Technology Security & Foreign Disclosure Reform

Mr. Gordon Yim

Senior Technology Security and Foreign Disclosure Analyst

Office of International Cooperation/International Plans and Transactions

OUSD(Acquisition, Technology and Logistics)/IC/IPT

11th Annual Firearms Import/Export Conference

August 1, 2012

1

Agenda

• Problem Overview• Export Control Reform• Technology Security and Foreign Disclosure

(TS&FD) Reform • Defense Exportability Features Initiative• Questions

2

The Problem

• What are our strategic objectives wrt to the partner?

• What are the partner’s capability requirements?

• What capabilities does the partner want?

• How urgent is the need?

• Is there a higher-priority need for these capabilities?

• What is the partner’s capacity to absorb and effectively employ the capabilities in question?

• What strategic benefits does the U.S. gain by providing the requested / required capabilities?

• How sensitive is the technology in question?

• What is the partner’s ability to capitalize on the technology in question?

• What is the partner’s capability and will to protect sensitive U.S. technology?

• What are the risks to the U.S. or its allies/partners if the technology / system is compromised?

• How serious are these risks?

• Can these risks be mitigated satisfactorily?

3

Provide required capabilities

quickly to allies and partners

Protect the “crown jewels” of U.S. Defense

technology

How can the USG/DOD best balance these two demands?

What is DOD’s

“decision trade

space”?

???

TS&FD versus Export Approval

USGTS&FD

Approval

USGTS&FD

Approval

USGExport

Approval

USGExport

ApprovalService, OSD

and USG TS&FD boards meet to

determine if release is “the right thing to

do”

Compliance with the AECA and

ITAR – either via an approved

Export License or ITAR

Exemption

4

Preparing for exportability early

in acquisition process – Defense

Exportability Features (DEF)

Reducing Congressional

notification process timeline

Defense Cooperation and

Exports

Protecting “crown jewels” and

fostering economic/national security interests

What Can DoD Influence?

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Enhancing DoD’s ability to provide urgently-needed capabilities to

partners and allies

Ensuring efforts are aligned with general U.S. foreign policy goals –

e.g., QME, MTCR

Security Cooperation

Reform

Enhancing DoD TSFD decision processes to

provide timeliness, quality and

synchronization of release reviews

Acquisition Initiatives

Export Control Reform

Tech Security & Foreign

Disclosure

DoS-proposed Congressional

Notification process

Foreign Policy/Pol-Mil

Considerations

DoD

Interagency

Export Control Reform-- Basic Principles --

• Basic Principles– Protect the “Crown Jewels” of U.S. Technology

Ensure protection of assets that gives our warfighters a critical edge– Expedite Technology Sharing and Cooperation with Allies and Partners

Build Partnership Capacity Secure ties with Allies and partners; increase cooperation and collaboration

– Enhance and improve enforcement, monitoring, and intelligence capabilities Deny exports to countries and entities of concern

• Basic Elements– Single Control List– Single Export Control Licensing Agency – Single IT System to process all licenses – Single Export Enforcement Coordination Agenc

6

International Programs Overview

- Foreign Military

Sales (e.g. F-18)

- Cooperative Memorandum

of Understanding (e.g. JSF)

- Direct Commercial

Sales(e.g. C-17)

Technology Security&

Foreign Disclosure

Export Control

StateNo

Yes

DoD-Led(State & Intel Community

Participation)

State – Munitions (Commerce – Dual Use)

International TransactionMechanisms

Technology Security &Foreign Disclosure

(TS&FD)

Export Control

Congressional Oversight

StateSFRCHFAC

DoDSASC HASC

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TSFD Status Quo – Multiple Entry/Exit – Multiple ‘Pipes’ –

Gov’tIndustry

• FMS• Direct Comm’l

Sale• Cooperative

MOUs• Other

No Integrated OSD Appeal

Process

~150 -200 High Level Decisions (HLDs) & Top Level Decisions (TLDs)/yr

~500 SpecializedRoutine Decisions (SRDs)/ yr

Interagency process

NDPLO/CLOATCOMSECSAPDSCMTCRNVD/INSIntelDL/WFPNT/GPSGEOINTEW

AT&L Primary

AT&L Process

SAPCO Specialized

AT&L + Policy Specialized

USD(I) Specialized

NII Specialized

NII Specialized

NSA & NII Primary

NGA Specialized

Policy Specialized

Policy Primary

None No single process

DTSA Specialized

DecisionDecision

DecisionDecision

DecisionDecision

DecisionDecision

Decision

OSD Staff & DoD Component ‘Core TSFD’

Routine TSFD Decisionsbased on delegated authority

ATTR SSG (Arms Transfer & Technology ReleaseSenior Steering Group)

MILDEPs

Other DoD

Components

PROBLEM #4Too many decision documents

PROBLEM #3 – Too much autonomy w/out synchronization & timelines

PROBLEM #5 No top level DoD closure process

PROBLEM #2Too many entry points/no triage

PROBLEM #1Reactiveapproach

~ 150-200 HLDs/yr

~ 85K RDs /yr

~ 85,000 Routine Decisions (RDs)/ yr

NSA and NGA based on specialized

authorities

~ 500 SRDs/yr

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TS&FD Reform Background

• DSD established Technology Security and Foreign Disclosure Review Group (TS&FD RG) in July 2010 based on an Export Control reform report recommendation

• DSD approved ‘Phase I’ TS&FD RG Findings & Recommendations on Dec 20, 2010 with key follow-up actions: Establish TS&FD Office (TSFDO) (Feb 14, 2011)

Conduct Phase II TS&FD processing ‘trade space’ analysis and report

Implement TS&FD RG ‘Good Ideas’ on a rolling basis

• SecDef concurred with this approach on Jan 5, 2011 during Security Cooperative Reform (SCR) Task Force briefing

• TS&FD ‘Phase II’ Findings and Recommendations approved by DSD on Apr 15, 2011 – Implementation currently underway

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10

ATTR SSG(Co-Chaired by USD(P) & USD(AT&L))

Appeal Process

• FMS• DCS • Cooperative MOUs

• Other

OSD Staff & DoD Component ‘Core TS&FD’

Routine TS&FD Decisionsbased on delegated authority

ATTR SSG

DSD or SD

AppealDecision

AppealDecision

IF PROBLEM

Consolidated Decisions

IF PROBLEM

Guidance &Direction

DoDTS&FDOffice

DoDTS&FDOffice

MILDEPs

Other DoD

Gov’tIndustryCountry

HLDs

RDs

NSA ( for CNSS) & NGA (for RSCOM)

based on specialized authorities

SRDs

Policy (NDP)

AT&L TS&FD

CIO TS&FD

USD(I) TS&FD(RSCOM)

Guidance &Direction

CNSS – Committee on National Security SystemsDCS – Direct Commercial SaleFMS – Foreign Military SaleHLDs – High Level Decisions (OSD level)MILDEPs – Military DepartmentsMOU – Memorandum of UnderstandingNDP – National Disclosure PolicyRDs -- Routine Decisions (except for COMSEC and GEOINT)RSCOM – Remote Sensing CommitteeSRDs – Specialized Routine Decisions (on COMSEC and GEOINT)

New DoD TS&FD System -- Process Overview --

DTM-053: Attachment 4

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TS&FD Process Transition Plan

• Authority: DTM 11-053 “Technology Security and Foreign Disclosure (TS&FD) Processes”

• PURPOSE: Establishes policy and assigns responsibilities for the reform of TS&FD processes

to minimize process complexities, ensure timeliness and efficient processing of TS&FD release review requests; and implement holistic DoD-wide release review processes.

Provides additional guidance to the DEPSECDEF Memo “Comprehensive Review of DoD TS&FD Processes,” 22 Jul 10 and further delineates the roles and responsibilities of the ATTR SSG.

Establishes the TSFDO to serve as the central processing organization for ATTR SG review and adjudication of DoD high level decisions (HLDs) and specialized routine decisions (SRDs) that impact DoD aspects of TS&FD release requests in accordance with its missions and functions.

Initiates detailed planning for consolidation and subsequent implementation under the guidance of the ATTR SSG to DoD TS&FD authorities according to their respective member responsibilities.

11

DEF Background

Exportability design is rarely incorporated in AT&L programs …

Why? Because it isn’t considered or (if it is) it’s not funded

Why isn’t it considered?• Because we rarely accept the fact that systems will be exported in the future• Because we focus efforts on meeting defined U.S. warfighter JCIDS requirements rather than undefined Building Partnership Capacity (BPC) requirements

Why isn’t it funded? • Because (until FY11 & 12 NDAAs) we haven’t had clear authority to spend U.S. tax dollars “for foreign requirements”• Because we rarely have foreign funds available in early development

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Defense Exportability Features SEC. 243 FY11 NDAA w/ FY12 NDAA (para (b)) Added

SEC. 243. PILOT PROGRAM TO INCLUDE TECHNOLOGY PROTECTION FEATURES DURING RESEARCH AND DEVELOPMENT OF DEFENSE SYSTEMS. 

a) PILOT PROGRAM.—The Secretary of Defense shall carry out a pilot program to develop and incorporate technology protection features in a designated system during the research and development phase of such system.

b) COST-SHARING.—Any contract for the design or development of a system resulting from activities specified under subsection (a) for the purpose of enhancing or enabling the exportability of the system either (1) for the development of program protection strategies for the system, or (2) for the design and incorporation of exportability features into the system shall include a cost-sharing provision that requires the contractor to bear at least one half of the cost of such activities.

c) ANNUAL REPORTS.—Not later than December 31 of each year in which the Secretary carries out the pilot program established under this section, the Secretary shall submit to the congressional defense committees a report on the pilot program, including a list of each designated system included in the program.

d) TERMINATION.—The pilot program established under this section shall terminate on October 1, 2015.

e) DEFINITIONS.—In this section:

(1) The term “designated system” means any system (including a major system, as defined in section 2302(5) of title 10, United States Code) that the Under Secretary of Defense for Acquisition, Technology, and Logistics designates as being included in the pilot program established under this section.

(2) The term “technology protection features” means the technical modifications necessary to protect critical program information, including anti-tamper technologies and other systems engineering activities intended to prevent or delay exploitation of critical technologies in a designated system.

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Defense Exportability Features (DEF)

• 7 programs (6 MDAPs and 1 non-MDAP) selected for DEF pilot program in FY11:

― 4 Program Offices in the process of soliciting/executing DEF feasibility studies with FY12 funding

― 3 programs reported to be unable to execute FY12 DEF study funding

• Study funding will total approximately $1.75M out of $1.89M appropriated, with matching funding from vendors in three programs

• AT&L/IC will work closely with the MILDEPs and contractors during study process and facilitate interaction with and feedback from Technology Security and Foreign Disclosure community.

• DEF feasibility studies will inform DEF implementation decisions for each program

Building “Exportability” into US Systems

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Questions?

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