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DDTC IT Modernization – “Are You Ready?”

By Odyssey E. Gray, III, Associate, FD Associates, Inc.

Change.  It’s the universal constant.  In all matter of things, change is ongoing, necessary and undeniable.  In the world of IT, it is a hallmark of the industry.  Technology changes occur daily as individuals, businesses, corporations and Governments seek more efficient and productive ways to do things.

As exporters develop and work towards more efficient processes to better manage, run and execute their activities, the Directorate of Defense Trade Controls (“DDTC”) has sought to do the same.

Step one was to overhaul and update its regulations under Export Control Reform (“ECR”) to more accurately reflect current technology and necessary controls for exporters’ commodities and services in today’s world.  This is still ongoing.

The next step is to overhaul and update its processes related to adjudication of all manner of DDTC requests and authorizations.  This is reflected in upcoming changes for exporters in how one obtains an ITAR registration, files Commodity Jurisdiction (“CJ”) requests, submits General Correspondence (“GC”) requests and submits requests for export authorization of hardware, technical data and defense services.

DDTC recognizes that its DTrade electronic licensing system is, in today’s world, an antiquated system.  As such, there are gaps and shortcomings in its processes which make for additional work by exporters and USG personnel, which, with current technology, can be improved via automation or eliminated altogether.

Over time, different processes have been developed to try to address activities by exporters requiring DDTC authorization.  Examining its infrastructure, DDTC understands that in today’s IT environment, these processes prove to be inefficient and unsatisfactory.  For example, under the current system, if a company changes addresses, why must an exporter be responsible for printing out a web notice and forwarding this with their shipment?  Why doesn’t the system simply update its existing records?  What if the exporter does not include the web notice?  How many calls and how much time is expended to address this?  Or more accurately, how much time is wasted to address this breakdown due to lack of IT modernization?

Thus, DDTC seeks to address these and similar issues with its IT modernization plan to not only benefit exporters, but to improve its own capabilities to better track, manage and control commodities (including identification of parties to transactions), furthering its ultimate mission to protect national security.  At the same time, these changes should help to allow industry to operate more efficiently and redirect resources to further engage and develop business opportunities.

IT modernization begins with how exporters interact with DDTC.  Therefore, the interfaces between industry and DDTC are changing.  DTrade, the use of digital certificates, the Electronic Filing System (EFS), the Electronic Licensing Entry System (ELLIE) and MARY are going away.  A web-based, single online interface named the Defense Export and Control and Compliance System (“DECCS”) is coming.  This system will feature data collection consolidation, improved security, use of a Government cloud and compatibility with multiple browsers.  Instead of digital certificates, users will use a new 2-factor authentication process.  Currently, only the ELISA database, the means of tracking requests, will remain unchanged.

How is this IT modernization going to occur?  Consolidate and automate.  As mentioned previously, one interface for exporters to submit requests.  One form for exporters to request acuthorization for different export activities/requests, or notifications.  In practice, this will be the use of one form for registrations, mergers and acquisitions; one form for CJs; one form for disclosures; one form for agreements, GCs and license requests and one form for Advisory Opinions.

When will this IT modernization occur?  The new form for CJs goes into effect (“live”) November 21, 2016.  The new registration form review process is finalizing so the form should be issued in early 2017.  The other forms are in various stages of review, however, expectation is issuance and use of all the new forms by April 2017 in the current DTrade system.  Overall migration from DTrade to DECCS is slated for June 2017.

How to prepare for IT modernization?  Review DDTC’s goals and information related to these proposed changes, similar to the way exporters reviewed changes to the USML for ECR.  Exporters can review the new forms on the DDTC website and any related notices and evaluate your internal processes in line with this IT modernization.

If you have questions, ask DDTC, response team or DTrade Help Desk, or contact FD Associates.

Don’t be intimidated.  Remember it’s in the Government’s interest that exporters understand the new processes.  Remember, it’s not about being new, but being better.