NAM Supports Modernized Export Controls

Oct. 6, 2008
New rule allows U.S. manufacturers to transfer technology, items and personnel license-free within their own corporate families.

The National Association of Manufacturers (NAM) last week showed its support for a new export control procedure for Intra-Company Transfers or "ICT" -- exports from one part of a company to another part of the same company located abroad.

"The Intra-Company Transfer exception has been the NAM's number one dual-use export controls modernization priority," said NAM President John Engler. "We have led the effort and have worked tirelessly with the Department of Commerce to facilitate the creation of the new exception in a way that improves national security while simultaneously spurring technological innovation, especially in the high tech sector.

"This new exception will allow U.S. manufacturers to transfer technology, items and personnel license-free within their own corporate families, eliminating the need for thousands of individual export licenses," said Engler. "Trade from one part of a corporate family to another part is very secure, and needs to be treated differently from transactions involving overseas purchasers.

"Before this new rule, U.S. companies had to obtain a separate export license for every shipment of export controlled items to their branches overseas, even though they were shipping basically the same things to the same branches over and over again," said Engler. "The old license requirements were clogging the system, diverting government export licensing officers away from more important task of checking potentially risky transactions. They also caused delays and needless costs for U.S. high-tech exporters."

The new intra-company transfer rule will facilitate product development and allow U.S. manufacturers to be first-to-market by reducing delays and shipment uncertainties. Most importantly, it will free limited resources for the U.S. Government to focus its licensing and enforcement resources on truly high- risk transactions.

"We worked hand in glove with the Administration, our member companies, and our coalition partners to come up with a way that worked both for increased security and increased competitiveness," said Engler. "To be eligible for this new system, companies will have to meet high requirements for ensuring their supply lines are secure and provide regular reports to the Commerce Department."

This new exception and other announced reforms are largely the result of proposals that the NAM and its partners in the Coalition for Security and Competitiveness submitted to the Commerce Department and White House in March 2007. The NAM's efforts have created a collaborative environment between our members and government that is important for export controls modernization.

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