SCHUMER: ROCHESTER’S NEW PHOTONICS HUB COULD FACE SIGNIFICANT OBSTACLES SELLING PRODUCTS OVERSEAS; NEW FEDERAL RULE COULD JEOPARDIZE GROWTH OF PHOTONICS INDUSTRY IN ROCHESTER – SENATOR URGES FEDS TO IMMEDIATELY SCRAP PLAN THAT COULD DIRECTLY IMPEDE ROCHESTER PHOTONICS COMPANIES FROM SELLING HI-TECH PRODUCTS FOR NON-MILITARY USES

New Proposed Fed Rule Would Put Optics & Photonics Products On Restrictive Export Control List & Could Block Access To Foreign Markets; List is Meant To Protect Sensitive Military Technology But Optics, Lasers, Other Component Now Made In Rochester Would Be Threatened If Restrictive Rule Prohibits Rochester Companies From Exporting Components In Non-Military Commercial Products

Overly Restrictive Rule Comes On The Heels Of Major Announcement That Rochester Will House New Photonics Research Center; If Rule Is Implemented and Producers Cannot Ship Products To International Buyers, Manufacturing And Research Jobs Could Move Overseas 

Schumer To Feds: Rewrite Export Rule to Promote Growth of Thriving NY Photonics Industry

Today, U.S. Senator Charles E. Schumer urged the Department of Defense (DOD), Department of Commerce and Department of State to work together to rewrite a newly proposed rule that would put restrictive limits on exporting optics and photonics industry products. Schumer said this proposed rule comes on the heels of their successful efforts to ensure Rochester was selected to become the new national American Institute for Manufacturing (AIM) Photonics. Specifically, this proposed rule would prevent optics and photonics companies in Rochester from exporting certain products for commercial, non-military purposes around the world by putting them on a list meant to protect sensitive military technology. Schumer said that this rule, by limiting the export of high tech components manufactured by the industry, could block the Rochester photonics industry from accessing vital foreign markets. Schumer said laser and infrared technology, initially used in military devices, have many commercial uses, often in life saving healthcare products. These components should have the appropriate avenues for export approval to allow for their needed use in healthcare and to support U.S.production. If the rule were to be implemented, it would make the U.S. industry less internationally competitive and could force optics and photonics production overseas. Schumer therefore urged these three agencies to work with stake holders in the industry and academia to rewrite the rule in a way that carefully considers national security interests and potential barriers to exporting commercial photonics products.

“This proposed photonics export rule is overly restrictive, and, if implemented, could have a very negative impact on Rochester’s and Upstate New York’s optics and photonics industries – at exactly the moment the American Institute for Manufacturing (AIM) Photonics is poised for lift-off. That is why I am calling on the federal government to go back to the drawing board and rewrite this rule so our critical optics and photonics producers are not needlessly put on this restrictive list. Since Rochester will be home to the country's national photonics center of innovation, now is the time to promote the growth of this quickly expanding industry, not constrict it with imprecise federal export rules. These industries employ over 175,000 people nationwide, including more than 15,000 in Rochester alone – but this proposal could threaten their jobs if manufacturing must be shipped overseas because companies can no longer export their products for commercial, non-military use,” said Schumer. “New York has taken a major step forward in leading the world in the development of this high-tech industry, but this rule would take it two steps back.”

“The export control reforms will have a direct and lasting impact on industry and our academic community. It is incredibly important that the governing departments work closely with the impacted community to rewrite the USML Category XII proposal, and send this rule in a more positive direction for U.S. industry and national security,” said Tom Battley, Executive Director of the Rochester Regional Photonics Cluster.

The optics and photonics industry employs over 175,000 people at over 900 companies nationwide, with Rochester and Upstate New York playing a leading role in the advancement of the industry. The New York Photonics Industry Association, a Rochester organization representing over 15,000 optics, photonics, and imaging cluster workers, has stated its deep concern over the proposed rule. Schumer explained that this proposed rule, which is currently being considered by the DOD, Commerce Department and State Department, would significantly limit the optics and photonics industry’s ability to export their products to foreign markets. Specifically, the rule would revise Category XII of the United States Munitions List (USML) to broaden the type of products considered to be sensitive military technology. Products listed on the USML are placed under hard export limits due to the government’s desire to prevent sensitive technology from getting into the hands of those who may threaten U.S. national security. However, Schumer said that this proposed rule would subject companies like those in Rochester, which produce lasers and infrared devices for commercial, non-military use, to unfair regulations that could greatly inhibit their international competitiveness. Schumer said many of the components produced by the optics and photonics industry, which may have initially been used in military technology, are used in products such as laser components in healthcare devices.

Schumer asked these federal agencies to carefully rewrite the proposed rule in a way that more precisely delineates which parts and components fall under the USML and which fall under the Commerce Control List (CCL). The CCL has less restrictive export limits on listed products and would allow the optics and photonics industry to acquire licenses to export their less sensitive products to allied nations without exposing sensitive American military technology.  Products listed on the USML are subjected to hard export limits as they have been designated as sensitive military technology. The USML is being revised as part of the Export Control Reform (ECR) Initiative. Schumer asked federal agencies to rewrite the proposed rule in way that follows the ECRs objectives of better protecting highly sensitive U.S. military technology, while allowing for increased export growth in less sensitive technology used in commercial items. Category XII is a classification of products and technology that includes fire control products, range finders, and optical and guidance control equipment, which are frequently used by the military. The proposed changes to Category XII include many products made by the optics and photonics industry. In many cases, these products are less sensitive technology that should be placed on the CCL, which would allow for their appropriate commercial use. By putting these types of products under Category XII of the USML, commercial products would not be available for export. This would severely impede the global growth of the optics and photonics industry and elevate the chances that this thriving industry would move overseas to avoid restrictive export limits.  

Schumer have long advocated for the optics and photonics industry, which has served as an anchor of economic growth across Upstate New York. Earlier this month Schumer successfully secured $110 million for the University of Rochester (UR), New York Polytechnic Institute (SUNY Poly), and Rochester Institute of Technology (RIT) to establish a state-of-the-art advanced photonics and manufacturing institute. The site will be part of a broader initiative launched in 2014 by the Obama Administration to establish manufacturing and photonics institutes around the country. The UR-SUNY Poly-RIT center will focus on developing integrated photonics products, many of which will prevented from spreading to foreign markets if the proposed rule is implemented.

A copy of Schumer’s letter to the DOD, Commerce Department and State Department appears below:

Dear Secretary Pritzker, Secretary Kerry and Secretary Carter:

We write to express our concerns regarding the recently proposed rule published for Category XII of the U.S. Munitions List (USML). The optics and photonics industries in our states have informed us that the proposed rule would significantly limit their ability to export their parts and components for commercial, non-military use. We ask that the Department of Commerce and the Department of State thoroughly review comments submitted to the record and work with stakeholders in the optics and photonics industries, as well as academia, to rewrite the proposed rule in a way that more precisely delineates which parts and components fall under the USML and which fall under the Commerce Control List (CCL). New USML regulations must be carefully devised to both strengthen our national security and allow for future growth in rapidly advancing high-tech industries.

As members who represent U.S. optics and photonics facilities and their workers, we are concerned that if proposed rule to Category XII of the USML is implemented, some of our nation’s most innovate industries would be restricted from growing and producing more good paying jobs. The optics and photonics industry employs over 175,000 people at over 900 companies nationwide, including over 15,000 workers across 100 companies based in the greater Rochester New York area, producing cutting-edge military and commercial.

We are concerned that the proposed Category XII USML rule diverges from the Export Control Reform (ECR) Initiative objectives to better protect highly sensitive US military technology, while allowing for increased export growth in less sensitive technology used in commercial items. Laser and infrared technology, for example, are components used in Category XII USML devices, but also have commercial uses in life saving healthcare products. These components should have the appropriate avenues for export approval to allow for their needed use in healthcare and to support US production. Overly restrictive and confusing USML regulations could have the unfortunate effect of driving US production of USML items abroad.

Specifically, we are concerned that the proposed rule does not properly differentiate between items that fall under the USML and items that fall under the Department of Commerce’s Control List (CCL), a less restrictive export control list. As you know, in 2013 as part of the ECR Initiative, the Department of Defense and the Department of Commerce agreed upon the “specially designed” for military use definition that was intended to simplify the distinction between military USML items and dual-use (commercial and military) items that would fall under the CCL. We urge you to consider using this definition in Category XII where it is appropriate.

Again, we ask that you thoroughly review submitted comments and work with stakeholders in the optics and photonics industries, as well as academia, to rewrite the proposed rule. Category XII of the USML includes many rapidly advancing technologies that could be appropriately used for commercial purposes around the world. We must strike a balance between protecting our sensitive military technology and preventing unfair barriers for exporting technology in job growing industries.

Thank you for your time and attention on this important issue. We look forward to working with you to further the ERC Initiative. 

Sincerely,

Charles E. Schumer

United States Senator

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