In addition to AUKUS, the US states that Australia and the UK are comparable to export control by Reuters

By David Brunnstrom and Michael Martina

WASHINGTON (Reuters) – The U.S. State Department told the U.S. Congress on Thursday that Australia, Britain and the United States now have comparable export control regimes, an important step needed to facilitate technology sharing and enable the trilateral AUKUS defense pact to advance.

AUKUS, established in 2021 to address shared concerns about China’s growing power, is designed to allow Australia to acquire nuclear-powered attack submarines and other advanced weapons such as hypersonic missiles.

However, the sharing of closely watched technology, which is governed by strict US International Traffic in Arms Regulations (ITAR), has been an obstacle to cooperation.

The US National Defense Authorization Act of 2024 (NDAA) required President Joe Biden to determine whether Australia and the UK have export control regimes “comparable to those of the United States” and therefore qualify for ITAR exemptions.

“Today, the State Department submitted to Congress a determination that the export control systems of Australia and the United Kingdom are comparable to those of the United States and have implemented a reciprocal export exemption for US entities,” the State Department said in a statement.

It said it would publish an interim final rule on Friday to amend the ITAR and implement export license exemptions for Australia and Britain, effective Sept. 1.

The final rule, however, will include a list of sensitive technologies excluded from ITAR exemptions, and analysts say that will likely mean significant bureaucratic hurdles will still need to be overcome to realize AUKUS projects.

Earlier on Thursday, however, Australian Defense Minister Richard Marles called the reforms a “generational change” and a British government statement called it a “historic recognition”.

“These critical reforms will revolutionize defense trade, innovation and cooperation, enabling collaboration at the speed and scale needed to meet our challenging strategic circumstances,” Marles said in a statement.

A State Department official told reporters that for the U.S., about 80 percent of the value of current defense commercial trade would be covered by license exemptions, increasing the speed and predictability of those transactions.

The US issues around 3,800 defense export control licenses to Australia each year, which have taken up to 18 months to be approved, while UK approvals took 100 days.

Australian and US officials said the US State Department would have a 45-day window to decide on the transfer of blacklisted technologies between governments and industry, and 30 days for government-to-government transfers.

The State Department said a 90-day public comment period for the interim final rule will “allow for further refinement in subsequent rulemaking.”

It said the goal was to “maximize innovation and mutually strengthen our three defense industrial bases by facilitating billions of dollars in safe unlicensed defense trade.”

A draft rule made public in late April was hailed as a game changer by Australia, although some defense export control experts said at the time the list of exclusions was so broad it made the policy changes almost meaningless . Among the exclusions were certain submarine and hypersonic technologies.

The State Department official said the updated exclusion list still contains “certain submersible technologies, certain underwater acoustic technologies” relevant to AUKUS.

However, this did not mean that they could not be exported. “All it means is we need to see a license for it before it arrives,” the official said, adding that applications should be processed within 30 to 45 days.

“We will make sure … that the transaction can happen, that it can happen at the speed of relevance, safely,” the official said.

The draft’s unveiling in April was followed by a month-long comment period in which industry bodies and defense firms called for the list of exclusions to be narrowed.

The Republican chairman of the U.S. House Foreign Affairs Committee, Michael McCaul, welcomed Thursday’s decision but called it long overdue and said “there are still too many elements essential to the full implementation of AUKUS that are not included in this exemption.

“Until the Technology Excluded List is limited to just a few items — as Congress intended — big government regulations will continue to impede the ability of this crucial alliance to truly deter conflict in the Indo-Pacific,” he said in a statement .

Jeff Bialos, a former senior Pentagon official now a partner at law firm Eversheds Sutherland, said the details of the final ITAR waiver would be critical because it would be too administratively burdensome, obsolete and undermine the purpose of cooperation improved technologies. .