-to-Print” technology is 9E610, but STA eligible

#ACIExport

ECCN

Description Example Hardware

Build-to-Print

Data

Other Tech

Data

Military aircraft not on USML UH60 9A610.a 9E610.a 9E610.a

ground equipment UH60 transfer cart 9A610.f 9E610.a 9E610.a

aircrew life support UH60 seat belts 9A610.g 9E610.a 9E610.a

canopies and parachutes high altitude parachute 9A610.h 9E610.a 9E610.a

piloting systems for parachuted loads parachute opening system 9A610.i 9E610.a 9E610.a

ground effects machines air cushion vehicle 9A610.j 9E610.a 9E610.a

military flight trainers (non combat) flight trainer for C130 9A610.t 9E610.a 9E610.a

29 '.y' less important items crew rest equipment 9A610.y 9E610.y 9E610.y

aircraft components identified in 9E610.b flap actuation device 9A610.x 9E610.a 9E610.b

all other parts of above items flight data recorder 9A610.x 9E610.a 9E610.a

UAV handling devices UAV launch cart 9A610.u 9E610.a (MT) 9E610.a (MT)

UAV radar altimeters UAV altimeter 9A610.v 9E610.a (MT) 9E610.a (MT)

UAV flight controls UAV control computer 9A610.w 9E610.a (MT) 9E610.a (MT)

STA eligible

NLR

LRC (except Canada)

Aircraft Examples

#ACIExport

Military Aircraft Engines –Summary

• Generally, specially designed:

• Military aircraft engines will be 9A619.a, and STA eligible

• ‘Old SME’ plus LPT/combustor parts will be 9A619.b-e, and STA eligible

• Monitoring systems for above are 9A619.f, and STA eligible

• Some less important parts will be 9A619.y, and be NLR

• All Other Parts of the above will be 9A619.x, and STA eligible.

• Technology for above is 9E619, with specific restrictions on STA use (design

technology for many items).

• “Build-to-Print” technology is 9E619 and:

• not STA eligible for critical items (“SME+”)

• STA eligible for less critical items (and NLR for ‘.y’ items)

#ACIExport

Important: ITAR vs. EAR600

• Many of the higher controlled categories

here only apply to military engines that fell

off the ITAR

• e.g., J85, TF34, T58, TF39

• Those same components on the F110,

F404, F414, T700 were still caught on the

ITAR.

• e.g., the F110 turbine blade is ITAR

#ACIExport

ECCN

Description Example Hardware

Build-to-Print

Data

Other Tech

Data

Military engine not on USML J85 assembly 9A619.a 9E619.a 9E619.a

digital engine controls for above TF34 DEC 9A619.b 9E619.c 9E619.b

HPT, hot comb parts, LPT for above T58 components 9A619.c 9E619.c 9E619.b

Uncooled LPT components for above T64 LPT 9A619.d 9E619.c 9E619.b

Combustion cold parts for above TF39 swirlers 9A619.e 9E619.a 9E619.b

Monitoring systems for above TF34 engine monitoring system 9A619.f 9E619.c 9E619.b

less important parts for USML or above F110 Oil lines 9A619.y 9E619.y 9E619.y

parts differentiated in 9E619.c F110 compressor rotor 9A619.x 9E619.c 9E619.c

parts differentiated in 9E619.b F110 compressor case 9A619.x 9E619.a 9E619.b

non-ITAR parts for USML or above, n.e.s F110 compressor linkage 9A619.x 9E619.a 9E619.a

STA eligible

NLR

LRC (except Canada)

Engines Examples Engines released from the ITAR and their parts

Parts released from the ITAR

#ACIExport

Overall Lessons Learned • Reclassification process, and ECR overall, will

be very time- and resource-intensive

• Cross-functional coordination will be critical

• Get enterprise buy-in on process and priorities

• Impact on non-CJ’d engines and parts

• Work closely with your licensing officers

• Coordinate with your OEMs, suppliers, partners

• Manage expectations and mitigate risk

• Communicate, communicate, communicate

#ACIExport

Coaches Wisdom

Life is ten percent what happens to you

and ninety percent how you respond to it.

– Lou Holtz (College Football Coach)

Failure is not fatal, but failure to change

might be.

– John Wooden (College Basketball

Coach)