Introduction printed below. To read the full rule change, visit the UK BIS website.
Introduction
(1) The US Department of State (DoS) has issued a final rule amending the International Traffic in Arms Regulations (“ITAR”) to include a new license exemption for transfers of defence articles to Dual National or Third Country National (DTCN) employees of foreign end-users. The new rule came into force on 15 August 2011 and eliminates the need to obtain prior approval from DoS for the transfers of unclassified defence articles (including unclassified technical data) to DTCN employees of foreign business entities, foreign government entities, or international organisations that are approved end-users or consignees (including approved sub-licensees) for such defence articles.
(2) However, use of the exemption is subject to satisfying certain screening and recordkeeping requirements. In particular, in lieu of prior approval, the new ITAR Section 126.18 requires eligible companies and organisations to implement “effective procedures to prevent diversion to destinations, entities, or for purposes other than those authorised by the applicable export license or other authorisation.”
(3) Based on comments received from Her Majesty’s Government (HMG), the Export Group for Aerospace& Defence (EGAD) and others in response to the proposed rule originally published on 11 August 2010, DoS made some important amendments before issuing the final rule. Most notably, DoS has preserved the limited exemption already available under ITAR Section 124.16 for transfers of certain defence articles (including technical data) to employees from NATO and EU member states, Australia, Japan, New Zealand and Switzerland and has expanded the definition of “regular employee” to include contract employees with long term employment relationships with the foreign end-user.
(4) Those foreign end users and consignees who intend to make use of the new licence exemption must have a TSP and Non-Disclosure Agreement (NDA) in place in order to comply with the rule change. This UK specific TSP has been endorsed by DoS and provides a step by step approach to ensure compliance with the rule change requirements. The information suggested in this document is for guidance only and made without any endorsement, representation or warranty. It is not intended to provide legal or professional advice, and any party seeking to relay on it should ensure that it has obtained its own legal advice to ensure it is complied in accordance with UK law.
