Sensors and Instrumentation Technical Advisory Meeting (SITAC)

MINUTES OF MEETING

November 8, 2012
9:30 a.m., Room 3884
U.S. Department of Commerce
Bureau of Industry and Security
Washington, DC 20230

OPEN SESSION

• The SITAC meeting was held at the Department of Commerce in Room 3884 from 9:30 am to 12:50 pm. There was a closed session for this meeting.

Open Session:

• The open session covered the following topics:

1. Welcome and Introductions
2. Industry Presentations
3. New Business

• Welcome and Introductions.

• The SITAC chair, Mr. John Goodrich¹ opened the meeting with an introduction of the attendees.

• Members/Contractors of the United States Government (USG) attending this meeting included Dr. Christopher Costanzo (DFO), Patricia Peterson (DTSA), Mark Jaso (BIS, Engineer), John Varesi (BIS, Engineer), Dr. Greg Tarr (State/ISN, Technical Advisor), James Thompson (DHS, Lead Analyst), Steve Emme (BIS, Sr. Advisor), Kathleen Barfield (BIS, Program Manager), Dennis Krepp (BIS, Division Director Sensors and Aviation), Arthur Kron (DTSA), John Albert (State/ISN, Foreign Affairs Officer), and Matthew Borman (BIS, Deputy Assistant Secretary for Export Administration).

• A number of companies attended the meeting including John Goodrich (VP, DRS-RSTA), Mike Conschafter (Gvt Advocacy Exelis Geospatial), Jim Giacobazzi (GM, Lumasense ITC), Matthew Jones (Technical Advisor , Intel Corporation), Kanishka Tankala (VP Operations, Nufern), Matthew Schmidt (Director, Fluke Thermography), Kamil Agi (President, K&A Wireless), George Gasparian (Engineer, GPD Optoelectronics), Frank Vallese (President, Sofradir EC), Michelle Hinnrichs (CEO, Pacific Advanced Technologies), Greg Hill (Sr. Director, DRS Technologies), Steve Tribble (FLIR Systems), Steve Black (Chief Engineer, Raytheon), Robert Leger (Director Sales, ION Geophysical), Manjul Shah (Princeton Instruments, Application Specialist), Paul Toumayan (UTC Aerospace Systems, Strategic Business Development), Dave Dozor (Dozor Enterprises, Principal), Sam Gilston (Export Practitioner, Editor).

• One company teleconferenced² in to the meeting Dr. Gabe Fulop (Maxtech).

• Remarks from the Bureau of Industry and Security Management:

• Mr. Borman began with thanking Mr. John Goodrich for his years of service – since 1994.  He appreciated his work on the Uncooled Thermal Imaging Rule and the foreign availability study.  He pointed out that we had been doing 3000 licenses annually and that this has diminished greatly due to his efforts.  Mr. Borman stated that nothing new had been done on export control reform as it pertains to Category 6,  Mr. Goodrich mentioned that all of the rewrites will not be published all at once, Matt discussed the various stages of the process and commented on large industry turnout.
• Dr. Christopher Costanzo provided a summary of the Bureau’s licensing statistics for key Category 6 items:

FY11 (10/1/11-09/30/12):

Total 515 export applications were closed and valued at $93,998,083.
419 approved, 93 RWA’d, 3 rejected.
Average processing time: 34 days.

Top six destinations requesting licenses for dual use infrared cameras were in descending order of value: Sweden ($39M), Switzerland ($6.7M), Russia Federation ($5.6M), France ($5.1M), Israel ($4.9M), and Saudi Arabia ($4.9M).

Note:   Over the same period in the prior FY, there were a total of 726 export applications closed.  Of these 519 were approved, 1 rejected, and 206 rwa’d.  The value of the closed applications during this period was $358,181,742 with 31 licenses to Sweden totaling $265,419,555.

Mr. Steve Tribble (FLIR Systems) asked what the drivers were for the returned without action.  Christopher Costanzo explained that RWA’s were due to Commodity Jurisdictions as well as companies learning to use the new license exceptions such as STA and the UTIC rules.  Mr. Borman also explained that BIS was very happy with the reports that are being submitted.

• Presentations:

Dr. Robert Lieberman, President of Intelligent Optical Systems, gave a presentation titled “Economic Impacts of U.S. Export Control” which lasted approximately an hour. He described the segmentation of the photonics industry and how the majority of it was involved in civilian and commercial efforts as opposed to military.  He also provided some interesting examples of how export controls adversely affect manufacturers of infrared detectors and cameras, manufacturers of high powered lasers, and research universities.  He is concerned that export controls are not becoming simpler; rather they are becoming unnecessarily more complicated.  He is also concerned about items controlled in Category 6 of the Commerce Control List expanding as opposed to what Secretary of Defense Gates had envisioned which was higher fences around fewer items.

Greg Hill (DRS) also provided a presentation developed in coordination with other SITAC members titled “Commercial Infrared Uncooled Products:  Export Status”.  He described the growth of the commercial uncooled thermal imaging market, decline of military uncooled camera sales, growth in competition to US industry, and some suggestions as to how to keep US industry competitive and be able to support the US military in the future with high performance and cutting edge technology.

               
Michelle Hinrrichs (Pacific Advanced Technologies) also gave a short presentation titled “The SAD State of Commercial Cooled Infrared Products”.  In her presentation, she explained the foreign availability of cooled systems worldwide and how export controls are impacting her ability to compete.  She makes some recommendations to level the playing field with non-US sources which includes establishing clear controls at the product level as opposed to the component level.