Background

The State Department is proposing to make the following amendments to the International Traffic in Arms Regulations. Comments on this proposal are due no later than April 4.

The rule would revise the definitions of “export” and “reexport” to clarify that any release of technical data to a foreign person described within the respective definitions is a release only to any countries in which that foreign person currently holds citizenship or permanent residency. Based on its experience over the past few years State has determined that a foreign person’s former citizenship or permanent residency status in a country should not be deemed to automatically result in an export or reexport to that country.

The phrase “although nationality does not, in and of itself, prohibit access to defense articles” would be removed from ITAR § 126.18(c)(2) as the definitions of “export” and “reexport” provide that a release to a foreign person constitutes an export or reexport, as applicable, to all countries in which the foreign person holds citizenship or permanent residency. This proposed change is not intended to convey any change to the department’s long-standing position that the purpose of vetting employees from countries listed in ITAR § 126.1 is to mitigate diversion. Further, simply identifying nationalities with no substantive contacts with ITAR § 126.1 countries is not a precondition to rely on to use the exemption for intra-company, intra-organization, and intra-governmental transfers to dual or third-country nationals.

ITAR § 126.18(c)(2) would also be clarified by stating that the screened employee, not the end-user or consignee, must execute a non-disclosure agreement to provide assurances that said employee will not transfer any unclassified defense articles to unauthorized persons.

Finally, the term “national” would be replaced with the ITAR-defined term “person” in the licensing exemption for defense article exports to Canada to be consistent with how foreign persons are defined in the ITAR.

For more information on defense export rules and regulations, please contact attorney Kristine Pirnia via email.

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