Category Archives: Export Control Reform

State Department Discontinues DSP-119, Other Forms in Development

The State Department’s Directorate of Defense Trade Controls (DDTC) has published a web notice discontinuing acceptance of the DSP-119 (Application for Amendment to License for Export or Temporary Import of Classified or Unclassified Defense Articles and Related Classified Technical Data):

Web Notice: Discontinuance of ELLIE and form DSP-119: (11.14.17)
Effective December 1, 2017, DDTC will no longer accept form DSP-119 to amend the DSP-85. All pending DSP-119’s will be processed pursuant to 123.25 of the ITAR. Any DSP-119 form submitted to DDTC on or after December 1, 2017 will be returned without action. When amending the DSP-85, the applicant must submit a completely new DSP-85 along with a transmittal letter, signed by the Empowered Official explaining the amended change.

Previously an all-purpose amendment form, the DSP-119 is currently only accepted to amend the DSP-85 Application for Permanent/Temporary Export or Temporary Import of Classified Defense Articles and Related Classified Technical Data.  Unclassified licenses are unaffected and may continue to be amended with the appropriate form (DSP-6, DSP-62, or DSP-74).

DDTC continues to work on expanding online DECCS (Defense Export Control and Compliance System) forms which are submitted through an interactive, browser-based form.  DECCS currently supports the submission of Commodity Jurisdiction (CJ) requests, which should be joined in the near future Advisory Opinion and Disclosure forms.  (Note also that DDTC currently recommends submitting a DSP-5 technical data export license in lieu of a General Correspondence Advisory Opinion when possible.)

DECCS forms for registration renewal and update as well as the single licensing form are also in development.

One-form electronic filing, proposed revisions of the definitions of defense services and manufacturing, and rules regarding release of technical data to foreign dual-nationals will be discussed at the next Defense Trade Advisory Group (DTAG) meeting scheduled for February 1, 2018 (originally December 7, 2017, but rescheduled in a November 20th Federal Register Notice).  To attend the DTAG meeting, please note the instructions at the end of the notice.

(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 Requires Form DSP-83 for Chemical Agent Resistant Coatings

The State Department’s Directorate of Defense Trade Controls (DDTC) has published a web notice on Chemical Agent Resistant Coatings (CARC):

Web Notice: Category XIV(f)(7), including Chemical Agent Resistant Coatings (CARC): (11.01.17)
Consistent with 81 FR 49531 (July 28, 2016), Category XIV(f)(7) defense articles are designated as Significant Military Equipment. Accordingly, any application to export Category XIV(f)(7) defense articles requires a DSP-83 non-transfer and use certificate.

The notice is consistent with the organization of the United States Munitions List (USML) where all of Category XIV(f) is designated Significant Military Equipment (SME), but reverses long-standing policies, including those announced in September 2009 and February 2017 web notices.

Specifically, XIV(f)(7) controls “Chemical Agent Resistant Coatings that have been qualified to military specifications (MIL-PRF-32348, MIL-DTL-64159, MIL-C-46168, or MIL-DTL-53039).”

A related Export Control Reform (ECR) FAQ continues to state that application of Chemical Agent Resistant Coatings (CARC) does not necessarily subject an item to the USML:

Q: Chemical Agent Resistant Coating (CARC) in its most basic form is controlled under USML Category XIV(f)(5). When it is applied to an item subject to either the ITAR or EAR, will the item to which it is being applied now be controlled as Category XIV(f)(5)? To the USML, at a minimum?

A: No. CARC coating on an item, in and of itself, does not provide a military capability warranting USML control. Hence, items that are subject to the EAR and classified on the Commerce Control List, to include vehicles and equipment, do not become subject to the ITAR simply due to the application of CARC paint.

The 2009 and 2017 web notices stated that “CARC paint does not possess ‘substantial military utility or capability,’” but ongoing Export Control Reform (ECR) revisions have not yet removed the SME designation from XIV(f)(7).

(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.)

Export Control Reform Moving Along: A Report from DTAG

The Defense Trade Advisory Group (DTAG), an advisory group of defense trade representatives, held a public meeting this month to discuss policies, regulations, and technical issues in defense trade.  Here are some of the highlights:

  • Export Control Reform has driven a 55% reduction in licensing volume since 2013 for the State Department’s Directorate of Defense Trade Controls (DDTC).
  • DDTC is still working to move USML Categories I, II, & III (firearms, larger guns, and ammunition) to the CCL in the next year.  These categories currently represent around 30% of DDTC license applications, so the move would drive another significant reduction in their licensing volume.  One source of delay is Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” which directs agencies to repeal two existing regulations for each new significant regulation.  The new Commerce Department rules would be considered new regulations, requiring additional offsetting repeals of regulations.  The State Department operates under an exception for “regulations issued with respect to a military, national security, or foreign affairs function of the United States.”
  • The State Department will also consider revisions to the definition of defense services, U.S. persons abroad, and other definitions.
  • The State Department is considering whether UAVs should remain in Category I of the MTCR (Missile Technology Control Regime) Annex, as opposed to less-sensitive Category II, is also under review and will be discussed at the October MTCR plenary.
  • The State Department is working on revisions to the UK & Australia Treaty implementation regulations.  Both treaties have helped to decrease licensing volume, but improvements can be made.
  • An interagency group involving the Departments of State and Defense is working on a rewrite of the ITAR.  There has not been a wholesale rewrite of the ITAR since 1984.  Overall, they are seeking to restructure for gaps and inconsistencies, add definitions, shorten the ITAR where possible, consider incorporation of guidance documents, and lead to a format that is conducive to a single control list (an end goal of Export Control Reform).
  • In IT modernization, DDTC is currently on track for a December roll-out of a single case management system, to be followed by a single license form.

The DTAG is expected to meet again next spring.

(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 Amends Category XI(b) to Continue Current Text

The State Department’s Directorate of Defense Trade Controls (DDTC) published an amendment to USML Category XI(b) (82 FR 41172).  The amendment continues the current text as follows:

*(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, 2017, but with the amendment the replacement will be delayed until August 30, 2018.  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 2018 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 review USML Category XI in full and publish proposed and final rules.”

(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.)

The State Department Wants Your Input: ITAR, Guidance, and Process Reforms Under Consideration

Comments Requested on the ITAR and DDTC Guidance

On July 14, the Department of State published a notice (82 FR 32493) “seeking comments on Department regulations, guidance documents, and collections of information that you believe should be removed or modified to alleviate unnecessary burdens.”

This is a part of the Department’s implementation of the President’s January 30, 2017 Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs” and an important opportunity to help make the ITAR and State Department guidance work better for everyone.  This includes any guidance on the DDTC website,

This is an open-ended chance to influence the future of the ITAR and DDTC guidance.  Consider any area that poses challenges to your company, including the questions addressed to DTAG below.

Comments may be submitted by internet at (Docket No. DOS–2017–0030) or by email to through August 14, 2017.

DTAG Recommendations Requested

Separately, the Directorate of Defense Trade Controls (DDTC) has asked the Defense Trade Advisory Group (DTAG) to make recommendations about the following topics at the upcoming plenary sessions:

  •  Whether industry would benefit from a single interagency form for DDTC, BIS, and OFAC.
    • Would a single form simplify company processes or is there concern that it would become unmanageably complex?
  • Whether batch filing should be expanded to registration, notifications, Commodity Jurisdiction requests, etc. and priorities for this expansion.
    • Does your company currently use batch filing? If so, how would expansion help?
  • Whether access/authentication methods other than IdenTrust certifications should be considered.
    •  Does your company have a positive experience with other certifications that should be considered?
  •  Key areas of concern regarding the 2015 proposed revision of the definition of defense services.
  •  An effective definition of “manufacturing” distinguished from assembly, integration, etc.
    •  This is in the context of possible revisions of Categories I-III removing most commercial firearms from the ITAR. Are there any changes to the definition that would be more workable?
  •  Identify alternative, workable methods to control releases of technical data to foreign dual-nationals.
    •  If releases to foreign dual-nationals are a challenge, what could be improved?
  •  Assessment of whether new agreements should have a standard expiration date of ten years from the date of approval. The current company-based expiration dates were designed to smooth out DDTC’s workload, but may have the opposite effect on individual companies.
    •  Do the company-based expiration dates unnecessarily complicate your business?
    •  For companies that do not always request the full ten years, would a standard expiration date complicate business?

DDTC’s DTAG letter may be found here.  DTAG will meet September 8, 2017 to review these recommendations.  Many of these questions would also fall under the regulatory reform comment request.

(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.)

New Year ITAR Updates

Category XV Revised

Effective January 15, 2017, the Department of State’s Directorate of Defense Trade Controls (DDTC) has revised United States Munitions List (USML) Category XV, Spacecraft and Related Articles, in Federal Register Notice 82 FR 2889.  Changes include new aperture specifications for remote sensing satellites under XV(a)(7) and XV(e)(2), the exclusion of the James Webb Space Telescope and “spacecraft that dock exclusively via the NASA Docking System (NDS),” and other spacecraft attributes and revisions.

Category XII Request for Comments

The Department of State also requested comments on recent revisions to USML Category XII, Fire Control, Range Finder, Optical and Guidance and Control Equipment, in Federal Register Notice 82 FR 4226.  Specifically, the Department requests comments about “(1) alternatives to controls on certain items when ‘specially designed for a military end user,’ (2) the scope of the control in paragraph (b)(1), and (3) certain technical parameters that the Department is evaluating to replace ‘specially designed’ controls.”

Comments will be accepted by email or internet through March 14, 2017.

Amendments to AES References

Also, effective December 31, 2016 but published on January 3, 2017 in 82 FR 15, multiple sections of the International Traffic in Arms Regulations (ITAR) were amended to refer directly to the U.S. Customs and Border Protection (CBP) International Trade Data System (ITDS).  References to the Automated Export System (AES) have been removed and now refer to the CBP’s electronic systems (which now include the Automated Commercial Environment (ACE)).

(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.)

2016 Year-End USML Updates

2016 Year-End USML Updates

The Directorate of Defense Trade Controls (DDTC) has revised USML Categories VIII, XII, XIV, XVIII, and XIX effective December 31, 2016.

The revisions to Categories XII (Fire Control/Sensors/Night Vision), XIV (Toxicological Agents), and XVIII (Directed Energy Weapons) under the Export Control Reform (ECR) process are found in Federal Register notices 81 FR 70340 and 81 FR 49531.

In addition to increased detail and technical performance thresholds, the revision of Category XII also includes minor revisions to related parts of Categories VIII, XI, XIII, and XV.  VIII(e) (aircraft inertial reference systems), XIII(a) (cameras), and XV(c) (GPS equipment) have been removed and reserved with their contents now covered by the revised Category XII.  Radar and sensor specifications in XI(a)(3)(ii) and (a)(10) are also revised.

Revisions to Category XIV, which was already highly detailed, include the addition of XIV(a)(5) “Chemical warfare agents not enumerated above adapted for use in war to produce casualties in humans or animals, degrade equipment, or damage crops or the environment.”  XIV(b) and (g) are revised to identify biological agents and antibodies not previously specified.  Tear gasses and riot control agents are moved to the jurisdiction of the Department of Commerce.

As revised, Category XVIII is actually shorter, with a smaller list of directed energy weapons systems.

For previously-revised Categories VIII (Aircraft and Related Articles) and XIX (Gas Turbine Engines and Associated Equipment), some articles made subject to the EAR will again be subject to the ITAR (81 FR 83126).  DDTC’s rationale is that they “constitute or are specially designed for next-generation technology.”  Unshipped balances on Commerce licenses may not be used after the effective date, requiring a State Department authorization.  Any reexport or retransfer of articles previously subject to the EAR will be subject to the ITAR.

As a result of the changes in USML categories, DDTC is also updating licensing forms and batch Common Schema.   The new versions will be 9.3 for the DSP-5, DSP-61, and DSP-73 forms, version 3.2 for the DSP-85, and version 7.6 for the Common Schema.  The new versions have been posted on the DDTC website and must be used starting January 3, 2017.  DTrade will be down for maintenance from 6pm December 30, 2016 until 7am January 3, 2017.

In related news, Section 1292 of the 2017 National Defense Authorization Act (NDAA) (S.2943), signed by the President on December 23, 2016, states that the Secretaries of Defense and State should recognize India as a “major defense partner” and improve cooperation.  However, this does not currently require any specific amendments to the AECA or ITAR.  The NDAA does direct “an assessment of the defense export control regulations and policies that need appropriate modification, in recognition of India’s capabilities and its status as a major defense partner.”

(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 Commodity Jurisdiction and ITAR Changes this Week

State Department Commodity Jurisdiction and ITAR changes this week

Tuesday – ITAR Amendments

On Tuesday, November 15, 2016, ITAR amendments published in August will go into effect (81 FR 54732).

Among these amendments, § 120.5 will be revised to clarify that ITAR exemptions can only be used for items subject to the EAR when they are in the same shipment as a defense article.  EAR-controlled items continue to be subject to the EAR, even if shipped under a Department of State license or ITAR exemption.

The Destination Control Statement (DCS) at § 123.9 will also be revised to harmonize the text with the EAR’s DCS at § 758.6.  The DCS must be included as “an integral part of the commercial invoice.”

Additional amendments will be effective December 31, 2016 and the Department of State continues to anticipate separate rulemaking for proposed rules issued during the Export Control Reform process that are not yet final.

Wednesday – CJ Form

The Department of State will no longer accept DS-4076 Commodity Jurisdiction (CJ) requests through the Electronic Form Submission (EFS) application effective Wednesday, November 16, 2016 at 5pm EST.

Starting Monday, November 21, 2016 at 8am EST, CJ requests will be accepted through the Defense Export Control and Compliance System (DECCS).

DECCS submissions are through an interactive, browser-based form.  The status of CJ applications will continue to be tracked through the Department of Defense’s ELISA system.

The Department of State continues to work on new forms for voluntary disclosures, registration changes, and a single license application.

(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.)

Revising U.S. Export Controls: ISIS Network Poses Challenges

As the year 2015 draws to a close, fifteen of the twenty-one categories on the U.S. Munitions List (USML) have been revised as part of the U.S Government’s Export Control Reform Initiative (ECR). For three others— Categories XII (Fire Control/Sensors/Night Vision), XIV (Toxicological Agents), and XVIII (Directed Energy Weapons)—public comments have been received on new Proposed Rules, but have not yet been acted on. The revisions for the remaining three categories—I (Firearms), II (Artillery), and III (Ammunition)—have not yet been published in proposed form. As was the case with previous changes, the new rules are expected to create positive lists for each category and transfer the export jurisdiction for some types of ammunition, ordnance, and other items from State to Commerce. As the State/DDTC web site explains, the ECR initiative “is designed to better protect America’s most sensitive defense technologies, while reducing unnecessary restrictions on exports of less sensitive items.”

Precisely when these last three categories will be revised, and what the changes will be, is not clear. Work on them continues, but the wait shouldn’t be too long, because State has indicated that its goal is to finalize this initial review and revision of the entire USML in 2016.

What are the actual effects of the revisions so far? That’s a natural question at this point, but measuring and assessing the contribution of ECR is complex and challenging.

The Commerce Department has just made that task a little easier, however. On November 2, the Department’s Office of Technology Evaluation (OTE) launched a new BIS Data Portal, which makes available to the public, for the first time, regularly updated aggregate information on the numbers and kinds of export licenses issued and current U.S. export trends. The new web portal offers a valuable analysis of controlled trade with select countries, charting the ongoing impact of ECR, and exporter compliance, with tables, graphs, and Defense Industrial Base studies that users can download in either PDF or Excel format. Among the encouraging data items posted by BIS are numbers showing a steady decrease in the average processing time for a license, despite a dramatic increase in the number of applications processed.

As for the effects of ECR to date, according to the OTE’s early analyses, the regulatory changes that have been made since the initial implementation went into effect in October 2013 are already speeding up the export process significantly and helping U.S. defense companies export more goods, during a period when the U.S. defense budget is being cut and military spending is declining, while military spending in other parts of the world—especially Asia, the Middle East, Eastern Europe, and Africa—on the rise.

At this stage, it is probably fair to say that the shifting of many controlled items from the USML to the less restrictive Commerce Control List (CCL) has made exporting considerably easier for many small and medium-sized U.S. companies. For large firms in the U.S. defense sector, however, the very welcome expansion of export opportunities has been accompanied by an unwelcome sharp increase in compliance expenditures (in the short term, at least) as they grapple with the complexities and uncertainties of adjusting to the ECR changes, reclassifying products and product lines, reevaluating risk profiles and projected compliance costs vs. anticipated sales revenue, and making sure that the continuing stream of new compliance and cybersecurity requirements “flows down” to their subcontractors.

Transitioning has proved to be somewhat more difficult than anticipated. In recognition of this, on October 3, 2015, the DDTC posted an Industry Notice with updated guidance extending the two-year time periods originally permitted to defense exporters for transitioning to BIS export authorizations.

The extent to which some of the other hoped-for benefits of ECR—such forestalling the offshore outsourcing of high-tech production capabilities and generating jobs for U.S. workers— have been realized is harder to assess at this point.

Meanwhile, on the world scene, an in-depth investigative news story entitled “ISIS: The Munitions Trail” by Erika Solomon and Ahmed Mhidi, published in the Financial Times on November 30, sheds considerable light on how and where the militant movement calling itself the Islamic State, or ISIS, gets its guns, artillery, and ammunition—the three categories of military equipment on the USML that are still awaiting revision. It also raises hair raising questions about the effectiveness of the U.S. export control system, and highlights the enormous and growing challenges it now faces after two years of changes under ECR.

According to the FT investigation, the terrorist group is awash in funds from the sale of oil on the black market and several other sources, and is abundantly furnished with captured light and heavy arms (including a great deal of U.S.-made military equipment). Its most urgent, ongoing need is for vast quantities of ammunition:

ISIS seized weapons worth hundreds of millions dollars when it captured Iraq’s second city, Mosul, in the summer of 2014. Since then, in every battle that it has won, it has acquired more material. Its arsenal includes US-made Abrams tanks, M16 rifles, MK-19 40mm grenade launchers (seized from the Iraqi army) and Russian M-46 130mm field guns (taken from Syrian forces).

“But dealers say despite this, there is one thing ISIS still needs: ammunition. Most in demand are rounds for Kalashnikov assault rifles, medium-calibre machine guns and 14.5mm and 12.5mm anti-aircraft guns. ISIS also buys rocket-propelled grenades and sniper bullets, but in smaller quantities.”

The details of the organization’s operations, as reported in the article, make it evident that any nation or coalition seeking to halt the flow of needed military supplies to ISIS— which (in addition to ammunition) include agricultural chemicals and mining materials that are used to manufacture explosives for the bombs that have made ISIS infamous, and common electronic devices that are made into bomb triggers—faces a nearly impossible task. With a complex, state-like infrastructure, a multinational network of black-market traders, and a sophisticated logistics operation capable of moving large supplies of munitions to its fighting men in many fields with remarkable speed, it would appear that the “world’s richest Jihadi group” is having no difficulty procuring whatever military supplies it requires.

“They buy like mad. They buy every day: morning, afternoon and night,” says Abu Ali, who, like others who have operated inside Isis territories, asked not to be identified by his real name. . . .

These materials come from all over the world, says one Iraqi official: “Just put your finger on a map, and they’ve got something from there.”

Historically, one major stated goal of U.S. defense export controls has always been to make it as difficult as possible for unscrupulous arms dealers, terrorist organizations, and proliferators of weapons of mass destruction to obtain goods that are militarily useful.

A closely related goal has been to deter human rights abuses and prevent the stoking of violent civil disorder in certain countries, or the inflaming of regional instability. For this reason, the State Department has long sought to block the sales of small arms (such as semiautomatic rifles), light weapons (such as artillery rockets), arms parts, artillery shells, and ammunition (i.e., the “less sensitive” defense items controlled by USML Categories I, II, and III), as well as communications and surveillance equipment, and certain other goods, to governments and other entities with a consistent record of committing atrocities.

Still another goal of defense export controls has been to combat illicit arms trafficking and prevent retransfers to transnational criminal organizations via black-market middlemen. Tracking U.S. small arms and other military equipment after export has often led to the apprehension and prosecution of criminals involved in the illicit trafficking of drugs, money, art, and human beings.

Other nations and international organizations are actively involved, along with the U. S., in these arms control, nonproliferation, and international crimefighting efforts.

If the description of the “munitions trail” to ISIS in the November 30 Financial Times report is accurate, however, it plainly casts doubt on the effectiveness of past and present U.S. export controls. It is hard to avoid the conclusion that, whatever measures were taken by the U.S. and other nations to stem the flow of weapons, munitions, and other military equipment to the Islamic State and similar terrorist groups, they have largely been ineffective.

Somehow, an elaborate system of export licensing, re-export and retransfer authorizations, end-user assurances, end-use monitoring, marking, and tracking, not to mention a U.N. arms embargo on ISIS, has failed to prevent the group from acquiring a massive arsenal of weapons and equipment—weapons it has used, and continues to use, to carry out indiscriminate attacks on civilian populations and commit multiple atrocities, posing a dire threat to millions of people in the Middle East region and beyond.

The DDTC has repeated stated that the initial review and revision of the twenty-one USML categories, now in its last phase, is not intended to be the end of reforms to the U.S. export control regime. State readily acknowledges that there is still work to do on ECR; ongoing review and further input from industry and the public is expected and encouraged.

The growing terror threat posed by the Islamic State group strongly underlines the need for a great deal of further thought and discussion of U.S. export controls on arms and munitions with a view to enhancing end-user/end-use controls, ensuring effective monitoring, verification, and enforcement, and minimizing diversion and re-export risks—especially for small arms, light weapons, and ammunition.

(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.)