On July 24, 2020, the Trump Administration announced a new policy (the “Updated UAS Policy”) on exports of US-origin unmanned aerial systems (UAS), also known as “drones.” The Updated UAS Policy follows the Trump Administration’s UAS policy reforms announced in April 2018 (“April 2018 UAS Export Policy”), which allowed exports of certain US-origin armed and unarmed UAS to occur via direct sales between US companies and foreign end users. Our previous blog post on the April 2018 UAS Export Policy is available here. The Updated UAS Policy does not change UAS export licensing requirements under the International Traffic in Arms Regulations or the Export Administration Regulations, but does remove a major restriction on exports of US-origin UAS.
The Trump Administration’s new policy comes at a time when the UAS regulatory climate is undergoing rapid transformation. As previously discussed on Baker McKenzie’s UAS Insights blog, the Federal Aviation Administration is in the process of promulgating regulations that would require UAS to have remote identification and would authorize UAS operations at night and over people, and is overseeing a pilot program to promote innovative UAS uses such as supply deliveries.
US Reinterpretation of the MTCR Guidelines
The Missile Technology Control Regime (MTCR) is an informal, voluntary arrangement among partner countries to limit the proliferation of nuclear, biological, and chemical weapon delivery systems and related technology through common export policy guidelines. Historically, military UAS and related sub-systems, software, and technology were listed in MTCR Category I. Export license applications for MTCR Category I items are subject to an unconditional strong presumption of denial. As part of the Updated UAS Policy, the Trump Administration will reinterpret the MTCR Guidelines so that a subset of MTCR Category I UAS with a maximum airspeed of less than 800 kilometers per hour will be listed under MTCR Category II. MTCR Category II items are generally considered less-sensitive and are subject to case-by-case review in terms of export licensing. The White House noted in a press statement released with the Updated UAS Policy that efforts begun in April 2018 to modify the MTCR’s guidelines had failed and thus the Trump Administration is now implementing this policy unilaterally.
Focus on Increasing UAS Exports
The Updated UAS Policy appears to be partially motivated by an effort to increase US manufacturers’ share of the UAS export market. In the White House statement, the Trump Administration asserted that the policy change “will increase our national security by improving the capabilities of our partners and increase our economic security by opening the UAS market to United States industry.” As such, the Updated UAS Policy reflects the broader effort to increase consideration of economic interests in arms transfer decisions under the Trump Administration and promote exports of UAS to US allies and partners.