The U.S. may grant Australia and Britain a long-sought export control carveout for AUKUS in the coming months, but not as fast as some lawmakers wish while they wait on a congressionally mandated certification the State Department must issue first.
The three AUKUS allies view an Australian and British carveout to the International Traffic in Arms Regulation, or ITAR, as crucial to facilitating a key pillar of the trilateral pact to jointly develop advanced defense technologies like quantum computing, artificial intelligence and hypersonic weapons.
When the State Department, which oversees ITAR, updated Congress last week on Australian and British efforts to beef up their export control laws, it stopped short of certifying that the countries have developed similar regulations to the U.S. – a prerequisite for the carveout. Defense companies view the ITAR exemptions as crucial for AUKUS allies to get the ball rolling on advanced technology collaboration.
The lack of certification last week generated pushback from Sen. James Risch of Idaho, the top Republican on the Foreign Relations Committee. But the State Department may issue the certification and exemption in the months ahead after consultations with defense industry stakeholders.
“The Biden administrations determination that the U.K. and Australia do not have a system of export controls comparable to those of the United States is deeply misguided and further delays the implementation of AUKUS,” Risch said in as statement on Monday. “It is time to deliver on the promise of AUKUS. Continued failure to do so would demonstrate the administration is fundamentally unserious about competing with China.”
The fiscal 2024 defense policy bill mandates that both countries develop comparable export control laws to the U.S. before receiving their ITAR exemptions. The bill requires the State Department to update Congress on the progress every four months. The next reporting deadline is August 18, but the State Department could make the certification before that.
“We understand the importance of these exemptions to move AUKUS forward and remain committed to working together to get this done as soon as possible,” the State Department told Defense News in response to Risch’s statement. “We understand the importance of enhancing security standards to protect our sensitive technology as we break new frontiers on developing emerging tech together.”
Australia passed legislation in March to enhance its export control regime, which it just enacted this month. Britain tweaked its export control regulations in December to cover certain categories of sensitive information.
“Collectively, the AUKUS partners agree that robust consultation with industry is important to complete before the exemptions take effect to maximize their potential and use,” the State Department said.
The State Department added it looks forward “to robust engagement in the weeks ahead with industry stakeholders after trilateral partners publish draft regulations for collaboration. Public input is vital; [we] will publish draft regulations for exemption soon.”
Republicans in Congress last year unsuccessfully sought to grant Australia and Britain the ITAR exemptions without requiring them to overhaul their own export control laws. But Democrats sided with the State Department, arguing that the two allies should update their export control laws to help keep sensitive defense technology out of the hands of adversaries like China.
Risch in his Monday statement said “efforts to compel changes in the regulatory systems of our closest allies constitutes extraterritorial overreach and delays our ability to deter China – the core objective of AUKUS.”
Some Australian defense companies expressed concern over Canberra’s efforts to replicate a U.S.-style export control regime, worrying that it could inhibit their ability to do business with non-AUKUS countries.
Canada is currently the only country to receive the blanket ITAR exemption sought by Australia and Britain.
The U.S. ratcheted up export control laws after China and Iran took advantage of Canada’s ITAR exemption in the 1990s to circumvent Washington’s arms transfer regulations. China used Canada to purchase infrared equipment from a U.S. firm, while Iranian front companies used the country to buy American weapons.
The incidents prompted the U.S. State Department to revoke Canada’s ITAR exemption in 1999, only to restore it in 2001 after the close NATO ally strengthened its laws, harmonizing its export control list with U.S. regulations.
The FY24 defense policy bill also requires the State Department to update regulations allowing it to expedite the transfer of military technology to Australia and Britain for categories not covered by ITAR.
The Commerce Department’s Bureau of Industry Security, which oversees a separate export control list, updated its regulations on Friday to exempt Australia and Britain from the vast majority of its regulations for AUKUS.
The U.S. invited Japan to participate in some advanced technology collaboration with the AUKUS allies when Prime Minister Fumio Kishida visited the White House earlier this month.
Risch objected to the Biden administration inviting Japan before making the certification necessary to give Australia and Britain the broad ITAR exemptions.
“Without this certification, cooperation on advanced technologies under AUKUS — the very types of military capabilities needed to counter China — will remain stymied by regulations and bureaucracy,” Risch said at the time.
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