(Bloomberg) -- President Joe Biden’s administration has determined that Australia and the UK have export control systems comparable to that of the US, fulfilling a key requirement to ease weapons trade under the Aukus partnership.
The finding removes a key point of contention with the defense industry and members of Congress as the US seeks to build on the three-nation defense partnership created in part to counter China’s expanding military activity in the Indo-Pacific region.
The State Department will publish on Aug. 20 an interim version of a final rule lessening restrictions on weapons and technology trade among the three allies. The exemption, which will take effect on Sept. 1, covers “the vast majority of commercial defense trade between and among the United States, Australia and the UK, for both Aukus and non-Aukus programs,” the department said in a statement Thursday. The exemption doesn’t apply to equipment and services on the State Department’s Excluded Technology List.
Publication of the rule will open a 90-day public comment period that may result in adjustments for the eventual final rule. The State Department already modified an initial proposal to allow exports of items including source code, classified manufacturing know-how for electronics and navigation and defense services for night-vision devices.
US exports covered by the new exemption could be valued in the billions of dollars, according to a State Department official who briefed reporters on condition of anonymity. The UK government estimated that as much to £500 million ($643 million) of the country’s exports could benefit from the rule change. The Australian government said the changes would eliminate the need for about 900 permits covering A$5 billion ($3.3 billion.)
Australia and the UK will implement reciprocal changes to their export-control regimes to harmonize trade, the US official said. The changes “will significantly enhance collaborative opportunities between the governments and defense industries in the three countries and reduce compliance costs and delivery timelines for UK programmes,” the UK government said in a statement.
Items not eligible for the exemption, such as those covered by the Missile Technology Control Regime, or those involved in the development of chemical and biological weapons, will be granted expedited review, with licensing applications adjudicated “within 30-45 days, to the extent practicable,” according to the State Department.
“Both the rule and certification of comparability provide the US, UK, and Australian governments — and the respective industries in all three nations — with the structure necessary to realize Aukus’ success,” said Eric Fanning, chief executive officer of the Aerospace Industries Association.
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