SCHUMER SAYS TIME IS RUNNING OUT FOR FEDS TO FINALIZE RULE THAT ALLOWS PHOTONICS COMPANIES TO SELL HIGH-TECH PRODUCTS FOR NON-MILITARY USES OVERSEAS; URGES FEDS TO IMMEDIATELY IMPLEMENT RULE BEFORE IT’S TOO LATE

Previously, Proposed Fed Rule Would Have Put Optics & Photonics Products On Restrictive Export Control List, Preventing Companies From Bringing High-Tech Products To Foreign Markets

Schumer Successfully Urged Feds To Go Back & Revise Rule To Ensure Photonics Industry Would Not Be Disadvantaged By Overly Restrictive Regulations

Schumer: We Can’t Risk A Photonics Fumble On The 1-Yard Line

U.S. Senator Charles E. Schumer today urged four federal agencies to expeditiously finalize the newly rewritten rule that is critical to ensuring the optics and photonics industries can sell their products overseas and continue to expand and support more good paying jobs in New York. The current rules undermine the ability of Rochester’s photonics and optic industries to compete globally. In 2015, the Department of Commerce and Department of State proposed a federal rule that would have continued restrictive limits on optics and photonics exports and effectively prevented the American photonics and optics industry’s from selling certain non-security sensitive components in foreign markets. The restrictive proposed rule came after Schumer successfully aided Rochester’s efforts to become the new American Institute for Manufacturing (AIM) Photonics hub in July 2015. Schumer then went to bat for Rochester optics and photonics companies and successfully pushed federal agencies to rewrite the proposed export rule. Now that a rewritten final rule has been put forward, with the seal of approval from the optics and phonics industries, Schumer is urging the Commerce Department and State Department – along with the Department of Defense and the Office of Management and Budget – to all finalize this rule before time runs out within the current Administration. The rewritten rule is undergoing an interagency review process at the Office of Management and Budget (OMB).

“The companies that are fueling our burgeoning photonics and optics industries in Rochester – like the new AIM Photonics hub – are actively looking to expand and create jobs by tapping into markets across the world. But allowing overly restrictive controls on the export of optics and photonics products to stay in place would be disastrous for Rochester,” said Schumer. “Getting the federal government to go back to the drawing board and rewrite these rules last year was the first critical step. But we can’t risk a fumble on the one-yard line, and the clock is ticking. We need to finalize these rules now. I’m urging these federal agencies to sign on the dotted line ASAP, so we can ensure these thriving industries are not forced to move production overseas or cut jobs just as they gain steam.”

The Rochester Regional Photonics Cluster (RRPC) and its member companies like Optimax first brought their concerns to Schumer last summer. Schumer said, given the fact that Rochester photonics companies like Optimax are poised to compete globally, grow and create jobs, now is the time to finalize this rule. The optics and photonics industries produce cutting-edge military and commercial technology, employing over 125,000 people at over 900 companies nationwide, including over 15,000 workers across 100 companies based in the greater Rochester area. Schumer said these companies need to be assured that the current restrictive and antiquated export regulations will be revamped this year so that they can compete globally in their rapidly advancing field. Any further delays by federal agencies, Schumer argued, could jeopardize the implementation of this rule before the end of the current Administration, which would hinder years of work to craft these new balanced regulations and could further harm these industries.

Schumer explained that the previously proposed rule, if implemented, would have left the optics and photonics labs in Rochester unable to export certain products around the world. Specifically, the rule aimed to place certain products on an export control list that would have put strict limits on the type of products that could be exported. Schumer said this rule was misguided as optics and photonics technology can be used for commercial, non-military purposes, including in life-saving healthcare products. Implementing the rule would have put this industry as a significant competitive disadvantage and force optics and photonics production overseas.

Schumer said that the previous proposed rule would have subjected companies like those in Rochester, which produce lasers and infrared components in devices for commercial, non-military use, to unfair regulations that could greatly inhibit their international competitiveness and business opportunities. 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. Under the proposed rule, companies in the Rochester- Finger Lakes region, like Optimax Systems, Inc. – which is a manufacturer of precision optics located in Wayne County New York – would have been negatively impacted. Optimax employs more than 250 people and produces photonics components for defense, semiconductor, medical and aerospace markets, which includes producing the camera lenses for the Mars Rovers and the Pluto probe called New Horizons.

Therefore, in July 2015, 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 U.S. Munitions List (USML) and which could fall under the less restrictive Commerce Control List (CCL). In September 2015, following Schumer’s push, these federal agencies agreed to go back to the drawing board and revise this rule so as to not threaten the optics and photonics industry, which has experienced significant growth in Rochester. Schumer said this would protect sensitive technology and national security interests, while ensuring optics and photonics products can be exported around the world.

Tom Battley, Executive Director of the Rochester Regional Photonics Cluster said, “We appreciate Senator Schumer’s support for our photonics and optics industry to ensure this new revised regulation is approved in time so that our Rochester optics, photonics, and imaging companies aren’t inadvertently blocked from exporting non-military products to their customers overseas.”

Schumer has long fought to bring the photonics industry the resources it needs, particularly in Upstate NY. Beginning more than three years ago, Schumer lead the federal push that culminated in the Department of Defense (DoD) selecting the Rochester, NY headquartered AIM Photonics proposal as the winner of the DoD’s largest Institute of Manufacturing Innovation (IMI). This win was the culmination of a multi-year effort by Schumer beginning in February 2013 when, he joined local experts in Rochester’s optics technology and high-tech manufacturing industry at the Eastman Business Park to launch the first-ever plan to create a national network of manufacturing hubs, with the aim of bringing one to Upstate New York. Schumer said that many areas in Upstate New York, including Rochester – with its Rochester Regional Photonics Cluster, Rochester Institute of Technology, and University of Rochester, in combination with SUNY Polytechnic's expertise in nanoscale electronics, the packaging of chips, and photonics – would be a perfect fit to secure funding to establish this new photonics IMI. In October 2014 Schumer announced the Administration had picked Photonics as topic of this latest IMI competition and he pledged to push for a NYS-led applicant.

In January 2014, Schumer announced that, following their push, the DOD had selected the joint New York application as one of the finalists. In April 2015, Schumer urged the DOD in a personal meeting with DoD Secretary Ash Carter to select the New York-led application. Furthermore, on July 22, 2015 Schumer announced that following this push, the DoD selected the New York- Rochester AIM Photonics proposal as the winner of the $110M Federal Institute, making the AIM Photonics institute in Rochester a reality. The program is being led by the Department of Defense and institutions in New York State, which are currently working to create a nationwide ecosystem of private sector, government and academic partners that can leverage existing U.S. based expertise and industrial assets to launch leapfrog advancements in new cutting edge technologies, like integrated photonics. The center will focus on developing various integrated photonics products, some of which were at risk of being unable to access foreign markets if the proposed rule was implemented.

A copy of Schumer’s letter to the Commerce Department, State Department, Department of Defense and the Office of Management and Budget appears below:

Dear Secretary Pritzker, Secretary Kerry, Secretary Carter and Director Donovan:

I write to support the expeditious completion of the proposed rules to update U.S. Munitions List (USML) Category XII and the Commerce Control List (CCL) regulations. The optics and photonics industries in my state have informed me that current regulations are undermining their ability to compete globally. The proposed final rules governing the export of optics and photonics technologies would enable these industries to export their commercial components for years to come, as well as grow and hire more employees. It is critically important that these rules be finalized as soon as possible.

The U.S. optics and photonics industries in New York are concerned that if the USML Category XII and the bookend CCL rules fail to be finalized, they would be left with current regulations that inhibit their ability to sell their products abroad. The optics and photonics industries produce cutting-edge military and commercial technology employing over 125,000 people at over 900 companies nationwide, including over 15,000 workers across 100 companies based in the greater Rochester, New York, area. These industries are concerned that the continuance of the current restrictive and antiquated export regulations could have the unfortunate effect of driving U.S. production abroad.

I commend the State Department and Commerce Department for their work on the proposed USML Category XII and CCL rules, which were recently submitted to the Office of Management and Budget (OMB) for inter-agency review. These rules are the culmination of many years of collaboration between industry, academia and the agencies governing the export control system. They are carefully devised to protect our sensitive military technology and prevent unfair barriers for exporting commercial components in rapidly advancing industries. The implementation of these rules would be a vital step in assuring that the optics and photonics industries can sell their commercial components in markets worldwide and continue to grow and support more good paying jobs in New York and around the country. Any further delays could jeopardize the implementation of these rule before the end of the current Administration, which would hinder years of work to craft these new balanced regulations and could further harm these industries.

Again, I urge your agencies to expeditiously finalize the proposed Category XII rules. We must ensure that U.S. industries are not unduly harmed by static regulations. Thank you for your time and attention on this important issue.

Sincerely,

Charles E. Schumer