State Seeks Comments on Proposed Changes to ITAR re: Defense Services

On April 13, 2011, the Department of State (DOS) proposed to amend parts 120 and 124 of the International Traffic in Arms Regulations (ITAR) to update the policy regarding defense services, to clarify the scope of activities that are considered a defense service, and to provide definitions of "Organizational-Level Maintenance," "Intermediate-Level Maintenance," and "Depot-level Maintenance," and to make other conforming changes. 

After review of the ITAR, DOS determined that the current definition of defense services in §120.9 is overly broad, capturing certain forms of assistance or services that do not warrant ITAR control. The proposed change in subpart (a) of the definition of "defense services" narrows the focus of services to furnishing of assistance (including training) using "other than public domain data", integrating of items into defense articles, or training of foreign forces in the employment of defense articles. The proposed definition also includes a new provision that would control the "integration" of items, whether controlled by the U.S. Munitions List (USML) or the Commerce Control List (CCL), into USML controlled defense articles even if ITAR-controlled "technical data" is not provided to a foreign person during the provision of such services. 

Under the new rule, training for foreign "units or forces" of §120.9(a)(3) will be considered a defense service only if the training involves the employment of a defense article, regardless of whether technical data is involved. In §120.9(b), the proposed rule specifies examples of activities that do not constitute defense services. 

A new §120.38 proposes to provide definitions for "Organizational-Level Maintenance" (or basic level maintenance), "Intermediate-Level Maintenance," and "Depot-Level Maintenance," terms used in the proposed revision of §120.9.

DOS proposed to make several other conforming changes to the ITAR. The proposed rule modifies §124.1(a) which describes the approval requirements of manufacturing license agreements and technical assistance agreements. The proposed change removes the requirement in §124.1(a) to seek the Directorate of Defense Trade Controls' (DDTC) approval if the defense service that is being rendered uses public domain data or data otherwise exempt from ITAR licensing requirements. 

Comments to the DOS are due by June 13, 2011.