If implemented, this proposal would immediately reduce the number of ITAR violations.  First, if implemented, the proposal would bring into compliance those foreign companies who currently are allowing unauthorized dual and third country nationals to have access to US defense articles. Second, if implemented, it would bring into compliance those US companies who have failed to collect the currently required non-disclosure agreements from all of those dual and third country national employees of the foreign parties.  (As we say in the South, now bless your little non-compliant hearts, we know yall aren’t complying will all of that.  Haha)

So what has DDTC proposed to do?  DDTC proposed to create an ITAR 126.18 exemption.  (By the way, wouldn’t it be nice if DDTC put all of its exemptions together in one place so that for the rest of our lives we are not always required to remember all of the obscure places that DDTC hides exemptions in the ITAR?)  The proposed exemption would allow the transfer of defense articles including technical data within a foreign entity to all bona fide, regular employees of the foreign entity, including dual and third country nationals.  The authorized transfers have to occur where the foreign entity is located—so, a French company can transfer US ITAR data to its Estonian engineer Sven when he is in the company facility in Toulouse, but the French company cannot email the ITAR data to Sven if he is in Canada in a hotel or at an affiliated company site or if he is in DC at an SIA seminar.

Oops, sorry for pointing out a problem, this is a feel good article.

In exchange for not having to get ITAR authorization for all dual and third country nationals, the foreign party has to do three things.  First, the foreign party must implement “effective procedures to prevent diversion destinations other than those authorized.”  The effective procedures can be either of these:

• A security clearance approved by the host nation government for its employees; or
• The foreign party has a process in place to screen its employees and have signed non-disclosure agreements that provides assurances that the employee will not transfer any information to other persons unless authorized by the foreign party.

Second, in addition to choosing one of the above “effective procedures” the foreign party “must screen its employees for substantive contacts with restricted or prohibited countries listed in 126.1 [e.g., China].  Substantive contacts include, but are not limited to, recent or regular travel to such countries, recent or continuing contact with agents and nationals of such countries, continued allegiance to such countries, or acts other indicating a risk of diversion.”

(So Sven the Estonian engineer in the French company is ok, but what if his wife is a Chinese citizen?  Does marriage constitute “recent or continuing contact with …nationals of [China]”?  And what does the French company have to do to determine if Sven is having continuing contact with a Chinese national?  Hahaha.)

Ok, let’s get serious again.  Check out this from the proposed rule, “Though nationality does not, in and of itself, prohibit access to defense articles or defense services, an employee that has substantive contacts with persons from countries listed in § 126.1(a) shall be presumed to raise a risk of diversion, unless DDTC determines otherwise.”  This implies that the exemption applies to all employees of the French company, regardless of their nationality, as long as they don’t have substantive contacts with 126.1 persons.  So, apparently the French company can share the US defense articles with Shao Shin, its employee with dual French-Chinese citizenship as long as he does not have substantive contact.

But wait, some ITAR hardcore nerds are no doubt thinking to themselves, what does nationality mean anyway?  Is it country of birth?  Citizenship?  Favorite Olympic team?  This rule does not define nationality, that is another issue, but it seems to lessen the significance of that question.

The third thing the foreign party would have to do is “maintain a technology security/clearance plan that details its procedures for screening employees for such substantive contacts and maintain records of such screening. The technology security/clearance plan and screening records will be available to DDTC or its agents upon request.”

So, there you have it.  The proposal significantly eliminated the pesky dual and third country national issues at foreign entities, as long as the foreign entities are will to do those three things.  If this rule is implemented, it would make life significantly easier and more compliant for US exporters.  Foreign entities will have to determine for themselves whether this proposed approach is better than the current system.

If you really read this proposal carefully and closely, you will see that some things are not perfectly clear.  I didn’t really do a thorough analysis of the details of the proposal, because this is just a proposal so it does not matter if we know what it really means.  If you see things that are not clear or you don’t like, you can complain about them.  But, better yet, you can actually send your written comments to DDTC until September 10, 2010, to tell DDTC what it should do to make the proposal clearer or better.

The proposal is not perfect, for sure.  But it certainly has a lot of merits.  I applaud this step in the right direction.  Credit for this proposal goes to the President’s Task Force for Export Control Reform.  And, while I still am not a believer in the Task Force’s goal of creating a single export control agency, control list and regulation, I salute this proposal.

For the details of the proposal and to see how to submit your public comments, go to http://www.pmddtc.state.gov/FR/2010/75FR48625.pdf

John 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.

Boeing did not request approvals for MLA amendments for the excess amounts of manufacturing that occurred on a continuous basis. Of the few approval amendments the company did submit they failed to show the actual value they had already manufactured. When they disclosed the 20 MLA violations DDTC charged Boeing with an additional 10 violations for failing submit for approval amendments. DDTC also charged them with 5 violations of omitting material facts about the values of the agreements that they did submit.

Boeing was also hit with an additional 5 violations for failing to keep track of their executed agreements and amendments that had been submitted to DDTC, failing to submit non-Transfer and Use Certificates and the list goes on for clerical mishaps.

The charging letter states that, “if the Respondent [Boeing] had not undertaken these actions [voluntary self disclosure], charges against and penalties imposed upon the Respondent would likely be more significant.”

More information:

DDTC’s Charging Letter (PDF)

When determining nationality, the Department of Defense Trade Controls will consider an individuals country of origin or birth in addition to citizenship. The individuals must be physically located within one of the countries to receive access to the technical data.

The “Guidelines for Preparing Agreements” available on the DDTC website will be revised to incorporate this change and are effective February 1, 2008. Any submission that does not meet the following requirements will be subject to being Returned Without Action:

• On pages 10 and 22 of the Guidelines, insert the following statement: This agreement (does/does not) request retransfer of defense articles and defense services pursuant to ITAR 124.16. (Change or No Change on page 22)
• On page 15 of the Guidelines, the applicant must include the following statements (if applicable) which are required by the ITAR. Both the second and third statement my be used in conjunction depending on the location of the foreign licensees and or sublicensees:
  1. If Not Requesting Third Country/Dual Nationals: This agreement does not authorize access to defense articles or transfer of technical data/defense services to third country/dual national employees of the foreign licensees (or approved sublicenses – if applicable).
  2. If Requesting Third Country/Dual Nationals Who Do Not Qualify for ITAR 124.16: Pursuant to ITAR 124.8(5), this agreement authorizes access to defense articles and/or retransfer of technical data/defense services to individuals who are third country/dual national employees of the foreign licensees (and its approved sublicensees – if applicable). The exclusive nationalities authorized are listing all foreign nationalities of the employees who are not eligible for application of ITAR 124.16. Prior to any access or retransfer, the employee must execute a Non-Disclosure Agreement (NDA) referencing this DTC case number. The applicant must maintain copies of the executed NDAs for five years from the expiration of the agreement.
  3. If Requesting Third Country/Dual Nationals Who Do Qualify for ITAR 124.16: Pursuant to ITAR 124.16, this agreement authorizes access to unclassified defense articles and/or retransfer of technical data/defense services to individuals who are third country/dual national employees of the foreign licensees (and its approved sublicensees – if applicable). The exclusive nationalities authorized are limited to NATO, European Union, Australia, Japan, New Zealand, and Switzerland. All access and/or retransfers must take place completely within the physical territories of these countries or the United States.

More information available at: www.pmddtc.state.gov/dual_nationals.htm

At this time the Department of State is reviewing and modifying the current Guidelines for Preparing Agreements. Here are some key links. State says it will publish comprehensive new Agreements Guidelines this summer.

Current Guidelines for Preparing Agreements:

Word Version

PDF version

Updates to Guidelines for Preparing Agreements:

Section 9.4, Exporting Hardware Via Separate License in Furtherance of an Agreement (DOC)

Section 10.1, Sublicensing (DOC)

Agreements Menu:

Agreements Expiration Schedule

Agreements Renewal Deadline

“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.

For example, under the old rules if you apply for a TAA with a company in Germany, your application must identify any employees of the German company who will have access to the defense articles and have a nationality other than German. This would include a third country national who is a citizen of France, and a dual-national who has dual German and Mexican citizenship. In addition, under the old rules you have to get a Non-Disclosure Agreement (NDA) from the third country national (but not the dual national).

(For more information on the nuts and bolts related to preparation and submission of TAAs and MLAs under the new policy, see the next article.)

The new rule raises three issues:

1. Relaxed TAA and MLA requirements for to Nice Nationals
2. Implied Clarification of Requirements for Employees of Sub-Licensees
3. Implied Non-Clarification of the Term “Nationality”

Let’s take these one at a time.

1. Relaxed TAA and MLA Requirements for Nice Nationals

When you apply for a TAA, you no longer have to identify countries of nationality for dual and third country nationals who are nice nationals. Nice nationals are people with nationality exclusively of nice countries — for purposes of this ITAR rule, the nice countries are NATO member countries, EU member countries, Australia, New Zealand, Japan, and Switzerland, and you also do not have to get NDA from the same people.

Instead of listing individual countries and getting NDAs, you must include the new paragraph (a)(10) in ITAR 124.12 in which you request retransfer authorization for the nice nationals in ITAR 124.16. Once DDTC approves your TAA or MLA, items may be retransferred to nice nationals from any of the nice countries, and you don’t have to get NDAs. The blanket 124.16 authorization applies only to transfers within the United States or the nice countries. In addition, 124.16 does not authorize permanent retransfer of hardware-if a nice national needs to have access to ITAR hardware while doing his job he may have access, but if hardware actually needs to be permanently retransferred permanently to another party, that must be approved in the actual TAA/MLA or in a separate General Correspondence authorization.

There is one more requirement under the 124.16: the new benefits apply only to nice nationals employed parties who have either signed the TAA or MLA or who have signed an NDA. This leads us to the next point…

2. Implied Clarification of Requirements for Employees of Sub-Licensees

Well, after a dose of good ITAR news, I know all you experienced ITAR veterans are expecting some bad news. Here it is: (Insert funeral dirge tune here.) The ITAR now implies that you have to get NDAs from dual and third country nationals who are employees of sublicenses covered by your TAA and MLAs, in addition to having to get NDAs from duals and third employees of signatories to your TAAs and MLAs.

Ouch. Get NDAs from duals and third employed by sub-licensees.

OK, here are the details. The new ITAR 124.16 says you do not have to get NDAs from nice nationals employed by signatories who have signed the TAA/MLA or nice nationals employed sub-licensees who have signed the NDA. So, you might read this as implying that you have to get NDAs from non-nice nationals employed by sub-licensees.

There is nothing in the ITAR that explicitly or directly (much less clearly) says you have to get NDAs from foreign employed by sub-licensees. The Agreement Guidelines almost say that. The Guidelines include a reference to such a requirement but never actually impose the requirement-that is what you find, I should say, if you make a literal reading of the guidelines (using English grammar, an English language dictionary and logic). I am not going to give you the exact details of the almost requirement in the Guidelines-if you are not aware of it already, cherish your ignorance.

So there you go, the ITAR now implies that you have a huge new burden of getting NDAs from non-nice country nationals employed by sub-licensees. (Logically I would say that if, for example, a TAA includes a sub-licensee in Mexico, if the sub-licensee company signs the NDA, I certainly would not try to get NDAs from Mexican citizens who work for the sub-licensee.)

So, now the ITAR implies you have to get NDAs from non-nice country nationals employed by sub-licensees. Do you take the next step and say, well, if we have to get NDAs from those employees of the sub-licensees, shouldn’t we have to identify all of the nationalities of those employees in our TAA and MLA applications? My answer: Neither the Guidelines nor the ITAR require that you do so. Many of you do not have resources available to attempt to comply with an unstated extension of an implied requirement. If DDTC tells you to do it, then do it. If your compliance program is at a place where you can do it, it won’t hurt, until, of course, you put forth a great deal of effort trying to get a list of all of the dual and third nationalities from all of the sub-licensees in your TAA/MLA (or until you learn that your sub-licensee in France employees a dual French-Venezuelan national).

OK, now that you ITAR veterans have shifted from the initial good mood about the new rules to the more familiar irritated, overwhelmed and exasperated mood, let’s go to the last issue of this rule.

3. Implied Non-Clarification of the Term “Nationality”

In the Supplementary Information section of the Federal Register notice, DDTC made this statement, “In addition to citizenship, DDTC considers country of birth a factor in determining nationality.”

Importantly, DDTC does not define “nationality” with the above statement. DDTC only lets you know that it looks at citizenship and country of birth when it tries to determine a person’s nationality. It doesn’t say how it looks at those two factors nor does it tell you what other factors are involved (e.g., nationality of parents, time the person lived in various countries, passports the person holds, passports the person is eligible to hold, the first letter of the first name of the US exporter, DDTC policy of the week, current state of mind of licensing officer). So, DDTC raises the question of the definition of nationality, and refuses to define it.

I conclude that DDTC does not want to publish a definition of nationality because it wants to have the leeway to define it however it wants and change its definition, and, ultimately use one definition in one case and another definition in another case. Say a guy is born in Mexico, but moves to Canada when he is 1 year old, and is a Canadian citizen and has lived in English-speaking Canada his whole life-maybe DDTC thinks he is Canadian, but if the same guy were born in Iran and has only Canadian citizenship, maybe DDTC would like to call him Iranian. And, of course, if a guy is born in Iran and moves to the US when he is 21 and gets a US permanent resident alien status, well, of course DDTC treats him like a US citizen.

So, there you go, that is my analysis of the good, the bad, and the ugly of the recent Federal Register notice. The best thing about this analysis is the line, “Cherish your ignorance.” Unfortunately, I guess there ain’t much left to cherish.

For the details of the new rule, go to www.pmddtc.state.gov.

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.

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.

And, if other anecdotal impressions of license applications processing times mean anything, it seems like the summer of 2005 is shaping up to be slow and steamy at the Directorate of Defense Trade Controls (DDTC) licensing office. But licensing may not be the only group at DDTC bogged down. The compliance branch appears as swamped as ever by Sarbanes-Oxley inspired voluntary disclosures, as evidenced by a DDTC closure letter I recently reviewed in response to a minor disclosure. The letter directed the company to take action that their two page disclosure letter clearly stated had already been taken. Did anybody really even read the disclosure?

Invariably, part of the slowdown is due to summer vacationing by DDTC staff. But part of the problem can be traced to mindless jurisdiction grab by more senior DDTC management. Consequently, DDTC is choking on its own jurisdiction. Let me explain.

DDTC technical data and defense service pronouncements are spurring more licenses. If ever asked, DDTC seems to call nothing at the sales proposal stage ”basic marketing information” or “general purpose systems description” anymore, and instead terms everything “technical data” requiring a license. DDTC is likewise jawboning away the concept of public domain information (hopefully the topic of a future article). No wonder so many technical data license applications are piled up at State these days. And if it is “technical data,” DDTC invariably labels even the most innocuous discussion about it a “defense service.” So more folks are skipping the simpler offshore procurement licenses or DSP-5 marketing licenses and applying for far more cumbersome MLA’s and TAA’s to avoid gnawing off a leg caught in DDTC’s defense service trap.

The CJ process is as cumbersome as ever. Any regular ITAR practitioner knows that it is rarely possible to have a Commodity Jurisdiction (CJ) request go to Commerce jurisdiction without a massive lobbying effort by the applicant. Even the most obvious cases for Commerce jurisdiction require total dedication by the applicant, which is an incredibly time consuming (if not wasting) task for both companies and State. So if the government won’t apply common dual use sense without massive explanatory effort, companies have traditionally made there own dual use decisions following the rules spelled out in ITAR 120.3.

But reports of a $47 million proposed fine on Boeing for daring to read ITAR 120.3 in such a way as to consider a $31 million 737 (list price, not with negotiated discount) passenger aircraft containing a chip with military taint as dual use could change that (see Chip Fixation article).  Don’t get me wrong.  This action appears to be more about DDTC promoting improved bottom smooching than promoting compliance with the regulatory standard set in ITAR 120.3, as that language cuts strongly in Boeing’s favor. But even small aerospace parts manufacturers sometimes have thousands of dual use parts that they thought were clearly Commerce controlled, and I wouldn’t doubt that State is already seeing an uptick of CJ applications due to the chip madness.

And don’t get me started again on Part 129 brokering. I still haven’t put away the smelling salts after receiving a DDTC telephone interpretation that a $20 an hour freelance language translator working a meeting between a US company and a foreign Ministry of Defense was an arms “broker” and thus required prior approval, not to mention a now $1,750 a year registration fee. This gifted English-Hebrew speaker didn’t know the nature of the pile she stepped in to when she took on that assignment. Meanwhile, well compensated ex-Senators and Congress Members lobby for slices of the US defense budget apple pie on behalf of their foreign defense clients without any ITAR regard. Theirs is a stronger case for registration under the 129.3 standard. Would it be enough if the entire world registered as a broker? In that case, I wonder how effectively DDTC could process five billion registrations and review the five billion annual brokering activity reports.wait, I said I wouldn’t get started on brokering.

Former DDTC Managing Director Robert “Turk” Maggi seemed to be turning the official interpretative tide from the unthinking and ridiculous to at least the slightly more reasonable (see DTAG Meeting Notes article). Sadly, his ship passed stealthily into the night. Now we are left in a confused leadership vacuum with few daring to risk saying or doing anything reasonable if it meant someone wouldn’t register, disclose, file a license application, or send some kind of report to State. Over the top interpretations, a steadfast refusal to clarify, and an almost knee jerk effort to grab regulatory and licensing jurisdiction over everything within eye shot threatens to undermine DDTC’s own ability to function.

This is not only a disservice to industry and allies cooperation, but is also further stressing the borderline burned out worker bees at State tasked with shuffling the reams of resulting paperwork. In such an environment, the things that matter drown in a sea of things that don’t. Disclosures that are meaningful from an enforcement standpoint are lost in the pile.  License applications that should be scrutinized slip through without notice. And we are left dwelling on absurd technicalities over Australia or UK license applications that no one really cares about. That isn’t good for anybody.

Here’s a summary of what the regulation does:

• Transfers responsibility for commodity jurisdictions from DDTC’s licensing office to its policy shop.
• Further codifies a two-tiered system for notification of certain exports to Congress based on country of destination. The ITAR have long provided for State Department notification of Congress for certain exports. In theory, this gives Congress an opportunity to review and potentially block the proposed deal. Up until now, the notification threshold was triggered when the export of major defense equipment (MDE) reached $14 million or $50 million in the case of other defense articles or services. In 2002 Congress decided to add a twist to the notification requirement as part of the Foreign Relations Authorization Act for fiscal year 2003 by upping the threshold to $25 million for MDE and $100 million for other defense articles or services, but only for the member countries of NATO, as well as Australia, Japan, and New Zealand. These are the same countries which already get a reduced delay of 15 days while Congress considers the proposed export (other countries have to wait 30 days.) So now these close allies will have both fewer contracts pending congressional review and a shortened review period at that. The same legislation which increased the notification value threshold for certain countries also established a new level of $1 million for proposed exports to any country for firearms controlled on Category I of the U.S. Munitions List, which this rule implements in the ITAR. The requirement for congressional notification of a technical assistance agreement or manufacturing license agreement for the overseas manufacture of significant military equipment irrespective of value remains unchanged.
• Clarifies exclusions from the Canadian exemption. The changes are mostly quite minor and administrative. Man-portable air defense systems (MANPADS e.g. the Stinger), their parts and components, and technical data are specifically called out for the first time as excluded from the exemption.
• Refers people wishing to make voluntary disclosures to the DDTC website for the correct address.

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:

1. 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.
2. 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.
3. 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.
4. 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.”

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.

Requirements for Hardware Exports under DSP-5

• Lodge license with Customs
• Submit AES information 8 hours (air or truck shipments) or 24 hours (sea or rail shipments) in advance of export
• Through December 18, 2003, present a paper copy of the AES document to Customs
• Present to Customs export documents, including (but not limited to) the AES Internal Transaction Number (ITN) or External Transaction Number (ETN)
• Emergency Exports: If your shipment is too urgent for the 8/24 hour advance AES requirement and it is destined for an ultimate recipient and end user that is a foreign government, you must present the standard documents to Customs plus a copy of a letter you sent to DTC explaining why the shipment is urgent. You must submit the original of that letter directly to DTC.

Requirements for Hardware Exports under Exemptions and Agreement

• Submit AES information 8 hours (air or truck shipments) or 24 hours (sea or rail shipments) in advance of export
• Through December 18, 2003, present a paper copy of the AES document to Customs
• Present to Customs export documents, including (but not limited to) the AES Internal Transaction Number (ITN) or External Transaction Number (ETN)
• Emergency Exports: If your shipment is too urgent for the 8/24 hour advance AES requirement and it is destined for an ultimate recipient and end user that is a foreign government, you must present the standard documents to Customs plus a copy of a letter you sent to DTC explaining why the shipment is urgent—You must submit the original of that letter directly to DTC.

Requirements for First Technical Data Export under DSP-5

• Exporter keeps license
• Exporter self validates the initial export on the back of the DSP-5 for the first export
• Submit technical data export information report to DTC – currently present this information on paper (see Paper Notice guidelines below). Effective January 18, 2004, you must submit the information electronically to DTC.
• Send the DSP-5 to DTC
• You do not have to notify DTC of exports after the first export. For all subsequent exports under the license, use the tech data copies exemption in ITAR125.4 and follow the export clearance procedures for exports under exemptions.
• If you ship technical data through a port, Customs can require that you give it a copy of the initial export information you submitted to DTC.

Requirements for First Technical Data Exports under Agreements (TAAs and MLAs)

• Submit technical data export information report to DTC – currently present this information on paper (see guidelines below). Effective January 18, 2004, you must submit the information electronically to DTC.
• You do not have to notify DTC of exports after the first export.

Requirements for Technical Data Exports under Exemptions

• Mark the document or package containing the technical data with this ITAR certification statement: 22 CFR [insert ITAR exemption] applicable. If the export is oral, visual, or electronic, you must complete a certification statement and keep it for the standard five-year record retention period.
• In the Federal Register notice DTC stated, “Mandatory reporting on all exemptions is being further delayed, and will be implemented in a future Federal Register notice amending Section 122.23.” The new text of ITAR 122.23(b)(3)(iii) currently states that beginning January 18, 2004, you must electronically report exports of tech data under exemptions to DTC. Don’t ask me what this contradiction means. Let’s hope that by January 18, 2004, DTC clarifies this. (And let’s all hope we win the lottery and get out of this field.)
• So, for now, no notice to DTC or AES is required.

Paper Notice to DTC of Initial Technical Data Export under License or Agreement

• Mark your cover letter ATTN line “Initial Export Notification for [insert Agreement or License] [Agreement or license number]“
• Attach your DSP-5 when that is what you used for the export.
• Optional: Thank DTC for requiring you to submit a report that DTC traditionally has rarely, if ever, even read in the past.

Note: Please ignore all steps marked as optional.