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Department of State Agreement Notifications – Inking the Deal

By Kenneth E. Schmidt, J.D. – Senior Associate

After fording the river and finally getting your Technical Assistance Agreement (“TAA”) of Manufacturing License Agreement (“MLA”) approved by Directorate for Defense Trade Controls (“DDTC”), it can be tempting to start firing off information to and performing defense services for authorized parties.  Like cowboys and cowgirls of the past, however, we need to keep firmly in the saddle and not let the cart drift ahead of our horse.

While approval of a TAA/MLA is a good first step on the journey to share export-controlled information and begin defense services, we need to be careful to disarm those thorny administrative tasks, such as inking the TAA/MLA and providing a copy of the fully executed agreement to DDTC within 30 days of the last signature.  The International Traffic in Arms Regulations (“ITAR”) Part 124.4 states:

(a) The United States party to a manufacturing license or a technical assistance agreement must file one copy of the concluded agreement with the Directorate of Defense Trade Controls not later than 30 days after it enters into force. If the agreement is not concluded within one year of the date of approval, the Directorate of Defense Trade Controls must be notified in writing and be kept informed of the status of the agreement until the requirements of this paragraph or the requirements of § 124.5 are satisfied.

Yes, DDTC wants to see dried ink on that TAA/MLA as a condition precedent to utilizing TAA/MLA authorization.  And while it may seem outdated, digital signatures are still not permitted.

Now the second obligation often overlooked in the excitement and flurry of the next great adventure, is the need to let the sheriff (a/k/a DDTC) know before you set out to export technical data or perform defense services.  This initial notification requirement is set forth in ITAR Part 123.22(b)(3)(ii), which states:

(ii) Manufacturing license and technical assistance agreements. Prior to the initial export of any technical data and defense services authorized in an agreement the U.S. agreement holder must electronically inform DDTC that exports have begun. In accordance with this subchapter, all subsequent exports of technical data and services are not required to be filed electronically with DDTC except when the export is done using a U.S. Port. Records of all subsequent exports of technical data shall be maintained by the exporter in accordance with this subchapter and shall be made immediately available to DDTC upon request. Exports of technical data in furtherance of an agreement using a U.S. Port shall be made in accordance with § 125.4 of this subchapter and made in accordance with the procedures in paragraph (b)(3)(iii) of this section.

Did you catch that “[p]rior to?”  Yep, prior to setting out on the trail with your TAA/MLA, your TAA/MLA must be signed (fully executed), a copy of which provided to DDTC within 30 days after entering into force, and DDTC must be notified prior to the initial export of technical data and/or providing of defense services under the TAA/MLA.

So, if you need help navigating the wild west of TAA/MLA implementation or would like to know what to do if your cart got ahead of the horse, give us a call at 703-847-5801.