BIS Relaxes Drone Export Controls to Bolster Defense Industrial Base

The rule is being implemented pursuant to last year’s Executive Order that directed federal agencies to take actions aimed at “unleashing American drone dominance.” 

BIS explains in the rule’s preamble that although UAV “capabilities that once provided a military advantage have become increasingly available to consumers at significantly reduced costs, relevant export controls have not kept pace with the advancement of the commercial UAV market.” The relaxation of export controls is intended to expand “the export of trusted, U.S.-manufactured UAVs and related technologies to global markets” and to “support {} a strong and secure domestic UAV industry vital to the U.S. defense industrial base.” Coming on the heels of allowing a process for the licensing of high-powered artificial intelligence chips to China, it seems that the Trump Administration has realized that overly strict export controls can work against the US defense industrial base, particularly in cases of widespread foreign availability. 

Fewer License Requirements on UAVs With Endurance of Less Than One Hour

Per the new BIS rule, commercial drones with under one hour of maximum endurance are now subject to National Security Column 2 license requirements, as opposed to the more restrictive requirements of National Security Column 1. 

This change applies to items falling under Export Control Classification Number (ECCN) 9A012.a.1 — namely, non-military drones “designed to have controlled flight out of the direct ‘natural vision’ of the ‘operator’” and having both of the following qualities:

• a.1.a. A maximum “endurance” greater than or equal to 30 minutes but less than one hour.
• a.1.b. Designed to take-off and have stable controlled flight in wind gusts equal to or exceeding 46.3 km/h (25 knots).

As a result of this change, ECCN 9A012.a no longer requires a license for Wassenaar Arrangement Participating States except Malta, Russia, and Ukraine. Previously, a license was required for all countries except Australia, Canada, and the United Kingdom. 

Expanded Availability of License Exception STA

BIS also expanded the availability of License Exception Strategic Trade Authorization (STA) to UAVs that are subject to missile technology (MT) controls, provided they cannot deliver at least a 500 kg payload to a distance of at least 300 km.

MT controls apply to two types of items:

1. Non-military UAVs and remotely piloted vehicles that are capable of a maximum range of at least 300km, regardless of payload.
2. Complete UAVS described in ECCN 9A120, which controls UAVs capable of autonomous flight control and navigation or controlled flight out of the direct vision range of a human operator and that incorporate (or are designed or modified to incorporate) an aerosol dispensing system or mechanism with a capacity of over 20 liters. These UAVs are primarily used in agricultural applications. 

As a result of the new rule, these MT controlled UAVs can now be exported, reexported, or transferred (in-country) to destinations in Country Group A:5 without a license via License Exception STA. This license exception comes with certain requirements that must be fulfilled to qualify for the license exception, like informing recipients of the relevant ECCNs, obtaining a written prior consignee statement prior to export, and notification of shipments.