State Amends ITAR to Include Eritrea on Prohibited Exports List
10/06/08 12:05 AM
On
October 6, 2008, the U.S. Department of State published a
final rule amending
the International Traffic in Arms Regulations (ITAR) with respect
to Eritrea. The U.S. Department of State has added Eritrea to its
regulations on prohibited exports and sales to certain countries as
a result of Eritrea’s designation as country not cooperating fully
with antiterrorism efforts.
This rule is effective October 3, 2008.
This rule is effective October 3, 2008.
Retired Professor Convicted of Arms Export Violations
09/05/08 09:44 PM
On September 3, 2008, Dr. J. Reece
Roth, a retired University of Tennessee (UT) professor, was
found guilty of conspiracy to violate the Arms
Export Control Act (AECA) and fifteen separate violations of
illegally exporting sensitive information relating to a U.S. Air
Force research and development contract. The information concerned
plasma technology to be used in the construction of drones under
the U.S. Air Force contract.
The AECA prohibits transfer of defense-related materials, including technical data, to a foreign national without permission. Dr. Roth was convicted of conspiring with Atmospheric Glow Technology, Inc. (AGT), a Knoxville, Tennessee, technology company, with unlawfully transferring fifteen different "defense articles" to a graduate student, a national of China, in violation of the AECA. As part of a plea agreement, AGT recently pleaded guilty to 10 counts of exporting defense-related materials. Sentencing in that case in still pending.
Roth testified last week that he didn’t break the law because the prosecution had not proved that the research was successful, reports the Associated Press. "My understanding was that it only applied to things that worked, and we had not shown that. We had a lot of work to do," Roth testified.
Roth was also accused of taking reports and related studies in his laptop to China during a lecture tour in 2006, and having one report e-mailed to him there through a Chinese professor's Internet connection.
The government seized materials from Roth's office and took his laptop from him at the airport when he returned from the trip. Prosecutors claimed he violated the export control act simply by taking the laptop with sensitive materials outside the country even if, as forensic evidence showed, he didn't open all of those files while he was in China.
"Today's guilty verdict should serve as a warning to anyone who knowingly discloses restricted U.S. military data to foreign nationals," said Patrick Rowan, Acting Assistant Attorney General for National Security. United States Attorney Russ Dedrick said, "Our scientific and educational communities must take precautions to insure that technology and research are protected, when required, from disclosure to foreign governments."
The maximum punishment for the conspiracy to violate AECA is five years imprisonment and a fine of $250,000. The maximum penalty for each of the AECA offenses is 10 years imprisonment, a criminal fine of $1,000,000, and a mandatory special assessment of $100 for each offense. Dr. Roth's sentencing has been set for January 7, 2009, in United States District Court in Knoxville.
The AECA prohibits transfer of defense-related materials, including technical data, to a foreign national without permission. Dr. Roth was convicted of conspiring with Atmospheric Glow Technology, Inc. (AGT), a Knoxville, Tennessee, technology company, with unlawfully transferring fifteen different "defense articles" to a graduate student, a national of China, in violation of the AECA. As part of a plea agreement, AGT recently pleaded guilty to 10 counts of exporting defense-related materials. Sentencing in that case in still pending.
Roth testified last week that he didn’t break the law because the prosecution had not proved that the research was successful, reports the Associated Press. "My understanding was that it only applied to things that worked, and we had not shown that. We had a lot of work to do," Roth testified.
Roth was also accused of taking reports and related studies in his laptop to China during a lecture tour in 2006, and having one report e-mailed to him there through a Chinese professor's Internet connection.
The government seized materials from Roth's office and took his laptop from him at the airport when he returned from the trip. Prosecutors claimed he violated the export control act simply by taking the laptop with sensitive materials outside the country even if, as forensic evidence showed, he didn't open all of those files while he was in China.
"Today's guilty verdict should serve as a warning to anyone who knowingly discloses restricted U.S. military data to foreign nationals," said Patrick Rowan, Acting Assistant Attorney General for National Security. United States Attorney Russ Dedrick said, "Our scientific and educational communities must take precautions to insure that technology and research are protected, when required, from disclosure to foreign governments."
The maximum punishment for the conspiracy to violate AECA is five years imprisonment and a fine of $250,000. The maximum penalty for each of the AECA offenses is 10 years imprisonment, a criminal fine of $1,000,000, and a mandatory special assessment of $100 for each offense. Dr. Roth's sentencing has been set for January 7, 2009, in United States District Court in Knoxville.
Trial Begins for Retired Professor Charged with ITAR Violations
08/25/08 10:26 PM
On August 25, 2008, J. Reece Roth,
a retired University of Tennessee (UT) physics professor went on
trial charged with violating the Arms Export Control Act (AECA). As
reported by USA Today, prosecutors allege Roth violated
AECA by allowing two UT students, one from China and another from
Iran, unrestricted access to information about the technology used
in an U.S. Air Force project. The professor is also said to have
taken documents relating to that project on his trip to China in
2006.
The Air Force contract involved developing lightweight flight control system technology for use in unmanned air vehicles, otherwise known as drones. According to USA Today, Atmospheric Glow Technologies (AGT), with Roth as a consultant and subcontractor, promised a control system that would use plasma, rather than mechanical flaps, to lift the aircraft. Roth, an expert in plasma technology, was one of the founders of AGT, but later the company went public. The company specialized in use of plasma technology that was developed by UT.
AECA bars the transfer of sensitive information to foreign nationals without permission. Roth came under investigation in 2006 when UT export-control officials discovered his use of foreign nationals in his UT lab on the military contract. Government agents searched his office and seized his laptop computer when he returned from a lecture trip to China in May of 2006.
On August 20, 2008, AGT pleaded guilty to 10 counts of AECA violations from late 2004 to May 2006, reports the Knoxville News Sentinel. AGT, which is in bankruptcy, still faces probation and a maximum fine of $1 million for each AECA violation. Knoxville News Sentinel reports that, as part of the plea agreement, AGT’s board of directors now admits company officials knew Roth had allowed the China national access to information on the Air Force project without notifying the Department of Defense.
Daily updates on the trial can be found at www.knoxnews.com.
The Air Force contract involved developing lightweight flight control system technology for use in unmanned air vehicles, otherwise known as drones. According to USA Today, Atmospheric Glow Technologies (AGT), with Roth as a consultant and subcontractor, promised a control system that would use plasma, rather than mechanical flaps, to lift the aircraft. Roth, an expert in plasma technology, was one of the founders of AGT, but later the company went public. The company specialized in use of plasma technology that was developed by UT.
AECA bars the transfer of sensitive information to foreign nationals without permission. Roth came under investigation in 2006 when UT export-control officials discovered his use of foreign nationals in his UT lab on the military contract. Government agents searched his office and seized his laptop computer when he returned from a lecture trip to China in May of 2006.
On August 20, 2008, AGT pleaded guilty to 10 counts of AECA violations from late 2004 to May 2006, reports the Knoxville News Sentinel. AGT, which is in bankruptcy, still faces probation and a maximum fine of $1 million for each AECA violation. Knoxville News Sentinel reports that, as part of the plea agreement, AGT’s board of directors now admits company officials knew Roth had allowed the China national access to information on the Air Force project without notifying the Department of Defense.
Daily updates on the trial can be found at www.knoxnews.com.
DDTC Publishes Notice & FAQs on License Support Documentation
08/13/08 01:22 PM
On August 7, 2008, the State
Department's Directorate of Defense Trade Controls (DDTC) published
an updated notice on license support documentation.
In the notice, DDTC states:
The FAQ questions can be found here.The purpose of this requirement is to confirm the legitimacy of the transaction, including the roles and responsibilities of all the parties. DTCL has received with increasing frequency supporting documentation that calls into question whether the applicants are in a position to fulfill their responsibilities as registered exporters and, in fact, whether anyone at the companies could meet the obligations as empowered officials under Section 120.25. In these instances, the applications have been Returned Without Action advising the applicants of the ITAR requirements. At this time, DTCL finds it prudent to iterate to exporters of defense articles the fundamental ITAR requirement for supporting documentation.
State Department Limits ITAR Registration to 1 Year
07/18/08 09:22 PM
On July 18, 2008, the U.S.
Department of State published a final rule in the Federal
Register which amends the International
Traffic in Arms Regulations (ITAR). The final rule is effective on
July 18, 2008 and revises the validity period for registration to
one year (from up to 2 years) and limits the time frame in which a
registration may be renewed. A registrant must now submit its
request for renewal of its registration at least 30 days prior to
the expiration of the registration, but no earlier than 60 days
prior to the expiration date.
The amended regulation follows:
Sec. 122.3 Registration fees.
(a) A person who is required to register may do so for a period of 1 year upon submission of a completed Form DS-2032, transmittal letter and payment of $1,750.
(b) Expiration of registration. A registrant must submit its request for registration renewal at least 30 days but no earlier than 60 days prior to the expiration date.
The amended regulation follows:
Sec. 122.3 Registration fees.
(a) A person who is required to register may do so for a period of 1 year upon submission of a completed Form DS-2032, transmittal letter and payment of $1,750.
(b) Expiration of registration. A registrant must submit its request for registration renewal at least 30 days but no earlier than 60 days prior to the expiration date.
State/DDTC Updates Guidance Documents
07/07/08 11:45 AM
On July 1 - 3, 2008, the State
Department's Directorate of Defense Trade Controls (DDTC) updated
its website with new guidance documents.
Specifically, the DDTC posted updated Agreements Guidelines
on July 1,
2008; a listing of countries by DoS regional
bureaus, licensing review
checklists,
and updated licensing FAQs
on July 2, 2008; and
updated its DDTC Outreach page on July 3, 2008.
Retired Professor Indicted on 16 Counts for ITAR Violations
05/21/08 04:18 PM
On May 20, 2008, the
Department of Justice announced that a federal grand
jury returned an 18 count indictment charging J. Reece Roth, a
professor emeritus who headed University of Tennessee's Plasma
Sciences Lab, and Atmospheric Glow Technologies, Inc. (AGT), a
Knoxville-based company Roth helped found, of conspiring to defraud
the U.S. Air Force and disclose restricted U.S. military data about
unmanned aerial vehicles (UAV) or "drones" to foreign nationals
without first obtaining the required U.S. government license or
approval. (The indictment is available here on Clif Burns' Export
Law Blog.) Graduate students from China and Iran are alleged to
have been given unfettered access to controlled
technology.
Roth, who is 70 and now retired, was charged with one count of conspiracy to defraud the U.S. Air Force and violate the Arms Export Control Act (AECA); 15 counts of violating the AECA; and one count of wire fraud for defrauding the University of Tennessee. AGT is charged in the indictment with one count of conspiracy to defraud the U.S. Air Force and violate the AECA and 10 counts of violating the AECA.
The DOJ announcement states that:
Violations of the AECA carry a maximum possibly penalty of 10 years imprisonment and a $1 million fine. Wire fraud carries a maximum penalty of 20 years imprisonment and a $250,000 fine and conspiracy carries a maximum penalty of 5 years imprisonment and a $250,000 fine.
Roth, who is 70 and now retired, was charged with one count of conspiracy to defraud the U.S. Air Force and violate the Arms Export Control Act (AECA); 15 counts of violating the AECA; and one count of wire fraud for defrauding the University of Tennessee. AGT is charged in the indictment with one count of conspiracy to defraud the U.S. Air Force and violate the AECA and 10 counts of violating the AECA.
The DOJ announcement states that:
United States Attorney Russ Dedrick said, “The protection of United States technology is a continuing priority of the Department of Justice and this District. Whenever restricted U.S. military data is illegally disclosed to foreign nationals, America’s security is put at risk. Today’s indictment demonstrates just how seriously we view such violations.”According to the indictment, between January 2004 and May 2006, Roth and AGT engaged in a conspiracy to defraud the U.S. Air Force and transmit export-controlled technical data related to a restricted U.S. Air Force contract to develop plasma actuators for a munitions-type UAV, or “drone,” to one or more foreign nationals, including a citizen from the People’s Republic of China. The Chinese national was a graduate research assistant at the University of Tennessee. The University of Tennessee was victimized by the conspirators and cooperated throughout with the Federal Bureau of Investigation (FBI) led federal investigation.
Violations of the AECA carry a maximum possibly penalty of 10 years imprisonment and a $1 million fine. Wire fraud carries a maximum penalty of 20 years imprisonment and a $250,000 fine and conspiracy carries a maximum penalty of 5 years imprisonment and a $250,000 fine.
State Department Website Updates
04/30/08 12:40 AM
On April 28, 2008 and April 22,
2008, the State Department published several updates to its
website.
On April 28, 2008, the following updates were published:
On April 22, 2008, the following updates were published:
On April 28, 2008, the following updates were published:
- Updated DSP-73 and DSP-61 License Applications - Supporting Documentation Requirements
- Updated DSP-73 and DSP-61 Support Documentation FAQs
- Updated Notice on License Support Documentation
- FAQs Notice on License Support Documentation
On April 22, 2008, the following updates were published:
Chinese Grad Student Involvement Leads to Criminal Case: Physicist Pleads Guilty to ITAR Violation
04/16/08 01:08 AM
On April 15, 2008, the Department
of Justice announced that Daniel Max Sherman, a
physicist who formerly worked as the director of plasma research at
Atmospheric Glow Technologies, Inc., a Knoxville, Tennessee based
company. According the to plea agreement, between January 2004 and
May 2006, Sherman and J. Reece Roth, a Professor Emeritus at the
University of Tennessee, engaged in a conspiracy to transmit export
controlled technical data related to a restricted U.S. Air Force
contract to develop plasma actuators for munitions-type Unmanned
Aerial Vehicle (UAV) or "drones", to a foreign national from the
People's Republic of China.
The Chinese national was a graduate research assistant at the University of Tennessee. The DOJ reported that the University of Tennessee was victimized by the conspirators and cooperated throughout the FBI-led investigation.
Mr. Roth has not been charged in the case. The investigation of Mr. Roth has been watched closely by those in academics since May 2006 when it was reported that Customs agents copied his laptop as he returned from a trip to China and that search warrants were executed at his office and laboratory. University officials who monitor export control compliance believe that the Tennessee case may have arisen due to the involvement of a for-profit company. The International Traffic in Arms Regulations (ITAR) exempts fundamental research done by universities that is ordinarily published and shared broadly within the scientific community. However, when a private company is involved and the research is proprietary or restricted from publication or disclosure, no exemption applies.
A report on the matter in the New York Sun contained these insights from university officials:
The Chinese national was a graduate research assistant at the University of Tennessee. The DOJ reported that the University of Tennessee was victimized by the conspirators and cooperated throughout the FBI-led investigation.
Mr. Roth has not been charged in the case. The investigation of Mr. Roth has been watched closely by those in academics since May 2006 when it was reported that Customs agents copied his laptop as he returned from a trip to China and that search warrants were executed at his office and laboratory. University officials who monitor export control compliance believe that the Tennessee case may have arisen due to the involvement of a for-profit company. The International Traffic in Arms Regulations (ITAR) exempts fundamental research done by universities that is ordinarily published and shared broadly within the scientific community. However, when a private company is involved and the research is proprietary or restricted from publication or disclosure, no exemption applies.
A report on the matter in the New York Sun contained these insights from university officials:
"If you're blurring the lines between the work you do at one place and the work you do at another, you can quickly get into trouble," Patrick Schlesinger of the University of California said. Doing only publishable research also allows universities to avoid segregating foreigners, a task that may be impractical in physical science programs where American citizen students are often a minority. "If we want to preserve that safe harbor, we also need to be very vigilant," Steven Eisner of Stanford University said. "This particular case in Tennessee will wake up the university community to export controls if they weren't aware of it already."
Political Backstory Behind Recent Presidential Export Control Directives
01/31/08 09:35 AM
On
January 31, 2008, Politico.com reported on the political lobbying
that took place prior to President Bush's issuance of directives
meant to modernize the State Department and Commerce Department's
export control activities. The report entitled, "High-Tech Lobby
Notches Victory," can be read here.
President Bush Issues Export Control Directives
01/23/08 12:54 AM
On
January 22, 2008, President Bush announced presidential directives
aimed at modernizing export controls under both the ITAR and the
EAR. In a brief statement, the White House said the package of
directives would promote a "more efficient and transparent export
licensing process."
With regard to the State Department, President Bush directed:
More Effective U.S. Export Licensing
A More Efficient Dispute Resolution Mechanism
Enhanced Enforcement
With regard to the Commerce Department, the Presidential directive recommended:
• Maintaining a Validated End User program to ease exports to “reliable foreign companies,” while imposing additional scrutiny on exports to less favored foreign buyers.
• Conducting regular updates of the export controls on dual-use items.
• Revising rules on intra-company transfers of sensitive items.
• Revising rules restricting the export of encryption products.
• Reviewing re-export controls.
• Increasing transparency by publishing advisory opinions on the Internet and listing foreign parties that warrant higher scrutiny.
With regard to the State Department, President Bush directed:
More Effective U.S. Export Licensing
- Additional financial resources and intelligence support will be made available for the timely adjudication of defense trade licenses.
- Guidelines will be issued that require a decision by the U.S. Government on defense trade export license applications within 60 days, absent a strong reason for additional time, such as a requirement for Congressional notification. Initial efforts in this regard have resulted in a nearly 50 percent reduction since April 2007 in the number of export license applications pending with the Department of State.
- The electronic licensing system will be upgraded to permit the submission of all types of defense trade licenses and to enable all agencies to access the same electronic information.
- The Secretary of State will update U.S. controls on exports involving dual and third country nationals from NATO and other allied countries.
A More Efficient Dispute Resolution Mechanism
- A formal interagency dispute mechanism will be created to allow for timely resolution of licensing jurisdiction issues involving the Departments of State and Commerce under the Commodity Jurisdiction (CJ) process. The National Security Council will also undertake a review to make sure the CJ process is efficient and timely.
Enhanced Enforcement
- A multi-agency working group will be established to improve procedures for conducting export enforcement investigations.
With regard to the Commerce Department, the Presidential directive recommended:
• Maintaining a Validated End User program to ease exports to “reliable foreign companies,” while imposing additional scrutiny on exports to less favored foreign buyers.
• Conducting regular updates of the export controls on dual-use items.
• Revising rules on intra-company transfers of sensitive items.
• Revising rules restricting the export of encryption products.
• Reviewing re-export controls.
• Increasing transparency by publishing advisory opinions on the Internet and listing foreign parties that warrant higher scrutiny.
GAO Report Criticizes Delays in State Department Export Licensing Process
01/04/08 12:31 AM
On
January 3, 2008, the U.S. Government Accounting Office (GAO)
released a report (dated
November 2007) entitled, "State Department Needs to Conduct
Assessments to Identify and Address Inefficiencies and Challenges
in the Arms Export Process." In 2005, GAO reported that processing
times for arms export cases had increased despite State Department
efforts to streamline its process. GAO was asked to (1) describe
recent trends in the processing of arms export cases and (2)
identify factors that have contributed to these trends. A summary
of the report can be found here and highlights of the report can be found
here.
For this report, GAO analyzed State arms export case data for fiscal year 2003 through April 30, 2007; reviewed relevant laws, regulations, and guidelines, Directorate of Defense Trade Controls (DDTC) funding and staffing information, and interviewed State and Department of Defense officials and selected arms exporters.
GAO found three key trends that indicate that DDTC's licensing process is under stress. First, the number of cases processed by DDTC increased 20% between fiscal years 2003 and 2006. Second, during the same period, median processing times almost doubled. Third, the number of open arms export cases increased 50% from about 5,000 in October 2002 to about 7,500 in April 2007, with a high of more than 10,000 cases in September 2006.
GAO is recommending that State conduct systematic analyses to help achieve efficiencies in the processing of arms export cases. State concurred with GAO's recommendations.
For this report, GAO analyzed State arms export case data for fiscal year 2003 through April 30, 2007; reviewed relevant laws, regulations, and guidelines, Directorate of Defense Trade Controls (DDTC) funding and staffing information, and interviewed State and Department of Defense officials and selected arms exporters.
GAO found three key trends that indicate that DDTC's licensing process is under stress. First, the number of cases processed by DDTC increased 20% between fiscal years 2003 and 2006. Second, during the same period, median processing times almost doubled. Third, the number of open arms export cases increased 50% from about 5,000 in October 2002 to about 7,500 in April 2007, with a high of more than 10,000 cases in September 2006.
GAO is recommending that State conduct systematic analyses to help achieve efficiencies in the processing of arms export cases. State concurred with GAO's recommendations.
ATF Annouces Final Rule to Conform with Revised ITAR
12/27/07 10:38 AM
The Bureau of
Alcohol, Tobacco, Firearms, and Explosives (ATF)
announced on
December 26, 2007 a final rule
conforming
the regulations in 27 C.F.R. Part 447
to the
revised International Traffic in Arms Regulations
(ITAR) by amending the list of
countries from which the importation of defense articles into the
United States is proscribed by adding Afghanistan and removing
South Africa and some of the sates composing the former Soviet
Union (Armenia, Azerbaijan and Tajikistan. The rule also removes
the arms embargo against the countries of Serbia and Montenegro. It
also clarifies an outdated reference to Zaire, currently known as
the "Democratic Republic of the Congo," and makes a miscellaneous
technical amendment to the regulations.
As background, the Arms Export Control Act of 1976 (AECA), 22 U.S.C. § 2778, gives the President of the United States the authority to control the import and export of defense articles and defense services. The ATF is responsible for administering the import provisions of the AECA. (The Department of State's Directorate of Defense Trade Controls is responsible for administering the export provisions of the AECA with the ITAR). Import regulations issued under this law are in 27 CFR Part 447.
As background, the Arms Export Control Act of 1976 (AECA), 22 U.S.C. § 2778, gives the President of the United States the authority to control the import and export of defense articles and defense services. The ATF is responsible for administering the import provisions of the AECA. (The Department of State's Directorate of Defense Trade Controls is responsible for administering the export provisions of the AECA with the ITAR). Import regulations issued under this law are in 27 CFR Part 447.
DDTC Amends Rules on Transfer of Technical Data
12/19/07 05:41 PM
On December 19, 2007,
the State Department's Directorate of Defense Trade Controls (DDTC)
issued a final rule
amending the
International Traffic in Arms Regulations (ITAR) to allow access to
defense articles and services to certain dual and third country
nationals under technical assistance agreements (TAAs) or
manufacturing licensing agreements (MLAs) without having to execute
individual Non Disclosure Agreements
(NDAs).
Previously, section 124.8(5) of the ITAR precluded any retransfer of defense articles (hardware or technical data) or defense services pursuant to an approved TAA/MLA to third countries or nationals of third countries unless specifically authorized in the agreement or for which prior written approval has been granted by the DDTC. The DDTC considers a third country national to be an individual from a country other than the country which is the foreign signatory to the agreement. DDTC also considers a third country national to be a dual national if he holds nationality from more than one country. In addition to citizenship, DDTC considers country of birth a factor in determining nationality.
Moreover, prior to the amendment, third country/dual nationals authorized under a TAA/MLA were required to execute NDAs prior to receiving access to the defense articles or services.
Under the amended regulations, the U.S. applicant may request further release of technical data and defense services and access to defense articles exported pursuant to or produced as a result of the TAA/MLA to third country/dual national employees of the foreign signatory who are nationals of countries that are members of the North Atlantic Treaty Organization (NATO), the European Union (EU), Australia, Japan, New Zealand, and Switzerland. These procedural changes would also apply to employees of sub-licensees authorized under the agreement. Furthermore, the execution of a NDA would no longer be required for such third country/dual nationals.
The rule is effective on December 19, 2007.
Previously, section 124.8(5) of the ITAR precluded any retransfer of defense articles (hardware or technical data) or defense services pursuant to an approved TAA/MLA to third countries or nationals of third countries unless specifically authorized in the agreement or for which prior written approval has been granted by the DDTC. The DDTC considers a third country national to be an individual from a country other than the country which is the foreign signatory to the agreement. DDTC also considers a third country national to be a dual national if he holds nationality from more than one country. In addition to citizenship, DDTC considers country of birth a factor in determining nationality.
Moreover, prior to the amendment, third country/dual nationals authorized under a TAA/MLA were required to execute NDAs prior to receiving access to the defense articles or services.
Under the amended regulations, the U.S. applicant may request further release of technical data and defense services and access to defense articles exported pursuant to or produced as a result of the TAA/MLA to third country/dual national employees of the foreign signatory who are nationals of countries that are members of the North Atlantic Treaty Organization (NATO), the European Union (EU), Australia, Japan, New Zealand, and Switzerland. These procedural changes would also apply to employees of sub-licensees authorized under the agreement. Furthermore, the execution of a NDA would no longer be required for such third country/dual nationals.
The rule is effective on December 19, 2007.
DDTC Amends Voluntary Disclosure Rules
12/14/07 09:07 PM
On December 13, 2007,
the Department of State's Directorate of Defense Trade Controls
(DDTC) published a final rule
amending the
Voluntary Disclosure provisions of the International Traffic in
Arms Regulations (ITAR). Section 127.12
of the ITAR
governs Voluntary Disclosure. The new rule amends section 127.12 in
4 major respects:
- The new rule imposes a 60-calendar day deadline after the initial notification to submit a full disclosure. Previously, there was no set time limit for a party to submit a full disclosure after an initial notification to DDTC. Under the new rule, a party may request an extension to the 60-calendar day extension, and, in certain cases, DDTC may require the requester to certify in writing that the full disclosure will be submitted within a specified time period. Failure to do any of the preceding may result in the DDTC deciding not to consider the initial notification as a mitigating factor in determining the appropriate disposition of the violation.
- The new rule requires the party making the disclosure to provide specific information including, but not limited to, names and addresses of individuals involved in the violation, and a precise description of the nature and extent of the violation.
- The new rules also require that the disclosing party describe corrective actions already undertaken that clearly identifies the new compliance initiatives implemented to address the causes of the violations set forth in the voluntary disclosure and any internal disciplinary action taken; and how these corrective actions are designed to deter those particular violations from occurring again.
- Finally, the new rules provide that, in cases of "a major violation, a systematic pattern of violations, or the absence of an effective compliance program," DDTC may require that the disclosure be signed by a "senior officer."