Category Archives: All

Big Changes Coming to CFIUS, EAR No Longer an Emergency

This year’s defense authorization bill didn’t just fund the Department of Defense, but also set the stage for big changes to foreign investment and export controls.  Signed on August 13, 2018, the John S. McCain National Defense Authorization Act (NDAA) included the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA) and the Export Control Reform Act (ECRA).

Foreign Investment Risk Review Modernization Act

The Foreign Investment Risk Review Modernization Act (FIRRMA) expands the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS).  CFIUS, an interdepartmental committee chaired by the Treasury Department, was already authorized to review certain business transactions involving foreign investment in the United States that involve national security considerations.

FIRRMA expands the scope of transactions subject to CFIUS review to include transactions involving foreign persons including:

  • real estate located in proximity to airports, maritime ports, or sensitive government facilities such as military bases;
  • critical infrastructure, critical technologies, or sensitive personal data of US citizens;
  • membership on the board of directors or other decision-making rights;
  • changes in a foreign investor’s rights resulting in foreign control; and
  • other transactions designed to circumvent CFIUS jurisdiction.

FIRRMA also revises filing and review processes and timelines, expanding the ordinary review period from 30 to 45 days, effective when FIRRMA became law.  Notices received before August 13th will remain subject to the 30 day review period.  FIRRMA also provides for the option for CFIUS to implement filing fees.

The most significant provisions will not be effective until the earlier of eighteen months after the enactment (February 2020) or 30 days after the Secretary of the Treasury publishes a notice that the necessary regulations and resources are in place.  CFIUS may also conduct pilot programs under the new law.

CFIUS has advised businesses to continue to notify transactions as provided in current CFIUS regulations.

The Treasury Department has released a summary of FIRRMA and FIRRMA FAQs.

The International Traffic in Arms Regulations (ITAR) continue to require notification when there are changes to ownership or control (as well as other material changes) under 122.4.  Notification of transfer of ownership or control to a foreign person is required 60 days in advance and is independent of CFIUS processes.  See the State Department’s Directorate of Defense Trade Controls Mergers/Acquisition/Divestitures page for more information.

Export Control Reform Act

The new Export Control Reform Act (ECRA) provides statutory authority for the Export Administration Regulations (EAR) and Antiboycott rules, which have been maintained by emergency executive orders under the International Emergency Economic Powers Act (IEEPA) since the Export Administration Act (EAA) expired in 1994.

Notably, the ECRA also directs the Departments of Commerce, Defense, Energy, and State to “identify emerging and foundational technologies” that may warrant export controls, including CFIUS and export licensing.

Continuing developments from the last year, the ECRA establishes a US government procurement ban on telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation.  It does not reinstate the Department of Commerce’s denial order for ZTE which was lifted in July.  The procurement ban also includes video surveillance and telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company.

The ECRA also increases potential civil penalties to $300,000 (from the most recently inflation-adjusted $295,141).

ECS will continue to monitor developments as new CFIUS regulations and the reviews of “emerging and foundational technologies” are discussed, proposed for comment, and implemented.

(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.)

A Smorgasbord of Summer Export Compliance Updates

EAR Amendment: India Eligible for STA, License Requirements Revised

On August 3, 2018 (83 FR 38018), the Department of Commerce amended the Export Administration Regulations (EAR) to reflect India’s membership in the Wassenaar Arrangement and status as a Major Defense Partner.  Under this amendment, India moves from Country Group A:6 to Country Group A:1 and A:5.  Country Group A:5 “provides the benefit of greater availability of License Exception Strategic Trade Authorization (STA) for exports and reexports to, and transfers within India under the EAR.”

The Commerce Country Chart was also amended, removing the license requirement for National Security Column 2 (NS2) for India.  The amendment also makes conforming changes related to footnotes and AES filings.  This follows updates earlier this year to reflect India’s admission to the Australia Group.

Click here for the revised Commerce Country Chart (Supplement No. 1 to Part 738).

Click here for the Strategic Trade Authorization (STA) Exception (EAR §740.20, currently starting on page 59 of the pdf).

EAR Amendment: South Sudan Arms Embargo

Also on August 3, 2018 (83 FR 38021), the Department of Commerce amended the EAR to reflect the addition of South Sudan as a prohibited destination under ITAR §126.1(w).  South Sudan is now listed in Country Group D:5: Countries subject to U.S. arms embargoes.  Because the State Department list controls, the addition of South Sudan to ITAR §126.1 in February already had this affect.  The Commerce Department amendment conforms Country Group D:5 to the current ITAR §126.1.

EAR Amendment: MTCR Conforming Changes

On August 30, 2018 (83 FR 44216), the Department of Commerce amended the EAR to conform to changes to the Missile Technology Control Regime (MTCR), a voluntary multilateral anti-proliferation arrangement.  The following seventeen ECCNs have been revised to align CCL controls with changes made to the MTCR Annex in 2017 (ECCN headings summarized for readability may include additional specifications and related commodities):

1B117 – Batch mixers
1B118 – Continuous mixers
1C111 – Propellants and constituent chemicals
1C118 – Titanium-stabilized duplex stainless steel
2B109 – Flow-forming machines
2B120 – Motion simulators or rate tables
2B121 – Positioning tables
2B122 – Centrifuges
6A107 – Gravity meters or gravity gradiometers
7A105 – Airborne receiving equipment for ‘navigation satellite systems’
7A107 – Three axis magnetic heading sensors
7A116 – Flight control systems
9A012 – Non-military UAVs
9A101 – Turbojet and turbofan engines
9A115 – Apparatus, devices and vehicles for transport, handling, control, activation and launching of rockets, missiles, and UAVs
9A515 – Spacecraft
9A610 – Military aircraft

Additional details of changes can be found in the Federal Register Notice and the revised CCL.

Commerce Requests Comments on Spraying and Fogging Systems

On August 13, 2018 (83 FR 39921), the Department of Commerce published a request for comments on the effectiveness of its controls on spraying or fogging systems controlled under Commerce Control List (CCL) Category 2, ECCN 2B352.i.  The items are subject to Chemical & Biological Weapons Controls (CB column 2) because they are identified on the Australia Group’s “Control List of Dual-Use Biological Equipment and Related Technology and Software.”  The notice proposes alternative control criteria, particularly to aid classification and avoid controls of commercial (e.g., agricultural) systems.

Comments are due by October 12, 2018 and may be submitted via regulations.gov (docket number BIS–2018–0013), by email, or by paper submission.  Please see the Federal Register Notice for more details.

State Requests Comments on Part 130 Statements

On August 15, 2018 (83 FR 40618), the Department of State published a request for comments on the ITAR Part 130 “Statement of Political Contributions, Fees, and Commissions Relating to Sales of Defense Articles and Defense Services.”  Part 130 statements require information about fees, commissions, and political contributions from

“any person who applies to the Directorate of Defense Trade Controls for any license or approval… for the export, reexport, or retransfer of defense articles or defense services valued in an amount of $500,000 or more which are being sold commercially to or for the use of the armed forces of a foreign country or international organization.”

Comments may be submitted until September 14, 2018.  Please see the Federal Register Notice for additional details.

USML Category XI(b) Amended (Again) to Continue Current Text

On August 30, 2018 (83 FR 44228), the Department of State published an amendment to USML Category XI(b) that continues the current text which was scheduled to be replaced on August 30, 2018.  XI(b) currently controls:

*(b) Electronic systems, equipment or software, not elsewhere enumerated in this subchapter, specially designed for intelligence purposes that collect, survey, monitor, or exploit, or analyze and produce information from, the electromagnetic spectrum (regardless of transmission medium), or for counteracting such activities.

This text was scheduled to be replaced on August 30, 2018, but with the amendment the replacement will be delayed until August 30, 2019.  At that time, unless otherwise amended, Category XI(b) will read:

*(b) Electronic systems or equipment, not elsewhere enumerated in this subchapter, specially designed for intelligence purposes that collect, survey, monitor, or exploit the electromagnetic spectrum (regardless of transmission medium), or for counteracting such activities.

The change now scheduled for 2019 removes “software” as well as the capability to analyze and produce information from the electromagnetic spectrum.

The current language is meant to maintain control of “certain intelligence-analytics software” until a long-term solution is developed.  The rule gives the government additional time “to finalize its review of USML Category XI, with rulemaking to follow, to include any further modifications to the USML Category XI paragraph (b) as may be warranted.”

DDTC published a similar amendment last year.

DTAG to Meet in October

The Defense Trade Advisory Group (DTAG) will meet on October 25, 2018 to discuss the following topics:

  1. Oversight of technical data under the ITAR and NISPOM;
  2. Challenges regulated entities face in advising the Department of ownership changes that implicate existing licenses and foreign persons, and processes the Department may implement to facilitate the provisions of this information;
  3. Possible schedule for future ongoing periodic review of USML categories;
  4. Developing a definition for common carrier; and
  5. Issues that exist with licensing of defense articles, including intelligence related products, related technical data, and defense services to the ‘‘Five Eyes’’ countries of the U.S., UK, Australia, Canada and New Zealand.

The DTAG meeting is open to the public, with seating limited to 125 persons.  For meeting and registration information, click here for the meeting notice.

Click here for more information about DTAG.

Finally, watch for our next blog post on the NDAA and big changes coming to the Committee on Foreign Investment in the United States (CFIUS)!

(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.)

Submit Your Comments for Categories I-III to State & Commerce Today

Updating on our previous post on the proposed revisions to USML Categories I, II, and III, the proposed rules to transfer articles from the firearms, artillery, and ammunition categories from State Department to Commerce Department jurisdiction have been published.

The proposed rules were officially published in the Federal Register on May 24, 2018 at 83 FR 24166 (Commerce Department) and 83 FR 24198 (State Department).  Comments will be accepted under both notices until July 9, 2018.

(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.)

USML Categories I, II, and III Proposed for Reform!

Nearly two years after Export Control Reform stalled without reaching the remaining three categories, the Departments of State and Commerce have simultaneously published proposals to revise United States Munitions List (USML) Categories I, II, and III (firearms, artillery, and ammunition).  Click here for the Department of State proposal and click here for the Department of Commerce proposal.

The rationale for the review is that:

The Department of State is engaged in an effort to revise the U.S. Munitions List so that its scope is limited to those defense articles that provide the United States with a critical military or intelligence advantage or, in the case of weapons, are inherently for military end use. The articles now controlled by USML Categories I, II, and III that would be removed from the USML under this proposed rule do not meet this standard, including many items which are widely available in retail outlets in the United States and abroad.

Currently written broadly, USML Categories I, II, and III cover most firearms, artillery systems, and ammunition.  They also include catch-all parts and components categories (e.g., I(h) “Components, parts, accessories and attachments for the articles in paragraphs (a) through (g) of this category.”).  Items no longer controlled under the USML would be controlled by the Department of Commerce’s Export Administration Regulations (EAR) and listed on the Commerce Control List (CCL).

The eagerly-awaited USML Category I revision would include the following, notably excluding most “non-automatic or semi-automatic firearms”:

  1. Firearms using caseless ammunition.
  2. Fully automatic firearms to .50 caliber (12.7 mm) inclusive.
  3. Firearms specially designed to integrate fire control, automatic tracking, or automatic firing (e.g., Precision Guided Firearms (PGFs)), and specially designed parts and components therefor.
    Note to paragraph (c): Integration does not include only attaching to the firearm or rail.
  4. Fully automatic shotguns regardless of gauge.
  5. Silencers, mufflers, and sound suppressors, and specially designed parts and components therefor
  6. [Reserved]
  7. Barrels, receivers (frames), bolts, bolt carriers, slides, or sears specially designed for the articles in paragraphs (a), (b), and (d) of this category.
  8. Parts, components, accessories, and attachments, as follows:
    1. Drum and other magazines for firearms to .50 caliber (12.7 mm) inclusive with a capacity greater than 50 rounds, regardless of jurisdiction of the firearm, and specially designed parts and components therefor;
    2. Parts and components specially designed for conversion of a semiautomatic firearm to a fully automatic firearm.
    3. Accessories or attachments specially designed to automatically stabilize aim (other than gun rests) or for automatic targeting, and specially designed parts and components therefor.
  9. Technical data (see §120.10 of this subchapter) and defense services (see §120.9 of this subchapter) directly related to the defense articles described in paragraphs (a), (b), (d), (e), (g), and (h) of this category and classified technical data directly related to items controlled in ECCNs 0A501, 0B501,0D501, and 0E501 and defense services using the classified technical data. (See §125.4 of this subchapter for exemptions.)

x.  Commodities, software, and technology subject to the EAR (see §120.42 of this subchapter) used in or with defense articles. Note to paragraph (x): Use of this paragraph is limited to license applications for defense articles where the purchase documentation includes commodities, software, or technology subject to the EAR (see §123.1(b) of this subchapter)

Note 1 to Category I: Paragraphs (a), (b), (d), (e), (g), (h), and (i) of this category exclude: any non-automatic or semi-automatic firearms to .50 caliber (12.7 mm) inclusive; non-automatic shotguns; BB, pellet, and muzzle loading (e.g., black powder) firearms; and parts, components, accessories, and attachments of firearms and shotguns in paragraphs (a), (b), (d), and (g) of this category that are common to non-automatic firearms and shotguns. The Department of Commerce regulates the export of such items…

The proposed Category II revision includes expanded technical notes and specifications for control and enumerate the parts and components that will remain on the USML.  The proposed Category III is rewritten to control ammunition based on technical attributes rather than merely being “for the articles in Categories I and II.”  Both Category I and Category II will include paragraphs controlling developmental products funded by the Department of Defense.

Other sections of the International Traffic in Arms Regulations (ITAR) would be amended due to existing references to “firearms” that would be overbroad with a revised Category I.  These include the firearms exemptions in §123.17, which would no longer be subject to the ITAR.

Concurrently, the Department of Commerce would create new Export Control Classification Numbers (ECCNs) for the items leaving the USML.  Items currently controlled in Category II would be controlled under new “600 series” ECCNs “to control items of a military nature” and Category I and III items would be controlled under new “500 series” ECCNs “because, for the most part, they have civil, recreational, law enforcement, or other nonmilitary applications.”  Conforming to the new ECCNs, seven existing ECCNs would be revised and nine removed.  Various other changes would be made throughout the EAR.

Notably, from the Department of Commerce proposal:

This proposed rule does not deregulate the transferred items. BIS would require licenses to export, or reexport to any country a firearm or other weapon currently on the USML that would be added to the CCL by this proposed rule. BIS would also require licenses for the export or reexport of guns and armament that would be controlled under new ECCN 0A602, such as guns and armaments manufactured between 1890 and 1919 to all destinations except Canada. As compared to decontrolling firearms and other items, in publishing this proposed rule, BIS, working with the Departments of Defense and State, is trying to reduce the procedural burdens and costs of export compliance on the U.S. firearms industry while allowing the U.S. Government to enforce export controls for firearms appropriately and to make better use of its export control resources.

Comments on the proposed revisions may be submitted to the Department of State until 45 days after the publication of the Federal Register Notice—likely June 30, 2018 or later.  Comments are specifically requested regarding any possible gaps in control between the revised USML and CCL, items whose jurisdiction is unclear under the revision, the time needed for industry to implement any final rule, and any other regulatory burden.  Comments may be submitted via the Federal eRulemaking Portal at http://www.regulations.gov under Docket DOS-2017-0046 or by email to DDTCPublicComments@state.gov with the subject line, “ITAR Amendment – Categories I, II, and III.”

Comments may be submitted to the Department of Commerce on the same timeline via the Federal eRulemaking Portal at http://www.regulations.gov under Docket BIS-2017-0004 or by mail, referencing RIN 0694-AF47 to:

Regulatory Policy Division
Bureau of Industry and Security
U.S. Department of Commerce
Room 2099B
14th Street and Pennsylvania Avenue, NW
Washington, DC 20230

 

Update, May 25, 2018

The proposed rules were officially published in the Federal Register on May 24, 2018 at 83 FR 24166 (Commerce Department) and 83 FR 24198 (State Department).  Comments will be accepted until July 9, 2018.

(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.)

Iran Sanctions Reimposed—No More Mr. Nice Guy

On May 8, 2018, the White House announced the termination of U.S. participation in the Joint Comprehensive Plan of Action (JCPOA) with Iran.  Previously suspended sanctions, particularly related to Iran’s energy, petrochemical, and financial sectors will be re-imposed subject to a wind-down periods for existing business.

The Department of the Treasury released a follow-on statement including the following:

As soon as is administratively feasible, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) expects to revoke, or amend, as appropriate, general and specific licenses issued in connection with the JCPOA.  At that time, OFAC will issue new authorizations to allow the wind down of transactions and activities that were authorized pursuant to the revoked or amended general and specific licenses.  At the end of the 90-day and 180-day wind-down periods, the applicable sanctions will come back into full effect.

OFAC also posted FAQs on the re-imposition of sanctions.  Notably, the 90-day wind-down period that ends on August 6, 2018 includes:

ii.  Activities undertaken pursuant to specific licenses issued in connection with the Statement of Licensing Policy for Activities Related to the Export or Re-export to Iran of Commercial Passenger Aircraft and Related Parts and Services (JCPOA SLP); and

iii.  Activities undertaken pursuant to General License I relating to contingent contracts for activities eligible for authorization under the JCPOA SLP.

The 180-day wind-down period that ends on November 4, 2018 includes shipping, shipbuilding, petroleum, and energy sectors.  Other categories of business are distributed between the two wind-down periods.

Due to the wind-down periods, sanctions and license revocations were not yet officially implemented.  The full FAQs may be found here.

For ITAR purposes, Iran was and remains a prohibited destination subject to a policy of denial under Section 126.1.  The Department of Commerce Export Administration Regulations (Section 746.7) include both Commerce Department and OFAC licensing requirements for Iran.

(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.)

Leveling the Playing Field—We Now Have a New Conventional Arms Transfer (CAT) Policy

On April 19, 2018, the White House released a new Conventional Arms Transfer Policy (CAT).  This is a high level policy which directs the Departments of State, Defense, Commerce, and Energy to coordinate on the policy considerations for arms transfers.  Replacing the 2014 Conventional Arms Transfer Policy, it adds “Economic Security” to the list of factors used in evaluating proposed armed transfers, retaining the factors of national security, relationships with allies and partners, and nonproliferation.  “Economic Security” includes the effect of a proposed transfer on the defense industrial base and the availability of comparable foreign systems.

The State Department’s Directorate of Defense Trade Controls (DDTC) has posted a statement on the new CAT policy which includes some useful examples:

Specifically, we will increase opportunities for pre-deployment training and simulations of complex operational environments to help partners avoid civilian casualties. We will also encourage acquisitions of U.S. technology and training to enable more accurate battlespace awareness and more accurate targeting. We will also continue training to assist security forces in carrying out operations in a manner that respects human rights.

DDTC welcomes submission of stakeholder comments to ArmsTransferProcess@state.gov.

It remains to be seen what effect these changes will have on particular license applications, but the consideration of foreign availability is one of the major factors driving the simultaneous reevaluation of unmanned aerial systems (UAS) policy.

The State Department released a fact sheet on the new UAS export policy which seeks to increase trade opportunities for U.S. companies, enhance partner security and counterterrorism capabilities, and strengthen bilateral relationships while preserving U.S. military advantage and preventing the weapons of mass destruction delivery system proliferation.  UAS transfers remain subject to the Missile Technology Control Regime (MTCR).

For additional background on the Conventional Arms Transfer and UAS policies from Peter Navarro, Assistant to the President and Director of the Office of Trade and Manufacturing Policy, click here.

Finally, DDTC has announced the launch of a redesigned website effective April 30, 2018, intending “a number of significant enhancements including improved navigation, searchability, and accessibility, with a consistent, full-featured experience across mobile devices.”  The redesign has changed many links, so bookmarks and other saved references may need to be updated.

(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.)

Seize the Opportunity to Review & Test State/DDTC’s Electronic Disclosure Form!

The Department of State, Directorate of Defense Trade Controls (DDTC) has published the following notice on their website:

Industry Notice: Industry Feedback on Electronic Disclosures (DS-7787) (4.12.18) DDTC is developing an electronic version of the current DS-7787: Disclosure of Violations of the Arms Export Control Act form, also known as Disclosures. As an alternative to paper and mail, the online version will allow Industry personnel to submit Disclosures directly through DDTC’s Defense Export Compliance and Control System (DECCS). In an effort to improve this electronic form, DDTC is enabling a test version of the new online process for Industry feedback between April 16, 2018 – April 30, 2018, prior to it being publicly available online. If you are interested in participating, please visit https://pmddtcqa.service-now.com/um/ for more information on how to access and use the test version. Once you have completed testing, you can submit feedback or comments through the Provide feedback button.

As disclosures are an important part of compliance programs, this is a great opportunity to see what DDTC is developing and help make it more useful and user-friendly in the future.

(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.)

EAR Amended to Reflect Australia Group Decisions; DTAG Meeting; More Penalty Inflation Adjustments

Australia Group EAR Amendments

On April 2, 2018 (83 FR 13849), the Department of Commerce amended the Export Administration Regulations (EAR) to revise the following Export Control Classification Numbers (ECCNs) based on 2017 Australia Group decisions:

  • 1C350 (toxic chemical agent precursors)
  • 1C351 (human and animal pathogens and toxins)
  • 1C353 (genetic elements and genetically-modified organisms)
  • 2B350 (chemical manufacturing facilities and equipment)
  • 2B351 (toxic gas monitors and monitoring systems)
  • 2B352 (equipment capable of use in handling biological materials)

The specific changes, largely intended to clarify the entries, are detailed in the Federal Register Notice.

In addition, due to the admission of India to the Australia Group in January, an international forum for harmonizing for chemical and biological export controls, the Country Commerce Chart (Supplement No. 1 to part 738 of the EAR) was revised to remove the “X” in India’s entry for the CB 2 column (Chemical and Biological Weapons) and India was added to the Australia Group column (A:3) in the Country Groups chart (Supplement No. 1 to part 740 of the EAR).

DTAG to Meet in May

The Defense Trade Advisory Group (DTAG) will meet on May 10, 2018 to discuss the following topics:

  1. Address one remaining task not briefed as final by the IT working group at the February 1 plenary meeting. Pass any remaining work by way of recommendations for further study;
  2. Provide recommended changes to ITAR § 123.17 exemption that would cover other commonly carried Government Furnished Equipment (GFE); and
  3. Further discussion and recommendations with regards to the Defense Services Working Group.

The DTAG meeting is open to the public, with seating limited to 125 persons.  For meeting and registration information, click here for the meeting notice.

OFAC and DHS Inflation Adjustments of Civil Monetary Penalties

On March 19, 2018, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) published inflation adjustments for civil monetary penalties under multiple sets of regulations.  The changes are detailed in the Federal Register Notice, 83 FR 11876.

On April 2, 2018, the Department of Homeland Security (DHS) published inflation adjustments for civil monetary penalties under DHS components, including the Chemical Facility AntiTerrorism Standards (CFATS), U.S. Customs and Border Protection (CBP), U.S. Immigration and Customs Enforcement (ICE), and the U.S. Coast Guard.  The changes are detailed in the Federal Register Notice, 83 FR 13826.

(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.)

State Department Requests Comments on License Forms, Agreement Vehicle, and Recordkeeping

License Application Forms and DSP-83

On February 26, the Department of State, Directorate of Defense Trade Controls (DDTC) published a notice (83 FR 8312) requesting comments on the following forms:

  • DSP-5 – Application/License for Permanent Export of Unclassified Defense Articles and Related Unclassified Technical Data
  • DSP-61 – Application/License for Temporary Import of Unclassified Defense Articles
  • DSP-73 – Application/License for Temporary Export of Unclassified Defense Articles
  • DSP-85 – Application/License for Permanent/ Temporary Export or Temporary Import of Classified Defense Articles and Related Classified Technical Data,
  • DSP-6, DSP-72, and DSP-74 – Application for Amendment to License for Export or Import of Classified or Unclassified Defense Articles and Related Classified Technical Data
  • DSP-83 – Nontransfer and Use Certificate

Comments are requested to:

  • Evaluate the necessity of the information collection
  • Evaluate the accuracy of the forms’ estimated time and cost burden
  • Enhance the quality, utility, and clarity of the information collected
  • Minimize reporting burdens

Comments may be submitted at www.regulations.gov (Docket No. DOS–2017–0047), by email to DDTCPublicComments@state.gov, or by mail through April 27, 2018.  (Refer to the Federal Register Notice for additional information.)

DSP-5 “Vehicle” for Agreements

On February 27, the DDTC published a notice (83 FR 8563) requesting comments on the use of the DSP-5 “vehicle” to transmit proposed technical assistance, manufacturing, or distribution license agreements for DDTC approval.

As above, comments are requested to:

  • Evaluate the necessity of the information collection
  • Evaluate the accuracy of the forms’ estimated time and cost burden
  • Enhance the quality, utility, and clarity of the information collected
  • Minimize reporting burdens

Comments may be submitted at www.regulations.gov (Docket No. DOS–2018–0011), by email to DDTCPublicComments@state.gov, or by mail through April 30, 2018.  (Refer to the Federal Register Notice for additional information.)

Recordkeeping by DDTC Registrants

Finally, on February 27, DDTC also published a notice (also 83 FR 8563) requesting comments on the general record-keeping requirements imposed on registrants by the ITAR.  ITAR § 122.5 requires registrants to “maintain records concerning the manufacture, acquisition and disposition (to include copies of all documentation on exports using exemptions and applications and licenses and their related documentation), of defense articles; of technical data; the provision of defense services; brokering activities; and information on political contributions, fees, or commissions furnished or obtained, as required by part 130 of this subchapter” with additional conditions for storage methods and duration.

As with the other requests, comments are requested to:

  • Evaluate the necessity of the information collection
  • Evaluate the accuracy of the forms’ estimated time and cost burden
  • Enhance the quality, utility, and clarity of the information collected
  • Minimize reporting burdens

Comments may be submitted at www.regulations.gov (Docket No. DOS–2018–0009) or by email to DDTCPublicComments@ state.gov through April 30, 2018.  (Refer to the Federal Register Notice for additional information.)

Please be aware that comments are considered public record and should not include proprietary or other sensitive 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.)

State and Commerce Departments Request Comments on USML Categories V, X, and XI and Related ECCNs

State Department Request for Comments

On February 2, the Department of State published a notice (83 FR 5970) seeking comments on the following topics as they relate to U.S. Munitions List (USML) Categories V (Explosives and Energetic Materials, Propellants, Incendiary Agents, and Their Constituents), X (Personal Protective Equipment), and XI (Military Electronics).  Specifically, the notice requests comments on the following issues:

  1. Emerging and new technologies that are appropriately controlled by one of the referenced categories, but which are not currently described in subject categories or not described with sufficient clarity.
  1. Defense articles that are described in subject categories, but which have entered into normal commercial use since the most recent revisions to the category at issue. For such comments, be sure to include documentation to support claims that defense articles have entered into normal commercial use.
  1. Defense articles for which commercial use is proposed, intended, or anticipated in the next 5 years.
  1. Drafting or other technical issues in the text of all of the referenced categories.
  1. Comments regarding USML Category XI paragraph (b) modification.
  1. Potential cost savings to private entities from shifting control of specific commercial items from USML to the Export Administration Regulations. To the extent possible, please quantify the cost of compliance with USML control of commercial items, to include the time saved, the reduction in paperwork, and any other cost savings for a particular change.

Comments may be submitted by internet at www.regulations.gov (Docket No. DOS–2017–0017) or by email to DDTCPublicComments@ state.gov through April 13, 2018.  Comments will be published and should not include proprietary or other sensitive information.

For the current USML categories, click here.

Commerce Department Request for Comments

In a related notice (83 FR 5968), the Department of Commerce requests comments on the following Commerce Control List (CCL) ECCNs (Export Control Classification Numbers): energetic materials (1B608, 1C608, 1D608 and 1E608); armored and protective equipment (1A613, 1B613, 1D613, 1E613); military electronics (3A611, 3B611, 3D611 and 3E611); and cryogenic and superconducting equipment (9A620, 9B620, 9D620 and 9E620).  Specifically, the notice requests comments on the efficacy of the previous revisions, how to improve the implementation of these 600 series items on the CCL, and the potential cost savings of shifting control of these specific items from the USML to the CCL.

Comments may be submitted by internet at www.regulations.gov (Docket No BIS–2018–0004) through April 13, 2018.  Comments will be published and should not include proprietary or other sensitive information.

For the current CCL categories click here.

(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.)