Finally—ITAR Government Exemption Expanded – and Opportunities to Comment and Contribute to Future Export Controls

State Department Expands §126.4 Government Exemption

On April 19, the Department of State, Directorate of Defense Trade Controls (DDTC) published a notice (84 FR 16398) that expands the International Traffic in Arms Regulations (ITAR) §126.4 licensing exemption for transfers made by or for an agency of the U.S. Government.  A proposed rule was originally published in 2015 and this revision, anticipated since last year, was effective immediately.

Notably, the new rule expands the exemption to include permanent exports, reexports, and retransfers.  It also clarifies when it can be used by contractors, by third parties, or in international agreements or security cooperation programs.

Please Note: The phrase “including technical data” was removed from the exemption as “defense article” is already defined at §120.6 to include technical data.  The notice states that “When the Department refers to defense articles, without modification, the reference includes technical data.”

Portions of the revised exemption (§126.4(a)(1) or (3) and (b)(1)) may be used for 126.1 countries.  As revised, §126.1(a) includes a double negative: “exemptions… except … §§126.4(a)(1) or (3) and (b)(1)… do not apply”).  As always, transactions involving 126.1 countries, even when the US government is involved, should be reviewed carefully and make sure to fully document their usage.  No one wants to be in a position of having to recreate records after a period of time.

Is this the same as the Export Administration Regulations (EAR) §740.11 GOV License Exception?  Almost, as the revised §126.4 exemption has moved closer to, but does not completely mirror, the §740.11 GOV exception.  The EAR exception has a different structure and more uses, including non-US governments and international organizations in some circumstances.  Please read it carefully and the full text of the Federal Register Notice for additional background.

We Finally Have It!!!—Be Sure to Review and Comment on Proposed DS-7788 Single Application Form

On April 19, 2019, the Department of State, Directorate of Defense Trade Controls (DDTC) published a notice (84 FR 16554) requesting comments on the proposed DS-7788 Application for the Permanent Export, Temporary Export, Temporary Import, or Brokering of Defense Articles, Defense Services, and Related Technical Data.  The new form would consolidate existing forms including: DSP-5, DSP-61, DSP-73 and DSP-85 license applications; DSP-6, DSP-62, and DSP-74 license amendments; and proposed forms for changes in end use and brokering.

The proposed “single” form and instructions can currently be downloaded from the DDTC website in nine separate pdfs.

Comments will be accepted until June 19, 2019.  See the Federal Register Notice for more information.

This is an important opportunity to comment on how the proposed licensing changes would impact your business.

Space Enterprise Summit

The Departments of State and Commerce will co-host the Space Enterprise Summit on June 26-27, 2019.  Topics will include the government’s role in stimulating and regulating commercial space activity as well as international collaboration and responsible behavior.

The event will take place in the Loy Henderson Conference Room, Department of State, 2201 C Street Northwest, Washington, DC.

For more information, see the Federal Register Notice (84 FR 13737) or the Space Enterprise Summit webpage.

Commerce Seeks Technical Advisory Committee Representatives

The Department of Commerce, Bureau of Industry and Security (BIS), Department of Commerce is recruiting representatives from industry, academia, and the U.S. government to serve on one of seven Technical Advisory Committees (TACs).  These committees advise the Department of Commerce on the technical parameters and administration of dual-use export controls.

The TACs advise on the following areas:

  1. Information Systems: Categories 3 (electronics), 4 (computers), and 5 (telecommunications and information security);
  2. Materials: Category 1 (materials, chemicals, microorganisms, and toxins);
  3. Materials Processing Equipment: Category 2 (materials processing);
  4. Sensors and Instrumentation: Category 6 (sensors and lasers);
  5. Transportation and Related Equipment TAC: Categories 7 (navigation and avionics), 8 (marine), and 9 (propulsion systems, space vehicles, and related equipment);
  6. Emerging Technology: identification of emerging and foundational technologies; and
  7. Regulations and Procedures: Export Administration Regulations (EAR) and EAR implementation.

Resumes must be submitted before April 1, 2020 and TAC members must obtain secret-level clearances prior to their appointment.  See their Federal Register Notice (84 FR 12195) for more information.

(None of the information is intended to be authoritative official or professional legal advice. Consult your own legal counsel or compliance specialists before taking actions based upon this blog or other unofficial sources.)