Proposed ITAR Rule Amends Licensing Requirements for Replacement Parts and Incorporated Articles

On March 15, 2011, the Department of State proposed to amend Parts 123 and 126 of the International Traffic in Arms Regulations (ITAR) to reflect new policies regarding coverage of replacement parts/components and incorporated articles. 

The current rule regarding parts and components requires additional licenses for licensed end-users and end-uses for systems and components already vetted in earlier licenses. The proposed rule adds a new section (§123.28) that eliminates the requirement for a license for parts and components for systems approved in a previous license. This proposed exemption applies only to exporters specifically identified in a previously approved authorization to export the end-item in question. It would not be applicable to upgrades of capabilities of the original end-item. 

With respect to ITAR treatment of incorporated articles, the proposed new section of the ITAR (§126.19) lists three conditions under which a DDTC license is not required for the export or re-export of defense articles incorporated into an end-item that is subject to the EAR: (1) where the end-item would be "rendered inoperable" by the removal of the defense articles; (2) where no technical data for development or production are transferred with the defense article; and (3) where the incorporation of the defense article does not provide (or is not related to) a military application. 

In addition, under the proposed rule, no license is required for the export or re-export of a defense article when that article would be rendered inoperable by removal form the end-item. A license would be required for the export of defense articles that are spare or replacement parts when they are embedded into a larger assembly such that they can be removed without destroying the defense articles.