Categories  Export Control

Export Reform: Lawmakers See Threat to Oversight Role

As the Obama administration moves to expedite arms sales to foreign countries, key lawmakers are claiming the executive branch is threatening Congress’ role in overseeing sensitive foreign arms deals.
With the April 18 release of a Pentagon report that urges Congress to ease restrictions on commercial satellite exports and another move that would speed up the congressional notification process for foreign military sales, the administration is pressing ahead with reforms that would open business opportunities for U.S. firms that have struggled with a restrictive and sometimes lengthy export control process.
However, since Congress remains deadlocked on a number of issues, lawmakers are not inclined to make a deal with the White House, even if they admit some reform is needed.
This was evident last week in an angry opinion piece in The Washington Times from Indiana Sen. Richard Lugar, the top Republican on the Senate Foreign Relations Committee. In it, he accused the Obama administration of seeking “power to ram through weapons transfers without fully answering congressional questions and concerns.”
Lugar was referring to proposed changes to the congressional notification process, which alerts Congress of potential foreign arms sales. If the sale is big enough, the administration is required to give Congress time to review the details of the transaction, ask questions and raise any objections.
The notification process is also used any time an item is to be transferred off the State Department’s U.S. Munitions List (USML) and onto the Commerce Department’s Commerce Control List (CCL), where there are fewer
restrictions to obtaining an export license. In December, the administration began briefing lawmakers on the changes it planned to make to accelerate the current system.
While Lugar and other lawmakers are accusing the White House of a power grab, Pentagon and State Department officials maintain that the changes are needed to keep the United States’ competitive edge in the global market and on the battlefield.
In a previously undisclosed letter to House Speaker John Boehner, R-Ohio, and Vice President Joseph Biden, Joint Chiefs Chairman Gen. Martin Dempsey on Dec. 9 urged Congress to work with the administration in implementing improvements to the notification process.
The current system has been “largely expanded by informal untimely processes,” Dempsey wrote. “These unintended delays harm our reliability as a supplier, impede interoperability and partnership capacity objectives with our allies and partners, and limit our ability to make timely changes to the USML, as the law requires. As a result, the current notification system impedes our ability to protect, supply, and otherwise support our warfighters, allies, and partners.”
Changing the System
Specifically, the Obama administration is seeking to limit what is called the “pre-notification” period, when the executive branch informally notifies the majority and minority staffs in both the House Foreign Affairs and the Senate Foreign Relations committees of a major foreign arms sale. Under today’s system, the administration will wait until it has approval from all four before formally notifying Congress of a sale.
“Previously, there was an unbounded pre-notification system where a license or sale would go to our oversight committees and we would be unable to move it until the staffers — all four of them — affirmatively agreed that we could move forward,” said Andrew Shapiro, assistant secretary of state for political-military affairs.
Shapiro said the new system is designed to move less controversial sales more quickly. It does not do away with pre-notification but limits it to 20, 30 or 40 days, depending on the sensitivity of the case. In some cases that process has stretched on for months.
“For every sale, we’ve said that if a committee member raises an objection directly, we will not move forward with that sale until we have interacted directly with the member to address their concerns,” Shapiro said. “This means the staffers will no longer be able to hold a sale by not giving their assent.”
A former George W. Bush administration official said the proposed changes are nonpartisan and address a longstanding problem.
Ambassador Lincoln Bloomfield, who had Shapiro’s job at the State Department from 2001-05, said, “I think the message from the executive branch is actually something members of Congress should embrace. What they’re saying is, „We want Congress to get involved.’”
When he was at the State Department, Bloomfield said he was never called by a member of Congress to talk about a concern over an arms transfer, except when it was to advocate for a license on behalf of a constituent.
These sales are of strategic importance and they deserve the attention of lawmakers, not their professional staff, he said.
However, for lawmakers and their staff, the new time limits are unacceptable and represent an abandonment of the case-by-case consideration of arms sales that has been used for decades.
Under the current process, each sale is looked at on its individual merits, irrespective of where it’s headed, one senior Senate staffer said.
The unbounded informal consultation period allows for a healthy back-and-forth between the congressional branch and the executive, staffers say.
“The administration thinks we’re micromanaging, but we have caught mistakes along the way that averted embarrassment for the administration and avoided the need to resort to a resolution of disapproval,” the senior Senate staffer said.
For example, a few years ago, congressional staff identified small arms and light weapons intended for units of a certain country’s military forces that were listed by the State Department as gross human rights abusers, the staffer said. “People hadn’t even checked that. The system works because we don’t block things and we find mistakes through our questions.”
Under the new system, the 30-day formal notification period would remain.
Today, once the administration gets approval from the committee staff, it can move ahead to the formal notification process, which is written into the Arms Export Control Act.
If 30 days elapse and Congress has not blocked the sale, the administration is allowed to move forward with it.
Congress can formally block a sale by passing a joint resolution of disapproval in both the House and Senate. For that resolution to survive, Congress needs a two-thirds majority to override a presidential veto.
Congress rarely resorts to legislation and instead prefers to work out its differences with the administration during the informal consultation period.
However, in some instances, the pre-notification process can take months and may get caught up in issues unrelated to the merits of the particular arms sale in question, said trade expert Gary Stanley, president of the Washington law firm Global Legal Services. “It can therefore render the statutory 30-day notification period meaningless.”
The State Department and Capitol Hill do not agree on how long this process can drag on and who is to blame for the delays.
According to the State Department, in 2010, the average time it took to get a major arms sale approved was 90 to 95 calendar days. This included sales to the United States’ closest allies.
The executive branch likes to point to some of the more extreme cases. For example, three cases initiated in 2009 took more than 500 days for congressional staff to clear, according to the State Department.
In Lugar’s op-ed, he disagrees, saying, “The „pre-notification’ consultations usually proceed expeditiously in both houses of Congress with bipartisan cooperation — the median committee review time in 2010 was just 21 days.”
It is important to note that the State Department is using an average number, while Lugar cites the median or middle value, complicating the comparison of statistics.
“Whether it’s the mean or median, we’ve never agreed,” the senior Senate staffer said.
While the State Department points its finger at Congress for dragging its feet, staffers on Capitol Hill say that often it is the administration causing the delay by waiting too long to notify or not responding quickly enough to congressional questions about a particular sale.
Either way, trade experts agree that the process can drag on long enough to annoy foreign customers.
“There is nothing wrong with the system if operated as intended; the problem is both sides have abused the system in terms of not being prompt and it puts industry and the customer in the position that „we don’t know where it is; we don’t why it hasn’t gone; we don’t know what the problem is,’ and that makes it very hard to carry on any kind of a business relationship,” said Joel Johnson, international executive director of the Teal Group.
Export Control Reform
Streamlining the notification process is also important for the Obama administration’s broader export control reform efforts.
The State and Commerce departments have been busy rewriting the two lists that govern arms exports: the USML and CCL. With the goal of building “higher fences around fewer items,” the administration is proposing to transfer hundreds of thousands of less sensitive parts and components off the USML and onto the Commerce Department’s CCL.
Similar to foreign weapons sales, each transfer requires the review and approval of Congress.
According to the State Department, congressional staff processing times for removing items from the USML averaged 215 days in 2009, with some cases taking up to 534 days. The Export Control Reform report to the president noted one example where the removal of tires for heavy off-road trucks from the USML took 947 days.
To implement the administration’s export control reforms, “we need more timely, predictable, and transparent notification processes,” Dempsey wrote in his letter. “Secretary of State Clinton’s plans on process improvements will ensure that Congress has ample time to review individual arms sales and USML changes.”
Lawmakers remain unconvinced.
In Lugar’s op-ed, he argued that the current system has been around for decades and it has never impeded the United States’ competitive edge.
In an April 3 letter to Clinton, he noted that the most important example of this is the status of the U.S. as the No. 1 arms exporter in the world. The letter was also signed by the House Foreign Affairs Committee leadership: Rep. Ileana Ros-Lehtinen, R-Fla., and Rep. Howard Berman, D-Calif.
In his op-ed, Lugar said the reforms leave lawmakers with no options other than reverting to joint resolutions of disapproval.
Hitting Obama where it hurts, Lugar said the new reforms could harm Israel’s security, because Congress would have a diminished ability to block a sale to one of Israel’s potential adversaries in the Middle East.
However, Shapiro said, “This administration has no desire to move forward with sales where there is a chance that it could be blocked by a resolution of disapproval.”
The State Department insisted that these reforms would not undermine Israel’s “qualitative military edge.”
1248 Report
As part of the USML rewrite, the Obama administration is also addressing the export of commercial satellites, which since 1999 have been required to remain on the munitions list.
For years, industry officials have said current law goes too far and overregulates the U.S. commercial satellite business.
The administration has scrubbed the USML’s Category XV — spacecraft systems and associated equipment — and is making recommendations for items to be transferred to the CCL.
“I believe we’ve really narrowed the scope of what we recommend should be controlled on the munitions list,” said Lou Ann McFadden, strategic issues division chief at the Defense Technology Security Administration. “We truly identified our crown jewels and those are the things we want to put the fences around, and everything else we’re willing to let go, and we believe the CCL has the appropriate controls.”
On April 18, the Pentagon released the long-awaited 1248 report, which found that the national security risks associated with removing commercial satellites from the USML and transferring jurisdiction to the Commerce Department are manageable.
However, none of the proposed changes can happen without legislation.
In November, Berman, the top Democrat on the House Foreign Affairs Committee, introduced a bill called the Safeguarding United States Satellite Leadership and Security Act of 2011 (HR 3288), which would authorize the president to remove satellites from the USML. It would still prohibit export of commercial satellites to certain countries, including China.
His bill is co-sponsored by Rep. Don Manzullo, R-Ill.
Meanwhile, Sen. Michael Bennet, D-Colo., plans to introduce his own bill in the Senate this week.
However, not everyone on Capitol Hill is supportive. Rep. Mike Turner, R-Ohio, said he disagreed with the idea that relaxing export controls on thousands of space technologies would make the country safer or further national security goals.
A senior Senate staffer said, “You’re going to see a fair number of people with concerns.”
By KATE BRANNEN

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