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State Dept. Reviewing Information Collection on Exports of Unclassified Defense Articles

Thursday, May 19, 2016
Sandler, Travis & Rosenberg Trade Report

The State Department is accepting comments through July 18 on the proposed extension of an information collection entitled “Technology Security/Clearance Plans, Screening Records, and Non-Disclosure Agreements.”

International Traffic in Arms Regulations § 126.18 eliminates, subject to certain conditions, the requirement for DDTC approval of the transfer of unclassified defense articles, which includes technical data, to or within a foreign business entity, foreign governmental entity or international organization that is an authorized end-user or consignee (including transfers to approved sub-licensees) for defense articles, including the transfer to dual nationals or third-country nationals who are bona fide regular employees directly employed by the foreign consignee or end-user.

To use this provision, effective procedures must be in place to prevent diversion to any destination or entity or for purposes other than those authorized by the applicable export license or other authorization. Those conditions can be met by requiring a security clearance approved by the host nation government for its employees or requiring the end-user or consignee to have in place a process to screen all its employees and to have executed a non-disclosure agreement that provides assurances that the employee will not transfer any defense articles to persons or entities unless specifically authorized by the consignee or end-user. The technology security/clearance plans and screening records must be made available to DDTC or its agents for law enforcement purposes upon request.

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