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Tuesday, September 7, 2010     INTELLIGENCE BRIEFING

New U.S. export regime lowers the bar on deals with selected Mideast states

WASHINGTON — The administration of President Barack Obama has reformed U.S. export controls to increase defense deals with the Middle East and other allies.

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Officials said the administration would ease restrictions on thousands of munitions and other military equipment to facilitate exports. They said the reforms would accelerate defense exports to such countries as Iraq, which plans to order $13 billion worth of military equipment from Washington.

"Our preliminary analysis is that about 74 percent of the 12,000 items we licensed last year in this Munitions List category will either be moved to the Commerce Control List or will be decontrolled altogether," the White House said. "About 32 percent of the total may be decontrolled."


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Officials said the reforms would accelerate defense exports to a range of Middle East states. They cited Iraq, which has ordered hundreds of M1A1 main battle tanks as the basis of its conventional military.

Under the administration proposal, components of the Abrams would be removed from the Munition List, Middle East Newsline reported. This included brake pads for the tank, virtually identical to that used in fire trucks.

"But the tank brake pads require a license to be exported to any country around the world, while the fire truck brake pads can be exported to virtually all countries without a license," the White House said.

Officials said other Middle East allies have also complained of bureaucratic delays in the U.S. approval of weapons exports. They cited Saudi Arabia, which has warned that it would turn to other Western allies for major combat platforms such as fighter-jets, tanks and missiles.

In August 2009, Obama ordered a review of the U.S. export control system, severely criticized by the defense industry. The interagency review determined that the export control system, with three primary licensing agencies, was ineffective and harmed U.S. competitiveness.

"Under the approach outlined by the president, agencies will apply new criteria for determining what items need to be controlled and a common set of policies for determining when an export license is required," the White House said. "The control list criteria are based on transparent rules, which will reduce the uncertainty faced by our allies, U.S. industry and its foreign partners, and will allow the government to erect higher walls around the most sensitive items in order to enhance national security."

Officials said the administration would maintain sanctions on such countries as Iran, Sudan and Syria, all deemed terrorist sponsors. They said controls on U.S. critical technology, including advanced software, ballistic missiles and stealth aircraft, would be retained.

"With the military becoming increasingly dependent on commercial-off-the-shelf dual-use technology, it is important to ensure that our licensing criteria are based on objective technical parameters that take into account the strategic nature of an item and whether or not the item is available from non-U.S. suppliers," Commerce Secretary Gary Locke said.



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