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 ‘TAA’ Category
DDTC Publishes Proposed Change for Employees of Non-US End-Users and Consignees
Tuesday, September 7th, 2010 by John BlackDDTC Changes Proviso Reconsideration/Clarification Requirements for Licenses
Tuesday, September 7th, 2010 by John BlackDDTC announced on its website the new procedures you have to follow to request a reconsideration or clarification of the provisos on an approved license. Under the new procedures, you have a choice: Either submit a General Correspondence (GC) request or submit a Replacement Authorization license application.
Importantly, this new procedure applies only to licenses, not to agreements. If you want to request proviso reconsideration or clarification for an approved agreement, you have to follow the procedures in the new Electronic Agreements Guidelines. And, as you will see, if you want proviso reconsideration or clarification for a paper agreement, you have to first re-baseline that agreement as an electronic agreement.
For details on how to request proviso reconsideration or clarification for licenses go to:
http://www.pmddtc.state.gov/licensing/documents/gl_proviso.pdf
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.
Australian Ministry of Defence Memo: Expedited Treatment for ITAR Exports; Special Dual National Policy
Monday, July 30th, 2007 by John BlackPart 1: Expedited License Review
Don’t Tell Anybody-Expedited Treatment Available for ITAR Exports to Australia?
According to Kerry Clarke AO, in the Australian Department of Defence, the US State and Defense departments have agreed to give streamlined processing for exports to Australia under two new policies known as Expedited License Review I (ELR I) and Expedited License Review II (ELR II).
But, according to Kerry Clarke, the expedited processing might not yet be in operation and is “dependent on the continued implementation of D-Trade — [which] — the State Department hopes — to have fully implemented by the end of 2007. Until then, licence and TAA approvals may take longer than the 10 and 30 day target times, but hopefully less than the current approval times.”
(Not sure I agree with the hopefulness of Kerry Clarke.)
OK, so the bottom line appears to be that the expedited system might not be in operation yet and hopefully it will be up and running by the end of the year. (I personally am not going to use up my limited supply of personal hope hoping for streamlined processing. I plan to spend all my hope on hoping I win the lottery so I can retire to the mountains.)
Anyway, according to an Australian Department of Defence memo (see end of this article for a copy), here are the two expedited procedures the US and Australian agreed upon:
ITAR Regulations on Dual-Nationals Could Cause Delays in Canadian Contracts
Monday, March 26th, 2007 by Jill KincaidUS ITAR regulations are causing delays, and possible cancellations, in defense contracts between the United States and Canada. Briefing notes to Canada’s Defence Minister, Gordon O’Conner from last year show that American regulations have caused so many delays in Ottawa that the Canadian government had considered canceling a project to replace their 40-year old Sea King helicopters with 28 American-built Sikorsky Cyclone helicopters.The situation is resulting from the conflict between the ITAR’s regulations on dual-nationals and Canada’s anti-discrimination laws. US regulations prohibit Canadians with dual citizenship from having any contact with regulated materials or information. This has created a real dilemma for Canadian defense companies who risk breaking Canadian laws by releasing employees from working on sensitive US contracts. Sources close to the “Sea King” project state that juggling employees to comply with US regulations is costing Canadian companies a lot in time and money.
Canadian officials have refused to sign certain TAA’s and licenses which contain ITAR restrictions because they say they call for discrimination against Canadian citizens. This, also, is causing delays on the production and delivery of the Cyclones.
As General Motors in London, Ontario was recently fined $20 million for failing to comply with ITAR regulations relating to dual-nationals, Canadian companies know well the risks of non-compliance.
Upcoming Canadian purchases of Boeing helicopters and Lockheed-Martin planes could also be hindered by the problems.
Source:
- www.globeandmail.com, March 26, 2007
DDTC Managing Director Says Exporters Still Submitting Many Low Quality Applications
Monday, February 26th, 2007 by Jill KincaidThe Managing Director of the Department of State’s DDTC reported that DDTC is still receiving a steady stream of low-quality applications. About 2 out of 10 applications that are received are considered inadequate and are being returned without corrections as is the current policy of the DDTC. Examples of such applications include the following:
- Country name on application doesn’t match country on supporting documentation
- No Purchase Order attached to license application
- Values on application and purchase order are not consistent
- TAA requests to change the terms of other companies’ TAAs
- Lack of an original empowered official certification letter with submission of agreements and agreement amendments
- Proposing to provide defense services to a foreign country without TAA
- Lack of required Part 130 statement with submission of agreements and agreement amendments
- Continually making late applications and evoking national security reasons for immediate case adjudication without adequate justification
- Submitting multiple TAAs and licenses when only one is necessary
- Poorly documented commodity jurisdiction requests
- Incomplete or deficient registration requests
Exporters are encouraged to take more care in these matters when submitting applications.
Lockheed Martin Fined $3 Million Civil Penalty for Violations of Subsidiary Sippican
Sunday, January 28th, 2007 by John BlackBottom Line:
A fairly large penalty for continuing to participate in a project when the TAA expired. This is a good tidbit for you to motivate your people to make sure they do not let agreements and licenses expire and to motivate them to do a good job on agreement and license administration. This is also useful for those people in your company who want to do something without a license/agreement just because somebody in the US Government tells them to do it.
According to the State Department, Lockheed Martin subsidiary, Sippican, violated the International Traffic in Arms Regulations (ITAR) and the Arms Export Control Act (AECA) when it went 4 months between expiration of an existing TAA and approval of a subsequent TAA and continued to provide regulated technical data and defense services to BAE Systems in Australia. The information disclosed was related to the electronic payload for the NULKA missile decoy which is being collaborated on by the US Navy and the Australian Government.
Officials from Sippican attempted to argue that the ITAR-regulated information that they were providing BAE was consistent with their contract with the US Navy. DDTC was quick to point out that contractual obligations, even with the US military, do not take precedent over the ITAR and the AECA. It seems that it is not that unusual for contractors to be put under pressure by the US military to proceed with providing services, goods or information without undergoing the necessary procedures (and subsequent waiting time) to obtain the proper licenses. Unfortunately for Sippican, if this is indeed what happened, they paid a high price of $3 million for bending to that pressure.
DDTC Losing Patience with Low Quality Applications
Wednesday, December 27th, 2006 by Jill KincaidDDTC is losing patience with the increasing volume of “low quality” applications that they have been receiving. In the past, they may have corrected minor mistakes, but they assure companies that they will not be doing that from this point. Examples of mistakes that they have been seeing with increasing frequency include:
- “The country name on a license application does not match the country on the supporting documentation.
- No purchase order attached to a license application.
- The value on the license application is not the same as the value on the purchase order.
- Technical Assistance Agreement requests to change the terms of other companies’ TAAs.
- Submission of agreements and agreement amendments without submission of an original empowered official certification letter.
- Proposing to provide defense services to a foreign government without a TAA.
- Submission of agreements and agreement amendments without the required Part 130 statement.
- Continually making late applications and evoking (without adequate justification) national security reasons for immediate case adjudication.
- Submitting multiple TAAs and licenses when one TAA would do.
- Poorly documented commodity jurisdiction requests.
- Incomplete and deficient registration requests.”
(taken from Federal Register Vol. 71, Number 234)
In a message from the DDTC Managing Director, he warns that making mistakes like these demonstrates an “inadequate” understanding of export control regulations and a potentially at-risk export compliance program. Mistakes are being made across the spectrum —by large companies and small ones.
(I didn’t realize that DDTC’s delays in processing applications is all the fault of the applicants. Live and learn. —John Black)
