The State Department is accepting comments through June 10 on a proposed rule that would increase for the first time in 15 years the fees charged to the approximately 14,500 entities required to register with State’s Directorate of Defense Trade Controls. This includes every person who engages in the business of manufacturing, exporting, temporarily importing, or brokering any defense articles or defense services.
- Tier 1 registrants (new registrants and those who had no license application activity in the previous year) would pay $3,000 a year, a 33 percent increase.
- Tier 2 registrants (those who received five (down from ten currently) or fewer favorable determinations in the previous year) would pay $4,000 a year, a 45 percent increase.
- Tier 3 registrants (those who received more than five (down from ten currently) favorable determinations in the previous year) would pay $4,000 (a 45 percent increase) a year plus $1,100 (a 340 percent increase) times the total number of favorable authorizations above five.
- Registration fees for persons who engage in brokering activities would remain tied to Tier 1 regardless of authorizations submitted or determinations received.
DDTC indicates that the higher fees are needed to fund the improved services and technological advancements it has achieved in recent years. DDTC services include commodity jurisdiction determinations, licenses and authorizations, advisory opinions, violation investigations, guidance on brokering, and educational outreach. In fiscal year 2022 the agency received about 22,500 license applications, issued authorizations valued at nearly $154 billion, received more than 600 disclosures, and conducted more than 300 end-use monitoring checks. DDTC has also made improvements in numerous processes, including creating the Defense Export Control and Compliance System that has helped lower registration processing times and improve communication with the private sector.
For more information on defense export issues, please contact attorney Kristine Pirnia (at (202) 730-4964 or via email.
Copyright © 2024 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.