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Streamlined Filing, Exports, Defense Services to be Reviewed by Defense Trade Committee

Monday, July 10, 2017
Sandler, Travis & Rosenberg Trade Report

The State Department’s Directorate of Defense Trade Controls has requested input from the Defense Trade Advisory Group within the next six months on the following issues.

Streamlined Filing. DDTC has proposed a consolidated licensing form (DS-7788) to replace all currently required unclassified licensing forms (GSP 5, 6, 61, 62, 73, and 74). This electronic form would allow applicants to enter all data currently required by existing forms, transmittal letters, agreement documents, and other supporting documentation and to electronically sign the application. Users could continue to provide data on a machine-to-machine basis (batch filing) and would be able to make corrections after submittal during the DDTC review process. Once DDTC has reviewed and approved an application the system would product a license that provides information for the applicant and foreign parties to ship against it.

DTAG is being asked for feedback on whether industry would benefit from (1) a single interagency form where the data elements needed by DDTC, the Bureau of Industry and Security, and the Office of Foreign Assets Control are collected using a single system user interface or single machine-to-machine data interface; (2) an expansion of the current license-based batch filing, to include registration filings and updates, notifications, commodity jurisdictions, etc.; and (3) a modified user access/authentication process.

Exports and Reexports. DTAG is being asked to examine the challenges of compliance with the current rules on releases of technical data to foreign dual nationals, which provide that any release outside the U.S. of technical data to a foreign person is a controlled event that requires authorization to all countries where that person holds or has held citizenship or is a permanent resident and that such authorization must authorize all applicable destinations. DDTC has learned that it may be difficult, impossible, or (in some countries) illegal to fully ascertain whether individuals have contacts with countries listed in ITAR section 126.1 arising from citizenship or residency that would preclude export authorizations. DTAG is therefore also tasked with identifying alternative options that sufficiently facilitate risk assessment and mitigation.

Defense Services. There has been confusion about servicing items subject to the Export Administration Regulations that are integrated into larger defense articles and the difficulty of establishing proof of knowledge. DTAG is therefore being asked to identify key areas of concern with a June 2015 proposed definition of “defense services” as well as any aspects of that definition that would constitute positive change.

Manufacturing. Considering the possibility of revisions to categories I-III and the removal of most commercial firearms and related activities from the International Traffic in Arms Regulations, DTAG is being asked to provide feedback to accurately and effectively define manufacturing (and to distinguish it from related activities like assembly, integration, installment, and various services) for remaining defense articles and services.

Agreement Expiration. DDTC is considering standardizing the expiration date for all new agreements to a fixed ten-year period from the date of initial approval. Under the current system the expiration month is established by a table based on the registered company name. This system is efficient for DDTC because it prevents an overwhelming number of extension requests at the end of the calendar year but may not be efficient for applicants because it requires companies to renew all expiring licenses during the designated month.

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