DDTC Proposes to Align ITAR Foreign Nationality Rules with EAR

On February 2, 2022, the Department of State, Directorate of Defense Trade Controls (DDTC) issued a proposed rule (87 FR 5759) that would make multiple revisions to the International Traffic in Arms Regulations (ITAR).  The most significant of these revisions would scale back the longstanding approach toward determining the nationality of foreign persons, to an approach more in line with the Export Administration Regulations (EAR).

Currently, the ITAR definitions of export and reexport include the statement:

Any release… of technical data to a foreign person is deemed to be an [export or reexport] to all countries in which the foreign person has held or holds citizenship or holds permanent residency.

Under these definitions, current nationality is considered as well as any other nationality, even if no longer held.  The result of this is that foreign persons originally from a third country, particularly those from § 126.1 prohibited destinations, are either barred from ITAR work or require more complex authorizations.

The revised definitions state:

Any release… of technical data to a foreign person is deemed to be an export to all countries in which the foreign person holds citizenship or permanent residency.

It will remain possible for a foreign person to have multiple nationalities, but will not require consideration of former nationalities.

The proposed approach is much closer to the EAR definitions, which state:

Any release… is a deemed [export or reexport] to the foreign person’s most recent country of citizenship or permanent residency

The proposed definition is also in line with the definition of U.S. person, which looks only at whether someone is a U.S. citizen, permanent resident, or one of a limited set of other immigration statuses.  A lawful permanent resident of the U.S. who once held another foreign nationality, including from a § 126.1 country, is unambiguously a U.S. person.

The proposed rule also makes a series of corrections and clarifications to:

  • 126.5(b) (Canadian exemptions),
  • 126.18(c)(2) (Exemptions regarding intra-company, intra-organization, and intra-governmental transfers to employees who are dual nationals or third-country nationals), and
  • 127.12 (Voluntary disclosures).

For additional information and how to submit comments, please refer to the Federal Register Notice.  Comments will be accepted through April 4, 2022.  As it is a proposed rule, the changes will not take effect until a final rule is published.