News
Print PDF

Practice Areas

Defense Export Debarment Rescission Policy Changed

Wednesday, March 06, 2019
Sandler, Travis & Rosenberg Trade Report

The State Department has announced a change in policy under which the reinstatement of export privileges under the International Traffic in Arms Regulations is no longer required prior to the rescission of a statutory debarment under the Arms Export Control Act. State explains that the circumstances warranting debarment may be different than those warranting the revocation of export privileges.

The AECA prohibits the issuance of export licenses or other approvals for the export of defense articles or services where the applicant, or any party to the export, has been convicted of violating the AECA and certain other U.S. criminal statutes. Under the ITAR, any person convicted of violating or conspiring to violate the AECA is statutorily debarred, or prohibited from participating directly or indirectly in any activities subject to the ITAR.

State announced the policy change in the context of a specific debarment rescission. Rocky Mountain Instrument Company was statutorily debarred in 2010 after pleading guilty to violating the AECA, but State has now determined that RMI has taken appropriate steps to address the causes of the violations and rescinded the company’s debarment. As a result, all otherwise eligible persons may engage in exports of RMI-manufactured defense articles, incorporate RMI-manufactured items into defense articles for export, or otherwise engage in transactions subject to the ITAR without providing prior written notification of RMI’s involvement.

However, State is not reinstating RMI’s export privileges.  As a result, the department may not issue an export license directly to RMI except as may be determined on a case-by-case basis after interagency consultations, a thorough review of the circumstances surrounding RMI’s conviction, and a finding that appropriate steps have been taken to mitigate any law enforcement concerns.

For more information on the impact of this change and other export-related issues, please contact Kristine Pirnia at (202) 730-4964.

To get news like this in your inbox daily, subscribe to the Sandler, Travis & Rosenberg Trade Report.

Customs & International Headlines