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September 21, 2004
US Department of Commerce
Washington DC
The meeting was attended by representatives of the Department of Commerce, Department of Defense, by export policy consultants and by those working in industries regulated by the Department of Commerce export regulations.
This was an open meeting. The previous meeting of the TRANSTAC was held on May 18, 2004. Attendance was taken and is attached to these minutes. Minutes were taken by Mike Osborne and are provided below.
This meeting was attended by several prospective members for the Transportation and Related Equipment Technical Advisory Committee (TRANSTAC). It was noted that for those that have been invited to become members of the TRANSTAC, they do not become standing members until their security clearances have been processed, and this can take in excess of 1 year. Since this meeting was an open meeting, all attendees were able to stay for the entire meeting. If there had been a closed portion of the meeting, only those who were members of the TRANSTAC or who were officials of the US Government would have been allowed to remain for that portion.
After an introduction by Mike Osborne, the TRANSTAC chair, the attendees were polled and agreed without dissent that the Transportation and related equipment Technical Advisory Committee was fulfilling a worthwhile function and the Charter for the TRANSTAC should be extended through the coming year.
A round of introductions of the attendees was followed a summary of current membership. There is an ongoing attempt to increase industry participation at the TRANSTAC. There are currently five approved and cleared members of the TRANSTAC from industry, one of which will have his term expire in October. Of the remaining four there is one from the avionics sector, one from airframe manufacturing and two from aircraft engines. We are awaiting appointment additional members from Cessna, Honeywell and possibly others and so are expecting membership to increase over the next year. Mr. Robert Gables of Rolls-Royce and Mr. Todd Zarfos of Boeing have officially become TRANSTAC members since the last meeting.
Opening comments were provided by Matt Borman, Assistant Secretary for Export Administration for the Bureau of Industry and Security of the Department of Commerce. Mr. Borman indicated that issues that have arisen in the past year over jurisdiction and export policy underline the need for joint industry and government activity in the TRANSTAC. Input from the civilian aircraft industry is a key area of need relative to export policy.
One area that was specifically discussed relates to jurisdiction of items such as the QRS-11 rate sensor. In the mid 1990s a member of the QRS-11 (QRS11-400) family had been used in the Maverick missile system and had been determined to be under State jurisdiction. In the spring of 2003 it was noted that another member of the QRS-11 (QRS11-100/101) family of rate sensors was being used in virtually all current production commercial Standby Attitude, Altitude and Airspeed Indicators. When this was discovered, airline operators and aircraft manufacturers of aircraft so equipped were told to that these aircraft were under State Department Jurisdiction for export licensing purposes based on the State Department “see through” rule. By Feb of 2004, agreement was reached interagency that civil aircraft so equipped could begin operating under Commence export rules again.
While this case illustrated the substantial disruption that placing civil aircraft under State jurisdiction while resolving a part jurisdiction issue can cause on a global basis, there has been no action taken to prevent a repeat action in the future.
Gene Christiansen indicated that there is unique vulnerability for those items which come off a common military and commercial production line, it is important to understand how the differentiation is achieved between commercial and military end items. For such items, it is appropriate to complete a formal jurisdiction review early in the program prior to introducing the item in the commercial fleet. There are actually two issues to be aware of: first is the actual jurisdiction of the item and second is the fact that no matter how small or incorporated an item is, if it is controlled by State then based on the “see through” rule, State will control the higher order assembly.
Mr. Borman added that it is important that the US Government and the producing company get together up front and establish what the facts are. Since it was difficult in this case to come to an agreement on a common set of facts, it was difficult to work the problem. From a DOD perspective the differences were more in the area of testing as opposed to actual differences in the hardware.
Mr. Borman stated that in addition, the regulatory solution of the QRS-11 issue was delayed several months because the "see through rule" was challenged by existing regulations on civil aviation within the EAR (Export Administration Regulations of 1979 Section 17 c) and this ultimately failed to resolve the issue. It is important to keep in mind that unless State Department reconsiders the see-through rule there could and probably will be future cases just like the QRS-11 case that will again cause havoc in the commercial aviation industry.
Mr. Osborne raised another question as to the factors that go into determining jurisdiction under Department of State vs. Commerce. It was agreed that normally there are three factors considered. One is whether it was uniquely commercial, in other words is there something different in terms of its configuration that makes it commercial and not military. A second consideration is origination. A third consideration is predominant use. In that regard, the problem often is that if it is a Dept of State controlled item it becomes difficult to sell commercially so achieving predominance is not possible. A follow on question regards whether predominance is considered from day one of its introduction or whether it is temporal. In other words, if the item is no longer in production as a military item but is being sold commercially does the level of relative sales at that point in time constitute predominance. Matt Borman offered the opinion that predominance needs to be considered at the point in time that the CJ is applied for and not over the production life of the product. Ultimately Department of State makes the decision and predominance is only a consideration.
Mr. Lombardi of Department of Defense pointed out that one area where trouble is encountered is where there is a common production line and items get selected to satisfy the military demand and the rest of the production quantity goes to the commercial line without regard to the actual characteristics of those items. If testing is used to segregate items into those that satisfy the military requirements and those that don’t it must test 100% of each production lot.
Jim Thompson next provided an update on Wassenaar related activities. Items discussed included Infra-Red Camera Focal Plane Arrays where proposals for dual use have centered on capability of 100 pixels in the 100 ms or 8-14 micron range. In general there is a need to meet all four of the conditions around Material, Pixel count, Response and Frequency. Todd Zarfos of Boeing discussed and took an action to look at proposals for IR camera controls with respect to current R&D efforts toward commercial aircraft safety.
In another area in EAR category 6A6, Germany provided a proposal to relax controls for flux gate magnetometers. This is currently in review.
In Category 7A2 dealing with gyros (handout provided), there is a current US proposal going into Wassenaar to update controls and provide controls for low angular random walk gyros in addition to low bias stability gyros. France offered a counter proposal in September to change the controls from 10g range to 12g which is being included in the updated proposal.
The 9A012 UAV proposal adopted 1-2 years ago expires in December. This control may go away if a Wassenaar member objects. It is hoped there will be a one to two year extension.
A 9A001 Canadian Proposal for certification of engines specifically designed for military but certified as commercial in order to allow export was provided. There is an ongoing discussion about civil aircraft certification and what it means. Category X of the USML could use clarification in this area of when an aircraft is not considered to be military.
Mr. Rithmire of the Bureau of Industry and Security provided an update on Missile Tech Control Regime changes. In one proposal, Japan is addressing hydrazine controls. Their concern is that current controls capture too much in this area and not just rocket fuel. They contend there are legitimate commercial uses.
In another area, France is questioning controls on superfine Iron Oxide. The question is does anyone use this material in a rocket? If not, a case may be made to reduce controls.
In the area of Accelerometers (reflected as 7A102 in the EAR, new wording lists bias stability and scale factor stability and eliminates older less identifiable parameters in terms of commercially sold accelerometers.
French, United Kingdom and Brazil Missile Tech Control Regime representatives held meetings on September 15. At that meeting the United Kingdom representatives suggested the need for controls on magnetometers for UAV's.
With regard to internal combustion engines for UAV's, the dilemma remains how to single out those specific engines for UAV's without controlling lawnmower engines and snowmobile engines.
Hillary Hess provided an update on changes within the Export Administration Regulations. Ms. Hess detailed how a new rule change in process will liberalize controls on new NATO countries including Bulgaria, Estonia Latvia, Lithuania and Slovenia. Certain crime control related regulations were lifted. These are in place in certain cases because of human rights concerns. Also removed were certain Regional Stability (RS) control items. Certain items on the Wassenaar Munitions List are controlled on the CCL, such items are controlled in ECCN's ending in 018, and such ECCNs are frequently controlled for RS in addition to NS reasons.
There is a proposal for changing the knowledge standard. Included in this update is a safe harbor provision which sets out specific actions which if followed establish a degree of legal protection when there is a red flag involved in a transaction. For this to be in place, the exporting party must send details to enforcement, and a 45 day period is established for accepting the safe harbor. Initial reviewers have indicated they feel this period is too long. This change will not be published in the next Federal Register and is now in interagency review.
Also in interagency review is a proposal to eliminate the use of country group letters within the EAR and replace these call-outs with references to the country chart. Reasons to do this include:
Get rid of free world vs. old soviet block terms.
May take a step out of the process
Joan Roberts next presented country specific policy changes to the TAC. Ms. Roberts is the division director for foreign policy controls for the BIS. She has been working in this area for thirty three years and made special note that this year has brought "massive" changes in policy.
On April 23 of this year, a new Libya rule was published. Libya has been very open recently with regard to its weapons development efforts and in kind this is being reciprocated with consideration of relaxed standing within the EAR.
With respect to IRAQ, in country transfers in Iraq need a license from DOC. In the past this has not been a common license condition. This even applies to EAR99 items (EAR99 catch-all). It is unique in that even transfers to the military within Iraq Is caught due to arms embargo requirements.
With respect to Cuba, last year approximately 40,000 boater licenses were applied for. The coast guard generally granted these licenses but with conditions that the applicant was to get an OFAC license. It is known that most did not get this license from OFAC. Vessels must now make direct transfers to Cuba without intermediate stops. In the past, Cuban nationals were allowed one trip per year but that policy was terminated and the policy now only allows one trip every 3 years. The State Department is also terminating donation trips, and those donations must now go commercial. Some of the larger charities are disputing this policy as making the donation programs economically not feasible. There are significant fines if individuals travel to Cuba and are confronted upon direct return (such as in Miami). The standard OFAC levied fine is $7500 with 20% interest charged on non-payment. If anything is done with the intention to evade, penalties can be levied for that as well.
If there are specific country group questions, a contact in Joan Robert's group can be found at 202-482-4254.
After a break, Gene Christiansen reviewed recent and proposed changes to the U.S. Munitions List (USML). The USML joint agency review was initiated approximately four years ago. There has been a proposal within Cat VIII to move 12 specific aircraft types to the Commerce Control list because they are essentially commercial aircraft but used by the military for applications which are not particularly combat related, such as medical evacuation use (DC-9 example). Committees within congress that have reviewed this proposal have thus far not supported it. A second proposal would make export of certain military aircraft parts subject to a State Department specific license exception. So far, this proposal has also met with Congressional resistance as well. Committees in the Senate and House of Representatives are involved in any such change in the USML.
Category IV (launch vehicles) has also been under review since the last TTAC meeting but there are still outstanding issues preventing closure.
Category XV Space technology is also under review, particularly with respect to radiation hardened integrated circuits. On this item TAC members questioned whether there might be an issue developing with respect to commercial components which are intrinsically becoming more radiation hardened due to changes in geometry and construction as the industry evolves. In addition the TTAC should be aware that the technology necessary to prevent single event upset problems in memory elements used in avionics in the 30,000 ft altitude range may result in those memory elements meeting the five jurisdiction specific criteria in ITAR category V. Since for critical civil aircraft applications such as navigation and flight controls, this becomes a matter of safety of flight, this is a concern. It is also perceived to be a problem of proving a negative of whether a component meets the requirements and as to what the consequences are of later discovering that a component that has been sold without controls is later discovered in testing at Los Alamos laboratories to be radiation hardened and covered by the ITAR controls. Some have suggested that industry may need to "dumb down" designs so they don't meet the ITAR requirements. This approach would not stop production in other countries not governed by ITAR controls or equivalent WA Munitions List controls as technology improves. Further, military and avionics use of these components constitutes a very low percentage of the total market for these devices. If U.S. companies are to stay competitive in the international market they must keep moving the technology forward.
It was suggested that it may be necessary to have an exception within the ITAR controls for integrated circuits which meet certain radiation hardening requirements for use in civil certified avionics to defeat the "see through" problem that would make the device and aircraft subject to ITAR. The TRANSTAC membership agreed that it would be unlikely that devices costing upward of $30,000 would be bought and scrapped for a few memory chips.
Mike Osborne took an action to investigate further what the needs are and what might be proposed as an exception. A white paper may be the next step. Todd Zarfos of Boeing offered assistance.
Mr. Christiansen also indicated there was a jurisdiction issue with respect to L100 and C130 common parts (part number identical). A challenge to the long standing practice of licensing such parts under Commerce was raised by State Department two years ago. The challenge was based on the fact that there are about a hundred L100 aircraft in service but thousands of C130 aircraft in operation world wide. The question of whether it is necessary to treat such common parts as military because there is a predominance of military end use of such parts. Any such change to the long standing practice would severely affect the supply chain established to support these aircraft and may result in massive enforcement actions by State Department. There is also a question about impact of such a change in policy on other aircraft and engine programs where part number identical components are used for both military and civil applications.
With respect to the QRS-11 issue, a commodity jurisdiction ruling made the QRS11-000100-100/101 subject to Dept of Commerce jurisdiction when being exported for use in the manufacture of civil standby instrument systems to be used in commercial aircraft. That guidance was published in Federal Register notices published in January and February 2004. To date 12 commodity jurisdictions have been processed to this end. Most QRS11-000100 applications were for commercial standby instruments but not all. If the standby instrument or the aircraft with the standby instrument installed was exported prior to the finding by Department of State, the exporter must file a voluntary disclosure and a request to have those instruments or aircraft be made subject to Commerce jurisdiction. This has affected a substantial number of aircraft manufacturers.
Two CJ's for other versions than the QRS-11 have been processed. The QRS-11-50 is used in three different civil helicopter control systems. Since The Federal Registers are written so narrowly on this issue, it is not currently possible to more forward on these two CJs or on the issue of the QRS11-100 based standby instrument in a simulator application.
Airbus is having a conference in Washington DC with US government agencies in October to work through issues they have with regard to State Department controls of commercial avionics.
During the QRS11 review, one assertion was that equipment that was certified for use on civil aircraft in accordance with the Export Administration Regulations charter would not be subject to the ITAR, but that did not hold up. It was noted by several in the TAC that this policy puts US civil aviation companies at risk and that overseas aircraft and avionics companies are beginning to use this to their advantage. This is a long term losing strategy for export policy since it dries up foreign markets that are essential to support the technology development that has traditionally made U.S. supplier’s number one in the aerospace industry.
Next proposals for changes to export administration controls were discussed.
First, a possible exception was discussed for support of initial phases of accident investigations and possibly to support providing minimal data for certification authorities in other countries. This was discussed in the previous two TRANSTAC meetings. To move forward with this it is necessary to identify the minimum necessary technical data. It is understood that specific licenses may be needed if detail gets beyond the level, and this would be expected to take perhaps a month or perhaps a little less on an expedited basis. If an accident occurs it may be necessary to provide some initial data to enable safety of flight decisions for the remaining fleet. Since the investigation may include other parties than civil aviation authorities (and NTSB equivalents in other countries), this needs also to be considered.
It was questioned whether if this information was the same as used as sales technology would that is allowed already. The thinking is that technical data to the levels allowed under license exception TSU would be appropriate but that under TSU, civil authorities are not included in the parties of those allowed access to the data, and TSU is the only license exception currently available for technical data covered by missile technology controls. It was also suggested that GOV be used as the license condition upon which the change be made. Since GOV also is not allowed for MTCR controlled items, this may or may not work. Also for GOV, country group issues may be involved and safety investigations and crash investigations do occur in country group D.
Mike Osborne took the action to draft a proposed license exception.
The issue of a change in controls for multi-dome combustors was next discussed. The question at hand is whether the current control is appropriate or do we need to look at combustors more generally and consider what combustor technology has unique military significance. Recently, industry has used multi-dome combustors on industrial engines and at least one commercial aircraft engine, the GE90. This allows a higher level of performance for civil aviation use.
It was questioned whether another advanced technology, that of using super cooling technologies for combustors may also be considered a controlled technology.
David Salome of Honeywell indicated that multi-dome combustors are not prevalent in their product and is still researching the temperature call-outs as appropriate (reference May TRANSTAC meeting).
The TRANSTAC is still looking to get some support from GE on the question of multi-dome combustors.
Mr. Christiansen indicated that he and Bob Clarke have been discussing adjustable flow path geometry and whether it should be reconsidered in the controls. Some of these controls were created during COCOM before 1990 and whether these are still worthwhile controls needs to be reviewed.
Another issue that Mr. Christiansen requested support on is with regard to helicopter power transfer systems. Textron includes Cessna and so Brian Martling indicated that he would make contact with representatives in their associated helicopter group.
With respect to computational fluid dynamics (CFD) software, another topic of past meetings, Mr. Christiansen noted that in his discussions with the industry leaders, they indicated that generally the software is based on fundamental physics and when you validate the software you shouldn’t change the physics to match the test results. Others indicated that in most cases, experimental data is added to the total software solution, generally as an added module, which then makes the final software package controlled for export purposes. It was indicated that most of the data used is rig data from engine tests.
Florida Turbine representatives at the TRANSTAC meeting indicated that they have a set of CFD code "tweaked" to do internal gas flow analysis. Florida Turbines used NASA generated code and turned it into useable design code. They did not change the software modules from NASA per se. Mr. Pfeifer volunteered that there are several types of CFD systems in use at Pratt and Whitney. In general, they start with basic code which is used to come up with an analytical design. . They then test against this design and re-iterate. The test data is completely separate from the basic code and is an add-on.
Mr. Christiansen noted that some try to argue that they only use rig data and no flight or wind tunnel test data, but there is reason to be skeptical of this.
Next directional solidification furnaces were discussed. The TRANSTAC was again charged to determine whether there is significant foreign non-WA country production capability, and on that basis it may make sense to discuss changing current controls.
Controls for electric actuators used in fly by wire aircraft were discussed. When controls were originally written, the only places these were used were in military aircraft which were the first fly-by-wire applications. There are numerous fly-by-wire commercial applications now, and the 7E7 is a new example of a commercial air transport aircraft that will use this technology. The technology for these items would be controlled under 7E004. It is expected that it will be necessary to perform maintenance on these outside the United States, and it may not make sense to try to control this level of technology.
ECCN 1C002 was discussed in terms of materials used in engine manufacturing. When written it was anticipated that these alloys used in the hot section of turbine engines would be made from powders. This control was written in the 1980's and the concern is that this may now be an "empty box" in terms of how it is written, and that materials are not necessarily used in powder form. TAC members volunteered that in most cases ingots of metal alloy are melted in the furnace and cast into engine parts. Even metal alloy manufacturers start with materials in forms other than powders.
Todd Zarfos queried whether fully integrated systems using GLS (which employs differential GPS) should be caught in 7E004 for technology.
Actions open from previous sessions and new actions recorded were as follows:
Action 1: Gene Christiansen to review the proposed exception for technical data to civil aviation authorities and NTSB type organizations which was proposed at the November TRANSTAC.
Update 9/21/04: Mr. Osborne to provide additional refinements to proposal and identify which export license exception should be modified.
Action 2: Mike Osborne to meet with Mike Rithmire of DOC regarding proposed updates to similar accelerometer controls in the MTCR and DOD Technical Working Group (Wassenaar). Mr. Rithmire has been invited to the June 18 Category 7 TWG meeting.
Update 9/21/04: Closed. MTCR and WA groups met in September 2004.
Action 3: (February 2004) Howard Pfeifer will provide feedback on proposed controls to ball bearings.
Update 9/21/04: Closed based on discussions at the May 2004 TRANSTAC meeting.
Action 4: (February 2004) TRANSTAC Team will validate that the current multi-dome combustion controls are realistic or provide any changes that are required, for instance with respect to temperature vs. number of domes.
Update May 2004: This was provided in the handout. There is a follow up action to have other engine manufacturers not represented on the TTAC review the proposal. (Gene Christiansen).
Update September 2004: Howard Pfeifer to coordinate putting the proposed changes into Wassenaar proposal format.
Action 5: (February 2004) TRANSTAC Team: Review 9E003.a.4 and a.5 on whether temperature range is correct and whether this needs to be with respect to hot spot, average or some other defined gas path or hardware temperature.
Update: This was provided in the handout at the May 2004 TRANSTAC meeting. There is a follow up action to solicit inputs from GE and other engine manufacturers (Gene Christiansen).
Update September 2004: Howard Pfeifer to coordinate putting the proposed changes into Wassenaar proposal format.
Action 6: Howard Pfeifer to look at directional solidification furnaces and get export input on the questions raised during the May TRANSTAC.
Update September 2004:
Action 7: TRANSTAC members and others from industry: Mr. Christiansen would like feedback pro and con regarding Directional Solidification (DS) furnace controls. The concern is that there are a lot of parties including the Chinese that are capable of making DS capable furnaces then the control may not be reasonable.
Update September 2004: Howard Pfeifer and TRANSTAC to research volume and capacity in non-WA country corporations.
Action 8: Mr. Zarfos to provide the TRANSTAC with background on the future need for infrared cameras in the area of civilian aircraft safety to facilitate consideration of changes in controls of IR cameras.
Action 9: Mr. Osborne will investigate the need for use of radiation hardened integrated circuits in civil aviation to avoid single event upsets that threaten aircraft safety. If in the future it will be required to use these parts in civil certified equipment, should there be an exclusion note in ITAR for civil certified avionics?
Action 10: Mr. Martling: Check with Bell on power transfer system issues and report back to the TRANSTAC
Meeting frequency was discussed. Generally we would target quarterly meetings, but not to have another meeting until after Labor Day due to vacations, and Mondays are also not desirable.
The next meeting date was set for 9:30 am on December 8, 2004 at the Department of Commerce.
Michael Osborne * (chairperson)
Honeywell
763-957-4346
mike.osborne@honeywell.com
Matt Borman
Dept of Commerce
202-482-4196
Howard M. Pfeifer *
Pratt and Whitney
860-565-5649
howard.pfeifer@pw.utc.com
Brian Martling
Cessna Aircraft
316-831-2385
BWMARTLING@cessna.textron.com
Bill Root
Export Control Consultant
301-942-6720
waroot@aol.com
Dan Squire *
Dept of Commerce
202-482-3710
dsquire@BIS.doc.gov
Joe Brostmeyer
Florida Turbine Technology
561-746-3317
jbrostmeyer@FTTINC.com
Robert W. Gable *
Rolls-Royce
317-230-3466
ROBERT.W.GABLE@ROLLS_ROYCE.com
Anthony Lombardi *
DOD/DTSA
703-325-4171
anthony.lombardi@osd.mil
Joanne Stellato
DOD/DTSA
703-325-3573
joanne.stellato@osd.mil
Todd Zarfos *
Chief Project Engineer
Boeing
425-294-5441
todd.w.zarfos@boeing.com
Paul Sellers
Research Staff Member
Institute for Defense Analyses
703-845-6796
psellers@ida.org
Regan Albenda
Associate
Coudert Brothers LLP
202-736-1221
alberdar@coudert.com
David Salome
Export Control Specialist
Honeywell Engines and Systems
480-592-5289
david.salome@honeywell.com
Mark Tyndoll
Government Relations Advisor
Sidley Austin
202-736-8743
mtyndoll@sidley.com
Kasia Dourney
Intern
European Union Delegation to the US
202-836-8539
katarzyna.dourney@cec.us.int
Eileen Giglio
Special Projects
OSD-AT&L ITS
703-693-0031
eileen.giglio@osd.mil
Donald S. Stevenson
AES Engineering Globalization ITC Manager
Honeywell, Inc.
602-436-2829
Donald.Stevenson@Honeywell.com