1. Technology Security & Foreign Disclosure Reform
11th Annual Firearms Import/Export Conference
August 1, 2012
Mr. Gordon Yim
Senior Technology Security and Foreign Disclosure Analyst
Office of International Cooperation/International Plans and Transactions
OUSD(Acquisition, Technology and Logistics)/IC/IPT 1

2. Agenda Problem Overview Export Control Reform
Technology Security and Foreign Disclosure (TS&FD) Reform
Defense Exportability Features Initiative
Questions 2

3. How can the USG/DOD best balance these two demands?
The Problem
How can the USG/DOD best balance these two demands?
Provide required capabilities quickly to allies and partners
Protect the “crown jewels” of U.S. Defense technology
What is DOD’s “decision trade space”?
???
What are our strategic objectives wrt to the partner?
What are the partner’s capability requirements?
What capabilities does the partner want?
How urgent is the need?
Is there a higher-priority need for these capabilities?
What is the partner’s capacity to absorb and effectively employ the capabilities in question?
What strategic benefits does the U.S. gain by providing the requested / required capabilities?
How sensitive is the technology in question?
What is the partner’s ability to capitalize on the technology in question?
What is the partner’s capability and will to protect sensitive U.S. technology?
What are the risks to the U.S. or its allies/partners if the technology / system is compromised?
How serious are these risks?
Can these risks be mitigated satisfactorily?

4. TS&FD versus Export Approval
USG
TS&FD Approval 
USG
Export Approval
Compliance with the AECA and ITAR – either via an approved Export License or ITAR Exemption
Service, OSD and USG TS&FD boards meet to determine if release is “the right thing to do” 4

5. Defense Cooperation and Exports
What Can DoD Influence?
Ensuring efforts are aligned with general U.S. foreign policy goals – e.g., QME, MTCR
Defense Cooperation and Exports
DoD
Interagency
Foreign Policy/
Pol-Mil Considerations
Reducing Congressional notification process timeline
DoS-proposed Congressional Notification process
Enhancing DoD TSFD decision processes to provide timeliness, quality and synchronization of release reviews
Tech Security & Foreign Disclosure
Preparing for exportability early in acquisition process – Defense Exportability Features (DEF)
As the SECDEF has pointed out regularly, the world has changed significantly since the end of the Cold War – these changes have had major ramifications for the U.S.’s provision of security assistance to partner’s and allies
This slide captures some of the most significant pressures on security assistance broadly and the FMS process in particular
The factors highlighted in the blue balloons have inexorably led to a 3-fold increase in FMS sales, most of which have occurred in the last 3 to 4 years.
The greatly increased volume of sales – combined with the urgency of wartime requirements – has pushed the Department toward significant business process improvements
Export Control Reform
Acquisition Initiatives
Protecting “crown jewels” and fostering economic/national security interests
Security Cooperation Reform
Enhancing DoD’s ability to provide urgently-needed capabilities to partners and allies

6. Export Control Reform -- Basic Principles --
Protect the “Crown Jewels” of U.S. Technology
Ensure protection of assets that gives our warfighters a critical edge
Expedite Technology Sharing and Cooperation with Allies and Partners
Build Partnership Capacity
Secure ties with Allies and partners; increase cooperation and collaboration
Enhance and improve enforcement, monitoring, and intelligence capabilities
Deny exports to countries and entities of concern
Basic Elements
Single Control List
Single Export Control Licensing Agency
Single IT System to process all licenses
Single Export Enforcement Coordination Agenc 6

7. International Programs Overview
Transaction
Mechanisms
Technology Security &
Foreign Disclosure
(TS&FD)
Export
Control
Congressional
Oversight
DoD-Led
(State & Intel
Community
Participation)
State – Munitions
(Commerce – Dual Use)
Foreign
Military
Sales
(e.g. F-18)
State
SFRC
HFAC
DoD
SASC
HASC
Export Control
Yes
Technology Security& Foreign Disclosure
- Cooperative
Memorandum
of Understanding
(e.g. JSF)
- Direct
Commercial
Sales
(e.g. C-17) No
State 7

8. TSFD Status Quo – Multiple Entry/Exit – Multiple ‘Pipes’ –
PROBLEM #3 – Too much autonomy w/out synchronization & timelines
PROBLEM #4
Too many decision
documents
PROBLEM #2
Too many entry points/no triage
NDP
LO/CLO AT
COMSEC
SAP
DSC
MTCR
NVD/INS
Intel
DL/WF
PNT/GPS
GEOINT EW
AT&L
Primary
Process
SAPCO
Specialized
AT&L + Policy
USD(I)
NII
NSA & NII
NGA
Policy
None
No single process
DTSA
Decision
PROBLEM #1
Reactive
approach
No Integrated OSD Appeal Process
MILDEPs
~ HLDs/yr
Gov’t
Industry
ATTR SSG
(Arms Transfer &
Technology Release
Senior Steering
Group)
PROBLEM #5
No top
level DoD
closure
process
Decision
Decision
Decision
Decision
Decision
FMS
Direct Comm’l Sale
Cooperative MOUs
Other
Interagency process
Other
DoD
Components
~ 500 SRDs/yr
NSA and NGA
based on specialized authorities
~ High Level Decisions (HLDs) & Top Level Decisions (TLDs)/yr
~ 85K RDs /yr
OSD Staff & DoD Component
‘Core TSFD’
Routine TSFD Decisions
based on delegated authority
~500 Specialized
Routine Decisions (SRDs)/ yr
~ 85,000 Routine Decisions (RDs)/ yr 8

9. TS&FD Reform Background
DSD established Technology Security and Foreign Disclosure Review Group (TS&FD RG) in July 2010 based on an Export Control reform report recommendation
DSD approved ‘Phase I’ TS&FD RG Findings & Recommendations on Dec 20, 2010 with key follow-up actions:
Establish TS&FD Office (TSFDO) (Feb 14, 2011)
Conduct Phase II TS&FD processing ‘trade space’ analysis and report
Implement TS&FD RG ‘Good Ideas’ on a rolling basis
SecDef concurred with this approach on Jan 5, 2011 during Security Cooperative Reform (SCR) Task Force briefing
TS&FD ‘Phase II’ Findings and Recommendations approved by DSD on Apr 15, 2011 – Implementation currently underway 9

10. New DoD TS&FD System -- Process Overview --
DTM-053: Attachment 4 10

11. TS&FD Process Transition Plan
Authority: DTM “Technology Security and Foreign Disclosure (TS&FD) Processes”
PURPOSE:
Establishes policy and assigns responsibilities for the reform of TS&FD processes to minimize process complexities, ensure timeliness and efficient processing of TS&FD release review requests; and implement holistic DoD-wide release review processes.
Provides additional guidance to the DEPSECDEF Memo “Comprehensive Review of DoD TS&FD Processes,” 22 Jul 10 and further delineates the roles and responsibilities of the ATTR SSG.
Establishes the TSFDO to serve as the central processing organization for ATTR SG review and adjudication of DoD high level decisions (HLDs) and specialized routine decisions (SRDs) that impact DoD aspects of TS&FD release requests in accordance with its missions and functions.
Initiates detailed planning for consolidation and subsequent implementation under the guidance of the ATTR SSG to DoD TS&FD authorities according to their respective member responsibilities. 11

12. DEF Background
Exportability design is rarely incorporated in AT&L programs …
Why? Because it isn’t considered or (if it is) it’s not funded
Why isn’t it considered?
Because we rarely accept the fact that systems will be exported in the future
Because we focus efforts on meeting defined U.S. warfighter JCIDS requirements rather than undefined Building Partnership Capacity (BPC) requirements
Why isn’t it funded?
Because (until FY11 & 12 NDAAs) we haven’t had clear authority to spend U.S. tax dollars “for foreign requirements”
Because we rarely have foreign funds available in early development 12

13. Defense Exportability Features SEC
Defense Exportability Features SEC. 243 FY11 NDAA w/ FY12 NDAA (para (b)) Added
SEC PILOT PROGRAM TO INCLUDE TECHNOLOGY PROTECTION FEATURES DURING RESEARCH AND DEVELOPMENT OF DEFENSE SYSTEMS. 
PILOT PROGRAM.—The Secretary of Defense shall carry out a pilot program to develop and incorporate technology protection features in a designated system during the research and development phase of such system.
COST-SHARING.—Any contract for the design or development of a system resulting from activities specified under subsection (a) for the purpose of enhancing or enabling the exportability of the system either (1) for the development of program protection strategies for the system, or (2) for the design and incorporation of exportability features into the system shall include a cost-sharing provision that requires the contractor to bear at least one half of the cost of such activities.
ANNUAL REPORTS.—Not later than December 31 of each year in which the Secretary carries out the pilot program established under this section, the Secretary shall submit to the congressional defense committees a report on the pilot program, including a list of each designated system included in the program.
TERMINATION.—The pilot program established under this section shall terminate on October 1, 2015.
DEFINITIONS.—In this section:
(1) The term “designated system” means any system (including a major system, as defined in section 2302(5) of title 10, United States Code) that the Under Secretary of Defense for Acquisition, Technology, and Logistics designates as being included in the pilot program established under this section.
(2) The term “technology protection features” means the technical modifications necessary to protect critical program information, including anti-tamper technologies and other systems engineering activities intended to prevent or delay exploitation of critical technologies in a designated system. 13

14. Building “Exportability” into US Systems
Defense Exportability Features (DEF)
7 programs (6 MDAPs and 1 non-MDAP) selected for DEF pilot program in FY11:
4 Program Offices in the process of soliciting/executing DEF feasibility studies with FY12 funding
3 programs reported to be unable to execute FY12 DEF study funding
Study funding will total approximately $1.75M out of $1.89M appropriated, with matching funding from vendors in three programs
AT&L/IC will work closely with the MILDEPs and contractors during study process and facilitate interaction with and feedback from Technology Security and Foreign Disclosure community.
DEF feasibility studies will inform DEF implementation decisions for each program 14

15. Questions? 15