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Export License Exemption for Defense Goods Transfers by Federal Agencies Amended

Tuesday, April 23, 2019
Sandler, Travis & Rosenberg Trade Report

The State Department has issued a final rule that, effective April 19, amends the International Traffic in Arms Regulations to clarify when exports, reexports, retransfers, temporary imports, and performance of a defense service (transfers) may be made by or for a U.S. government agency without a license, including by U.S. government employees in the performance of their official duties. Specifically, the scope of this exemption is expanded to allow for permanent exports, reexports, and retransfers, in addition to temporary exports and imports, and to allow transfers by third parties acting for the U.S. government.

Revisions being made by this rule include the following.

- authorizes those transfers made by a U.S. government department or agency for (1) official use by the U.S. government, (2) carrying out certain international agreements or arrangements, (3) carrying out foreign assistance or sales programs authorized by statute, or (4) carrying out certain Department of Defense security cooperation programs and activities

- clarifies that the release of technical data to persons or entities of a country in section 126.1 is not authorized even if they are in a contractual relationship with the U.S. government

- clarifies that authorization of a transfer under section 126.4 is for ITAR purposes only and does not (a) constitute any other form of U.S. government approval that may be required or (b) absolve parties of the requirement to comply with any applicable U.S. government processes, procedures, or practices, including the need for exports of items on the Missile Technology Control Regime annex to receive case-by-case review

- clarifies that exports made in compliance with section 38(b)(2) of the Arms Export Control Act are excluded from the licensing requirements of the AECA and do not require export authorization from State’s Directorate of Defense Trade Controls

- clarifies that the U.S. government agency or entity exporting pursuant to this licensing exemption must obtain appropriate end-use assurances from the recipient

- clarifies that the ITAR do not require an authorization for the return of an exported defense article provided it has not been subsequently transferred without authorization or by license or other approval pursuant to another provision of the ITAR

- clarifies that exporters no longer need to provide U.S. Customs and Border Protection with a written certification of compliance and that the ITAR do not impose an electronic export information fling requirement on exports via U.S. government vehicles, aircraft, and vessels

- states that DDTC authorization (in the form of a license or other approval) is required for any change in the end-use or end-user

For more information on export licensing, please contact Kristine Pirnia at (202) 730-4964.

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