State Seeks Comments on Proposed Changes to ITAR re: Defense Services
04/14/11 12:54 PM
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.
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.
DDTC Issues a Proposed Rule Revising Category VII of the USML
12/10/10 02:25 PM
As
part of the President’s Export Control Reform
effort, the Department of State issued a
proposed rule
on
December 10, 2010 to amend the International
Traffic in Arms Regulations (ITAR) to revise
Category VII of the U.S. Munitions List. The
proposed rule would revise Category VII (tanks
and military vehicles) to describe more
precisely the defense articles described
therein.
The DDTC administers the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120–130). The items subject to the jurisdiction of the ITAR, i.e., ‘‘defense articles,’’ are identified on the ITAR’s U.S. Munitions List (USML) (22 CFR 121.1). The descriptions in many USML categories are general and include design intent as an element of causing an item to be controlled. The descriptions in most CCL categories are specific and generally include technical parameters as an element for causing an item to be controlled.
Both the ITAR and the EAR impose license requirements on exports and re- exports. Items not subject to the ITAR or to the exclusive licensing jurisdiction of any other set of regulations are subject to the EAR. A key part of the Administration’s Export Control Reform effort is to review and revise these two lists of controlled items to enhance national security so that they: (1) Are “tiered” consistent with the criteria the U.S. Government is establishing to distinguish the types of items that should be controlled at different levels for different types of destinations, end-uses, and end-users (“Criteria&rdquo
; (2) create a “bright line”
between the two lists to clarify
jurisdictional determinations and reduce
government and industry uncertainty about
whether particular items are subject to the
jurisdiction of the ITAR or the EAR; and (3)
are structurally “aligned” so that they later
can be combined into a single list of
controlled items.
In the process of revising the USML, articles will be screened to determine which items that are currently USML-controlled defense articles should remain on the USML, which items that are currently USML controlled defense articles could be controlled under the CCL, and which items should be subject to the EAR without a specific Export Control Classification Number (ECCN) on the CCL. This proposed rule addresses both the need for “tiering” Category VII and the need for establishing a “bright line” between the USML and the CCL so that, after application of this process to the remaining categories of the USML and meeting the statutory and other requirements of Export Control Reform, the two lists can be combined into a single list of controlled items. Prior to the completion of a single U.S. Government control list, DDTC plans to publish in the existing ITAR a final rule amending Category VII after it has reviewed and considered all comments received on this proposed rule, received interagency input and approval, and satisfied its obligations under section 38(f) of the Arms Export Control Act.
The DDTC has revised Category VII to assign all controlled defense articles under this category one of the three control Criteria, that is Tier 1 (T1), Tier 2 (T2), or Tier 3 (T3). These tier designations were made upon a government-wide assessment of the appropriate level of export control for each item based upon different types of destinations, end-uses, and end-users. As other USML categories are reviewed and revised, the same “tiering” structure is planned to be applied to the remaining USML categories.
The DDTC administers the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120–130). The items subject to the jurisdiction of the ITAR, i.e., ‘‘defense articles,’’ are identified on the ITAR’s U.S. Munitions List (USML) (22 CFR 121.1). The descriptions in many USML categories are general and include design intent as an element of causing an item to be controlled. The descriptions in most CCL categories are specific and generally include technical parameters as an element for causing an item to be controlled.
Both the ITAR and the EAR impose license requirements on exports and re- exports. Items not subject to the ITAR or to the exclusive licensing jurisdiction of any other set of regulations are subject to the EAR. A key part of the Administration’s Export Control Reform effort is to review and revise these two lists of controlled items to enhance national security so that they: (1) Are “tiered” consistent with the criteria the U.S. Government is establishing to distinguish the types of items that should be controlled at different levels for different types of destinations, end-uses, and end-users (“Criteria&rdquo
; (2) create a “bright line”
between the two lists to clarify
jurisdictional determinations and reduce
government and industry uncertainty about
whether particular items are subject to the
jurisdiction of the ITAR or the EAR; and (3)
are structurally “aligned” so that they later
can be combined into a single list of
controlled items.
In the process of revising the USML, articles will be screened to determine which items that are currently USML-controlled defense articles should remain on the USML, which items that are currently USML controlled defense articles could be controlled under the CCL, and which items should be subject to the EAR without a specific Export Control Classification Number (ECCN) on the CCL. This proposed rule addresses both the need for “tiering” Category VII and the need for establishing a “bright line” between the USML and the CCL so that, after application of this process to the remaining categories of the USML and meeting the statutory and other requirements of Export Control Reform, the two lists can be combined into a single list of controlled items. Prior to the completion of a single U.S. Government control list, DDTC plans to publish in the existing ITAR a final rule amending Category VII after it has reviewed and considered all comments received on this proposed rule, received interagency input and approval, and satisfied its obligations under section 38(f) of the Arms Export Control Act.
The DDTC has revised Category VII to assign all controlled defense articles under this category one of the three control Criteria, that is Tier 1 (T1), Tier 2 (T2), or Tier 3 (T3). These tier designations were made upon a government-wide assessment of the appropriate level of export control for each item based upon different types of destinations, end-uses, and end-users. As other USML categories are reviewed and revised, the same “tiering” structure is planned to be applied to the remaining USML categories.
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.
North Korea to Remain on the State Sponsors of Terrorism List
08/26/08 10:58 PM
On
August 25, 2008, after the U.S. refused to remove
North Korea from the State
Sponsors of Terrorism
List, North Korea
announced it has stopped disabling its nuclear
reactor complex and will consider rebuilding.
The statement comes two months after North Korea released the report of its plutonium programs and detonated the reactor’s cooling tower, reports the Washington Post. These actions prompted statements by the Bush administration that the U.S. will remove North Korea from the State Terrorism List and will lift some trade sanctions.
However, on August 11, 2008, the United States refused to remove North Korea from the list, citing slow progress and refusal to permit outside experts to verify the scope of the nuclear program.
The work to disable the Yongbyon nuclear reactor complex stopped on August 14, 2008, according to a statement issued by North Korea’s Ministry of Foreign Affairs. The official Korean Central News Agency added that the country will consider rebuilding the nuclear plant to its original state. U.S. officials note, however, that the plant has been substantially dismantled under the supervision of outside nuclear technicians and it would take at least a year to restore it to its operation.
North Korea entered into agreement with the U.S. in 2007 to abandon its nuclear program. North Korea promised to start by disabling the Yongbyon plant and detailing the scope of its nuclear program. In return, the U.S. promised aid and removal from the terrorism list. Removal from the list would mean lifting of the associated sanctions.
The Bureau of Industry and Security (BIS) has published Q &A for exporters on the Rescission of North Korea from the State Sponsor of Terrorism List, which can be found here. The Q&A also details general export to North Korea licensing requirements.
The statement comes two months after North Korea released the report of its plutonium programs and detonated the reactor’s cooling tower, reports the Washington Post. These actions prompted statements by the Bush administration that the U.S. will remove North Korea from the State Terrorism List and will lift some trade sanctions.
However, on August 11, 2008, the United States refused to remove North Korea from the list, citing slow progress and refusal to permit outside experts to verify the scope of the nuclear program.
The work to disable the Yongbyon nuclear reactor complex stopped on August 14, 2008, according to a statement issued by North Korea’s Ministry of Foreign Affairs. The official Korean Central News Agency added that the country will consider rebuilding the nuclear plant to its original state. U.S. officials note, however, that the plant has been substantially dismantled under the supervision of outside nuclear technicians and it would take at least a year to restore it to its operation.
North Korea entered into agreement with the U.S. in 2007 to abandon its nuclear program. North Korea promised to start by disabling the Yongbyon plant and detailing the scope of its nuclear program. In return, the U.S. promised aid and removal from the terrorism list. Removal from the list would mean lifting of the associated sanctions.
The Bureau of Industry and Security (BIS) has published Q &A for exporters on the Rescission of North Korea from the State Sponsor of Terrorism List, which can be found here. The Q&A also details general export to North Korea licensing requirements.
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.
President Changes North Korea's Designations
07/02/08 03:11 PM
On
June 26, 2008, President Bush announced the lifting
of the application of the Trading with the Enemy
Act (TWEA) with respect to the Democratic People's
Republic of Korea (DPRK or North Korea), and
notified Congress of his intent to rescind North
Korea's designation as a State Sponsor of Terrorism
(SST), which triggers a 45-day congressional
notification period prior to formal rescission of
the designation. The Executive Order can be
found here and the State
Department's press release can be found
here.
This presidential action was taken following North Korea's submission of a declaration of its nuclear programs, which will now be subject to verification, by the Six Parties. The Six Party talks has been a series of meetings with six party states: the People's Republic of China, the Republic of Korea (South Korea), North Korea, the United States, the Russian Federation, and Japan, which were the result of North Korea's withdrawal from the Nuclear Non-Proliferation Treaty in 2003.
The Administration plans to carry out North Korea's rescission from the SST list only after the Six Parties reach agreement on acceptable verification principles and acceptable verification protocol regarding North Korea's nuclear activities; the Six Parties have established an acceptable monitoring mechanism; and verification activities have begun.
This presidential action was taken following North Korea's submission of a declaration of its nuclear programs, which will now be subject to verification, by the Six Parties. The Six Party talks has been a series of meetings with six party states: the People's Republic of China, the Republic of Korea (South Korea), North Korea, the United States, the Russian Federation, and Japan, which were the result of North Korea's withdrawal from the Nuclear Non-Proliferation Treaty in 2003.
The Administration plans to carry out North Korea's rescission from the SST list only after the Six Parties reach agreement on acceptable verification principles and acceptable verification protocol regarding North Korea's nuclear activities; the Six Parties have established an acceptable monitoring mechanism; and verification activities have begun.
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:
GAO Issues Report Critical of State and Commerce's Export Control Functions
04/25/08 11:43 PM
The
U.S. Government Accountability
Office (GAO) issued
a report entitled,
"Export Controls: State and Commerce Have Not
Taken Basic Steps to Better Ensure U.S.
Interests Are Protected" on April 24, 2008. A
summary can be found here and
highlights here.
In the report, the GAO found export licensing inefficiencies, poor interagency cooperation, and limits in the Departments of State's and Commerce's ability to provide a sound basis for changes to the system. In November 2007, the GAO reported that procedural and automation weaknesses, along with workforce challenges, created inefficiencies in State's arms export licensing process. The GAO noted that in less than 4 years, median processing times for license applications nearly doubled (from 14 days in 2003 to 26 days in 2006), with State's backlog of open cases peaking at 10,000.
Specifically, the GAO found procedural weaknesses in that the State Department lacked screening procedures to promptly identify those cases needing interagency review. The GAO also found that State also lacked procedures to expedite certain cases such as exports to the UK and Australia and those to support Operations Iraqi Freedom and Enduring Freedom, as required by law. The GAO also found electronic processing problems with State's D-Trade system and that State has faced challenges in establishing and retaining a sufficient workforce with the experience and skills needed to efficiently and effectively process arms export applications.
In response to these findings, State has informed the GAO that it (1) has implemented procedures to more quickly determine whether referrals to other agencies are needed and instituted senior level reviews of cases that are over 60 days old, (2) is planning future D-Trade upgrades that are expected to facilitate case reviews by licensing officers and allow managers to better oversee the processes, and (3) has restructured its licensing divisions to ensure a more equitable distribution in the workload and skill level of licensing officers based on the GAO's analysis.
From 1998 through 2005, the GAO found that Commerce's overall median processing times have remained stable at around 40 days and are consistent with time frames established by a 1995 executive order. However, the GAO found that Commerce lacks efficiency-related measures and analyses that would allow it to identify opportunities for improvement. For example, Commerce only measures its performance in terms of how long it takes to refer an application to another agency for review but does not have efficiency-related measures for other steps in its review process, such as how quickly a license should be issued once other agencies provide their input, or for the entire process.
The GAO also found vulnerabilities in the export control system due to poor interagency coordination. The GAO noted issues relating to jurisdiction determinations between State and Commerce and license exemption determinations between State and Defense. In addition, the GAO found that State and Commerce do not receive information on criminal export control prosecution outcomes on a timely basis.
Finally, the GAO found that the absence of systematic assessments by State and Commerce limits their ability to identify problems and make improvements to the system.
The GAO concluded its report by stating that, "While the implementation of our recommendations is an important first step for improving the efficiency and effectiveness of the export control system, a sustained commitment on the part of the departments to engage in a continuous process of evaluation, analysis, and coordination is needed."
In the report, the GAO found export licensing inefficiencies, poor interagency cooperation, and limits in the Departments of State's and Commerce's ability to provide a sound basis for changes to the system. In November 2007, the GAO reported that procedural and automation weaknesses, along with workforce challenges, created inefficiencies in State's arms export licensing process. The GAO noted that in less than 4 years, median processing times for license applications nearly doubled (from 14 days in 2003 to 26 days in 2006), with State's backlog of open cases peaking at 10,000.
Specifically, the GAO found procedural weaknesses in that the State Department lacked screening procedures to promptly identify those cases needing interagency review. The GAO also found that State also lacked procedures to expedite certain cases such as exports to the UK and Australia and those to support Operations Iraqi Freedom and Enduring Freedom, as required by law. The GAO also found electronic processing problems with State's D-Trade system and that State has faced challenges in establishing and retaining a sufficient workforce with the experience and skills needed to efficiently and effectively process arms export applications.
In response to these findings, State has informed the GAO that it (1) has implemented procedures to more quickly determine whether referrals to other agencies are needed and instituted senior level reviews of cases that are over 60 days old, (2) is planning future D-Trade upgrades that are expected to facilitate case reviews by licensing officers and allow managers to better oversee the processes, and (3) has restructured its licensing divisions to ensure a more equitable distribution in the workload and skill level of licensing officers based on the GAO's analysis.
From 1998 through 2005, the GAO found that Commerce's overall median processing times have remained stable at around 40 days and are consistent with time frames established by a 1995 executive order. However, the GAO found that Commerce lacks efficiency-related measures and analyses that would allow it to identify opportunities for improvement. For example, Commerce only measures its performance in terms of how long it takes to refer an application to another agency for review but does not have efficiency-related measures for other steps in its review process, such as how quickly a license should be issued once other agencies provide their input, or for the entire process.
The GAO also found vulnerabilities in the export control system due to poor interagency coordination. The GAO noted issues relating to jurisdiction determinations between State and Commerce and license exemption determinations between State and Defense. In addition, the GAO found that State and Commerce do not receive information on criminal export control prosecution outcomes on a timely basis.
Finally, the GAO found that the absence of systematic assessments by State and Commerce limits their ability to identify problems and make improvements to the system.
The GAO concluded its report by stating that, "While the implementation of our recommendations is an important first step for improving the efficiency and effectiveness of the export control system, a sustained commitment on the part of the departments to engage in a continuous process of evaluation, analysis, and coordination is needed."