One it is only a proposed rule, so it does not help anybody yet. But if DDTC ever implements this proposed change, it will have made a big step in the direction of making life easier for countries who deal with US defense articles. This proposal, if implemented, would, for example, eliminate the requirement that foreign (i.e., non-US) end-users and consignees on Technical Assistance Agreements and Manufacturing License Agreements first identify the nationalities of their dual national and third country national employees in the agreement application and thereafter limit access to US defense articles to only those nationalities approved on the application. Of course, all burdens eliminated by one hand must be replaced by burdens imposed by the other hand—we will look at the details of the proposal below. (more…)
Archive for the ‘MLA’ Category
DDTC Publishes Proposed Change for Employees of Non-US End-Users and Consignees
Tuesday, September 7th, 2010 by John BlackBoeing Voluntary Disclosure on ITAR Agreement Administration Nets $3 Million Penalty
Sunday, July 20th, 2008 by Danielle McClellanJohn Black’s Advice to Export Administrators: This is a story about violations that most ITAR exporters make. Read it, be thankful it wasn’t your company that got nailed, and use this information to motivate your company to improve its ITAR agreement administration. Sure, the dollar values and quantities related to the Boeing agreements might be higher than what you do under your agreements, but the lesson is still there.
The Boeing Company has been fined $3 million for 40 violations of the AECA and ITAR that they voluntarily disclosed to DDTC. In the charging letter it is said that the voluntary disclosure was taken into account, however Boeing’s “record in effectively administering, updating and reviewing its agreements has been consistently flawed”.
The company was charged 20 times for violations of the terms of the company’s manufacturing licensing agreements (MLA). Over the course of about 15 years Boeing manufactured hardware in excess of the approved amounts of its MLA. At various points in time Boeing’s unauthorized manufacture amounted to more than $4 billion worth of hardware when it was only authorized at most $100 million. Large amounts of unapproved manufacturing continued from 1999 well into 2006. (more…)
Some Nuts and Bolts of New ITAR Agreements Requirements
Wednesday, December 19th, 2007 by Danielle McClellanOn December 19, 2007, an amendment to the ITAR was published that revised the licensing procedures with regards to third party/dual nationals for technical assistance and manufacturing license agreements. It is no longer required that additional approval for a release of technical data, defense services, and access to defense articles for third part/dual national employees from NATO, EU, Australia, New Zealand, Japan, and Switzerland. (more…)
DDTC Announces New Dual and Third Country National TAA and MLA Rule
Wednesday, December 19th, 2007 by John Black“Beware of apparently good news.” — John Black
In the December 19, 2007 Federal Register, the Directorate of Defense Trade Controls (DDTC) of the State Department announced its new policy for dual and third country nationals. The change primarily is related to the requirement that when you apply for a Technical Assistance Agreement (TAA) or Manufacturing License Agreement, you must identify the foreign nationalities of the foreign signatories to the agreement. (more…)
ITAR Rumors from Washington
Thursday, August 30th, 2007 by John BlackWell, these are a bit more solid than rumors:
First: the State Department has said that it relaxed its burdensome dual-national/third country national requirements for foreign nationals from NATO, Australia, Japan and New Zealand. If an employee of a company on a TAA or MLA is a national of one of these countries, they will be considered to be authorized to receive the US defense articles covered by the TAA and MLA and the applicant will no longer be required to obtain a non-disclosure agreement form such nationals. This policy change should reduce the current TAA and MLA burdens once (if) the State Department actually implements the policy.
Second: State plans to put out new brokering regulations soon. We will not know if this is good news or bad news until the regulations come out.
State Realigns Licensing Divisions and Agreements Processing
Tuesday, May 30th, 2006 by John BlackThe Directorate for Defense Trade Controls (DDTC) has changed the way it processes Technical Assistance Agreements and Manufacturing License Agreements. Formerly, DDTC had a specific group of people who handled agreement applications—there no longer is a specific division dedicated solely to agreement. Now, agreements will be assigned to divisions based on US Munitions List Category, just as DDTC has long assigned license applications for hardware and data exports. In a related move, DDTC also has realigned what divisions are responsible for processing which USML Categories.
DDTC Drowning in Jurisdiction
Saturday, July 30th, 2005 by Maarten SengersI read the July 12 Federal Register notice on expeditious processing of license applications for Australia and the United Kingdom with a chuckle. Just the same day an export administrator had complained to me that their Australia Technical Assistance Agreement (TAA) application was still lying around without staffing after two months, and how her $560 UK license was being pecked at for the most minor technical clarifications by both State and Defense reviewers.
Like the NATO allies mega-license International Traffic in Arms Regulations (ITAR) amendment of years past, which purported to streamline licensing for our closest allies, this notice will probably be inhaled without perception by the licensing bureaucracy. Underneath the well-intentioned words of this rule lies a sluggish Jabba the Hut figure of officialdom whose taste for painfully slow and meticulous license processing will never be satiated.
ITAR Revision Potpourri
Saturday, July 30th, 2005 by Scott GearityThe Directorate of Defense Trade Controls’ new regulation bears a surprising resemblance to my fruit and vegetable shopping when my wife’s out of town. Now, the easy joke here would be something about how I don’t eat produce and the new rule is similarly without nutritional substance. (Note: I said easy, not funny.) But that just wouldn’t be fair to either me or the regulation since I actually like vegetables and State’s reg is definitely substantive. No, the comparison is apt because when I’m on my own my shopping basket has one of everything – a cucumber, a cantaloupe, an onion, a yellow pepper and so on, all mixed up with no apparent relationship to each other. And so it is with the June 15 final rule from DDTC. It’s got a bit of everything with no apparent unifying theme or purpose. This, I will admit, would be more of a legitimate criticism if we were talking about a novel rather than a revision to the International Traffic in Arms Regulations.
State Publishes New Agreements Guidelines
Friday, December 26th, 2003 by Maarten SengersThe Directorate of Defense Trade Controls (DDTC) issued new Guidelines for drafting Technical Assistance Agreements (TAA’s), Manufacturing License Agreements (MLA’s) and the like on its website. You should immediately use the new guidelines and templates therein when preparing and submitting your TAA or MLA applications.
The new Guidelines are substantially more detailed than the old, though the actual MLA and TAA templates look virtually the same. What’s different is the degree of explanations and clarifications contained in the new Guidelines that were not found in the old. They also contain new sample letters and templates. A full accounting of all the changes is difficult, but notable changes include:
- Warehousing and Distribution Agreements dropped from the new Guidelines – The new Guidelines drop templates for Warehousing and Distribution Agreements. These Agreements were typically used for establishing distribution centers for defense articles outside the United States. But their actual use has been discouraged for years. Apparently, DDTC is discouraging their use even more by dropping them altogether from the Guidelines.
- New Template for Proviso Reconsideration – How many of you have had conflicting provisos on your Agreement? My personal favorite was an Agreement which had two provisos to the effect of 1) Shipment of hardware by separate license (e.g. DSP-5) is authorized and 2) Shipment of hardware by separate license (e.g. DSP-5) is not authorized. The new Guidelines offer a suggested format for Proviso reconsideration to deal with those conflicting or impossible Provisos such as these.
- Dual Nationals Disclosure – The new Guidelines advise that you list the nationalities of all third country nationals and dual nationals that may be employed by your overseas licensee – see section 10.2 of the Guidelines. This is now an explicit written instruction on what has been provided as informal, and often ignored, verbal guidance in the past.
- Foreign National Employees in the US – The Guidelines clarify that “most” foreign national employees should be licensed through a DSP-5, not a TAA. A TAA must be used only when the employee must receive “technical training.”
State Implements New Electronic Export Reporting Rules for ITAR Export
Monday, October 27th, 2003 by John BlackLast month Directorate for Defense Trade Controls (DTC) published a notice on its web site requiring electronic filing of Shipper’s Export Declarations (SEDs) using the electronic AES system for all items controlled by the International Traffic in Arms Regulations (ITAR). On October 27, 2003, DTC amended the ITAR to officially require the same. The new ITAR requires that you electronically report all ITAR exports to the US Government, except for exports of technical data under exemptions (not including the exemption for agreement). Generally speaking, for hardware exports you report electronically using AES and for technical data exports you report directly to DTC.
Note to Companies outside of the United States: If you are transferring items between non-US locations, no AES or ITAR reporting is required but you may want to share the information below with the US-based business who export to you to help them get their exports to you cleared properly.
The primary ITAR revisions come in the new ITAR section 123.22 – Filing, retention, and return of export licenses and filing of export information. ITAR 123.22 requires electronic export reporting for all ITAR exports, either via AES for hardware or via a new system for direct reporting to DTC (the latter system currently is a paper reporting system). These are the new ITAR 123.22 procedures for exports.
