The U.S. State Department informed Congress on Thursday that Australia, Britain, and the United States now have export-control regimes that are comparable, a vital development for advancing technology sharing within the trilateral AUKUS defense pact. Established in 2021 to address concerns over China’s increasing influence, AUKUS aims to enable Australia to obtain nuclear-powered submarines and advanced armaments, including hypersonic missiles.
The exchange of sensitive technologies has previously been constrained by stringent U.S. International Trafficking in Arms Regulations (ITAR). To address this, the 2024 U.S. National Defense Authorization Act (NDAA) tasked President Joe Biden with determining whether Australia’s and Britain’s export control systems are akin to those of the United States to qualify for ITAR exemptions.
In a statement, the State Department indicated that it had concluded that the export control frameworks of Australia and the UK align with those of the United States and that reciprocal export exemptions for U.S. entities are in place. An interim final rule amending ITAR and allowing for these export licensing exemptions for Australia and the UK is set to be published on Friday, with an effective date of September 1.
Nonetheless, the final rule will specify certain sensitive technologies that are excluded from the ITAR exemptions, suggesting that there may still be significant bureaucratic challenges ahead to fully realize AUKUS initiatives. Despite these hurdles, Australian Defence Minister Richard Marles described the reforms as a “generational change,” while a British government spokesperson characterized the development as a “historic breakthrough.”
Marles noted that these reforms would transform defense trade, fostering innovation and cooperation essential to address current strategic challenges. A State Department official estimated that around 80% of the commercial defense trade’s value would now be covered by the licensing exemptions, streamlining transactions significantly.
Currently, the U.S. issues approximately 3,800 defense export control licenses to Australia annually, with approval times reaching up to 18 months, whereas British approvals take around 100 days. U.S. and Australian officials explained that there will be a 45-day period for the U.S. State Department to decide on technology transfers related to the excluded list between different entities, and 30 days for transfers between governments.
The State Department plans to hold a 90-day public comment period regarding the interim final rule to allow for refinements in future rule-making processes. The goal is to enhance innovation and strengthen the defense industrial capabilities of the three nations by facilitating substantial license-free defense trade.
A draft rule released in April was viewed positively in Australia, yet some defense export control experts expressed concerns that the broad exclusions could render the policy changes ineffective. The updated list of exclusions still encompasses particular submersible and undersea acoustic technologies relevant to AUKUS, but they would still require a license for export.
The Republican chair of the U.S. House Foreign Affairs Committee, Michael McCaul, praised the recent developments but labeled them as overdue, asserting that there remain too many critical items not included in the exemption that hinder the full implementation of AUKUS. Former Pentagon official Jeff Bialos also stressed that the details of the final ITAR waiver would be crucial; if they are overly complex, they could become ineffective and counteract the intended enhancement of technology cooperation.