General
Answer:
The International Traffic in Arms Regulations (ITAR), established in 1976, controls the export of the most sensitive equipment used by the U.S. military or intelligence community, its technical data and the services provided by U.S. persons related to the products and software enumerated on the ITAR U.S. Munitions List (USML). The services can relate to the equipment described on the USML whether U.S. Origin or Foreign Origin and the scope of services extend from the initial design all the way to the destruction of such equipment or activities such as military planning, training and strategizing.
The ITAR also regulates brokering activities by U.S. persons related to defense articles and items on the U.S. Munitions Import List (USMIL) regulated by the Bureau of Alcohol, Tobacco & Firearms. The goal of ITAR, which is administered by the Department of State, Directorate of Defense Trade Controls (DDTC) is to safeguard U.S. national security and further U.S. foreign policy objectives. Licenses are required in most circumstances.
Answer:
ITAR Compliance is the implementation of a written trade compliance program that addresses key elements of export compliance. The Department of State, Directorate of Defense Trade Controls has a published guideline of what elements should be included in a company written compliance program. The written program will address the following: establishment of a trade compliance group in the organization, senior leadership support, export jurisdiction and classification analysis, registration with the Department of State, notifications of changes to information in registration statements including Merger and Acquisition activities, export licensing, foreign person visits, foreign person employment, foreign travel, tagging of export controlled information, shipping, recordkeeping, IT infrastructure/storage of technical data and protection, training of company personnel, auditing of company export processes and voluntary disclosures of violations of the ITAR.
Answer:
Actually No. The ITAR sets the threshold for who may receive ITAR controlled technical information or defense articles to a lower threshold. The ITAR allows U.S. persons, which includes U.S. Citizens and persons granted permanent resident status or refugee/asylum status. All of these categories of persons may receive export controlled ITAR technical data[1] without an export license.
U.S. Person status is required when a company decides to engages in ITAR regulated activities, which trigger a requirement to register with the Department of State, i.e. manufacturing defense articles in the U.S. or exporting ITAR technical data, defense articles or performing defense services. The ITAR only permits U.S. persons, individuals or entities, to become registered with the Department of State as a manufacturer or exporter. U.S. Companies with foreign ownership may register with the Department of State provided a U.S. person in management/leadership is responsible for the day to day operations and export control processes. Foreign persons including companies and governments may receive ITAR controlled equipment or technical information pursuant to an ITAR license.
[1] Other USG regulations may impose different requirements
A: “DECCS” stands for Defense Export Control and Compliance System. It is DDTC’s cloud-based modernization replacement of the DTRADE and EFS systems.
A: Persons subject to statutory or administrative debarment are generally prohibited from participating directly or indirectly in ITAR-controlled activities, such as the export of technical data and other defense articles and the furnishing of defense services for which a license or other approval is required. Also, pursuant to ITAR § 127.1(d), it is a violation for a person with knowledge that another person is ineligible under ITAR § 120.16(c), which includes debarred parties, to, among other things, apply for, obtain, or use an export control document on behalf of a debarred party, or participate in a transaction subject to the ITAR that will benefit a debarred party, without first obtaining DDTC’s approval.
DDTC has specified the consequences of debarment in the ITAR, and the Federal Register Notices announcing the debarment provide further detail regarding the debarment. DDTC does not impose any restrictions on a debarred party’s eligibility to obtain banking services, engage in real estate transactions, purchase automobiles, or participate in any other activity not controlled under the ITAR.
Brokering
No. The company is acting on its own behalf. Ultimately the potential foreign assistance or sales program would potentially result in a secondary sales contract between the USG and one or more companies and when ITAR 129.5(a)(2)(i) an exemption from requirement for approval provisions are met such activity would be exempt from broker approval.
A: If truly employed by the U.S. person, the foreign person is NOT considered a broker when performing the U.S. person’s business (must be within the scope of the employment authorization) since he/she is a company employee.
A: Broker reports are due with broker renewal submissions (i.e., for persons already registered as brokers). The report must cover all brokering activity not the subject of a prior broker report. Broker reports must cover all brokering activity up to three months prior to the expiration of your broker registration. For example, if your registration expires at the end of November 30, 2013, then your broker report would cover the period from January 1st to August 31st. For subsequent years, your broker report would include a trailing 12 month period, e.g., September 1, 2013 to August 31, 2014.
Broker and Registration
A: The consultant's business, which is registered as a broker subject to U.S. jurisdiction, who subsequently hires an independent contractor, would be able to have the contractor covered under the consultant's broker registration to the extent the contractor meets the regular employee definition under ITAR Section 120.64. This would mean that the contractor is in a long-term contractual relationship (one year or more), the contractor works at the U.S. company's facility and under the direction and control of the consultant, works full-time exclusively for the consultant, and executes a non-disclosure certification, etc. If the contractor does not meet the regular employee definition, is subject to U.S. jurisdiction, and will be performing brokering activity, then the contractor would need to have its own separate broker registration. If the contractor is not subject to U.S. jurisdiction per ITAR Section 129.2(a), the contractor would not have to register as a broker under the ITAR.
Broker and Licensing
A: Yes. When the activities taking place under an agreement include brokering activities, the agreement must clarify that brokering activities will occur. The “Whereas” clause for the party conducting brokering activities must state that the activity constitutes brokering activity. DDTC understands that in some cases, signatories may perceive a potential problem based on other nations’ definitions of the word “brokering.” In these situations, DDTC recommends that the ITAR definition of brokering be included in the body of the agreement. In the transmittal letter, applicants must identify the party(ies) that will conduct brokering (using the word “brokering”) under the TRANSACTION SUMMARY section.
A: No. Approval for brokering activities must be requested by the broker conducting the activities, so the only entity that may obtain Prior Approval of brokering activities through an agreement is the U.S. applicant and any of its owned/controlled U.S. and foreign subsidiaries/ affiliates that are identified in the agreement. If the U.S. applicant is not the broker, Prior Approval cannot be obtained through the agreement. When requesting Prior Approval through an agreement, the submission must specifically request Prior Approval and specifically detail the defense articles and related technical data and provide all other required data in accordance with ITAR Part 129.
A: Brokers may not obtain export licenses. U.S. Brokers that need to obtain export licenses must submit an exporter registration and request export licenses using their exporter registration code.
Voluntary Disclosures
A: If DDTC reached out to you with questions regarding a potential violation that you have not previously reported through a voluntary disclosure, please submit a complete and detailed response, attaching any requested or otherwise relevant documentation following the format and procedures for disclosures outlined in ITAR § 127.12 and reference the DDTC letter and the DTCC case number therein. This is referred to as a “Directed Disclosure.”
A: The ITAR mandates disclosures of certain types of violations. In particular, disclosures are required in certain cases involving (1) countries listed in ITAR § 126.1 (see ITAR §§ 126.1(e)(2), 126.16(h)(8), and 126.17(h)(8)), and (2) unreturned temporary exports of personal protective gear (see ITAR § 123.17(j)). Failure to disclose in such cases may itself constitute a violation of the ITAR.
For all other types of suspected violations, DDTC strongly encourages voluntary disclosure pursuant to ITAR § 127.12 by the party that may have committed a violation. DDTC may consider a voluntary disclosure a mitigating factor in determining the administrative penalty, if any, that should be imposed. Failure to disclose a violation may result in circumstances detrimental to U.S. national security and foreign policy interests and will be an adverse factor in determining the appropriate disposition of the violation. DDTC views voluntary disclosures as a positive step toward improving ITAR compliance.
A: DDTC strongly encourages the submission of tips by any person with information about another party’s potential violation of any export control provision of the AECA, the ITAR, or any order, license, or other authorization issued by the State Department under the AECA.
DDTC encourages a party submitting a tip to provide as much detail about the potential violation as possible. The process, information, and documentation described in ITAR § 127.12 may be helpful in assembling and providing a comprehensive and actionable report. DDTC treats such tips as confidential.
If you would like to report a ITAR violation that you did not commit, you can submit a tip (and request confidentiality, if appropriate) by accessing the DDTC website “Contact Us” page at this link: https://www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_contact_us,” then scroll down to “Contact the DDTC Response Team,” and click the “Email” button. The subject line of your email should clearly describe the submission as a notification to DDTC of a potential violation by a third party, rather than a voluntary disclosure. For more information, please refer to the “Report a Violation” page on DDTC’s website.
A: Any person submitting a voluntary disclosure pursuant to ITAR § 127.12 should initially notify DDTC immediately after a violation is discovered and then, if warranted, conduct a thorough review of all defense trade transactions where a violation is suspected (see ITAR § 127.12(c)(2) for requirements). If submitting an initial notification, which does not contain all the information required of a full disclosure, the disclosing party has sixty (60) calendar days from the date of the initial notification to conduct a thorough review of all defense trade-related activities to submit a full disclosure.
A: A detailed list of the information and documentation to include in a voluntary disclosure submission is provided in ITAR § 127.12(c)-(e). Voluntary disclosure submissions should also include: a first page with the disclosing party’s letterhead; the disclosing party’s contact information (including email address); documentation substantiating any claims made within the submission (e.g., proof of corrective actions, relevant compliance procedures in effect at the time the violation occurred, etc.); and a certification, signed by an empowered official (see ITAR § 120.67) or a senior officer, stating that all of the representations made in connection with the voluntary disclosure submission are true and correct to the best of that person’s knowledge and belief.
Moreover, if the disclosing party wishes to authorize DDTC to communicate directly with a third-party representative, such as a consultant or outside counsel, an empowered official or senior officer of the disclosing party should provide DDTC with a signed note on company letterhead identifying: (1) the name and full contact information of the third-party representative, and (2) the third-party representative’s relationship to the disclosing party. Please note that the third-party representative may not make the certification required by ITAR § 127.12(e) on behalf of the disclosing party.
For more information, please refer to the “Report a Violation” page on DDTC’s website.
Licensing
A: While the transmittal letter may re-state information already provided in the application, it will allow the applicant to provide further insight into the transaction as well as provide information not specifically required in the license application, i.e., related voluntary disclosure (VD), customs seizure. More importantly, DDTC is moving away from the "stand-alone" license application where no supporting documentation is provided. The inclusion of a transmittal letter re-stating the application information or providing further clarification of the transaction allows for a more robust license file.
A: This requirement ensures the current validity of the export request. To comply with this requirement it is recommended all purchase documentation must be dated. A letter of explanation must be provided for any purchase documentation not meeting this requirement.
A:
Draft
License request that has not been signed and submitted for a company.
Awaiting Signature
The license request is waiting for the Empowered Official’s review and signature.
Submitted
Empowered Official has signed the license request and is sent to DDTC for review.
In Review
DDTC has received and is reviewing the license request.
The license request status can be found in the Track Status page and the user must be part of an access group containing that license request, in order to see it.
Final
The license request has been fully processed and will be displayed in Track Status.
Rejected
The license request has been rejected by DDTC.
A: No for items physically (mechanically, electronically, etc.) incorporated into the aircraft. This does not include spare parts, components, etc. that are to accompany the aircraft during shipment, as these items must be accounted for separately as their own unique line item(s).
A: No. Both agreements and licenses are valid until their expiration. However, if a license is to be amended for reasons unrelated to Export Control Reform, then the category designations must be updated as well. For agreements, if a major amendment to an agreement is submitted, category designations must be updated; but if a minor amendment is submitted, category designations do not necessarily need to be updated. Furthermore, during the transition period, when information on an In Furtherance Of license does not match that which was presented in its parent agreement, the applicant should note the disparities on the cover letter (15.1) for that license. For example: “Gas turbine engines formerly designated USML Category VIII(b) here designated as Cat XIX(a).”
A: The parent company who is the holder of the registration code must be identified in the applicant section of the license application. If the supporting documentation is issued to or identifies a subsidiary of the parent, the subsidiary’s information must be provided in the subsidiary section of the applicant block.
A: Yes. Any export of U.S software source code, operating algorithms, signal processing algorithms, and/or program maintenance documentation must be compliant with DoD Guidelines for International Transfers of Software Documentation (including source code), dated 8 April 1997. The request MUST include a full description and explanation of all relevant software modules. Be sure to identify the modules proposed for release, as well as those that will NOT be released. Contact DTSA for a copy of the guidelines or answers to any questions you may have.
A: No. As ITAR § 120.60 makes clear, Puerto Rico is part of the United States, as are other locations including American Samoa, Guam and the U.S. Virgin Islands. No export occurs when a defense article is shipped to Puerto Rico. Therefore, no export license or other approval from DDTC is required.
A: Persons subject to statutory or administrative debarment are generally prohibited from participating directly or indirectly in ITAR-controlled activities, such as the export of technical data and other defense articles and the furnishing of defense services for which a license or other approval is required. Also, pursuant to ITAR § 127.1(d), it is a violation for a person with knowledge that another person is ineligible under ITAR § 120.16(c), which includes debarred parties, to, among other things, apply for, obtain, or use an export control document on behalf of a debarred party, or participate in a transaction subject to the ITAR that will benefit a debarred party, without first obtaining DDTC’s approval.
A: Citing relevant precedent cases assists the Licensing Officer in reviewing the proposed application by providing license and staffing history. It is requested that the cited precedent be for the same commodity and same end-use/end-user of the proposed application.
Defense Services
A: When a U.S. person is providing technical data/defense services to a foreign person, they may need a translator/interpreter to facilitate the communication. If a translator/interpreter is merely facilitating communication between a U.S. person and a foreign person, DDTC does not consider the translator/interpreter to be furnishing a defense service. If any defense articles, including technical data, are disclosed to the translator/interpreter, and that translator/interpreter is a foreign person, such a disclosure constitutes an export or reexport in accordance with ITAR §§ 120.50 or 120.51, respectively. The medium does not change this analysis: such a disclosure can be spoken or written.
Commodity Jurisdiction
A: If you are unable to determine the classification of an item after reviewing the USML and Commerce Control List per the Order of Review (see ITAR §120.11), you may submit a commodity jurisdiction determination to DDTC.
Manufacturing License Agreements
A: The continued use and exchange of the technical data previously authorized for export among the same foreign signatories, sub-licensees and end-users is generally permitted even after the agreement has terminated or expired. However, the foreign parties may not continue to use the technical data to manufacture absent separate authority. The foreign parties must seek approval from DDTC via a General Correspondence request to continue manufacturing using ITAR-controlled technical data after the expiration of an MLA. If the continued manufacturing activity requires the furnishing of a defense service by a U.S. person, then separate DDTC authorization would be required.
A: Yes. ITAR § 120.57(d) provides that an MLA is an agreement “whereby a U.S. person grants a foreign person an authorization to manufacture defense articles abroad” and involves either (1) exports of defense articles, including technical data, or the performance of a defense service, or (2) the use by the foreign person of technical data or defense articles previously exported by the U.S. person. Thus, an MLA would be appropriate even if no manufacturing know-how is transferred. DDTC may authorize a manufacturing activity under a TAA when it meets all the conditions of ITAR § 124.13 and only limited defense services are furnished (e.g., quality control). Alternatively, if no defense services will be furnished and all the conditions of ITAR § 124.13 are met, an offshore procurement license may be appropriate.
What is Not an Export
A: In the case of section 120.56(b) that would be where a regulated person provided access information to a foreign person, such that the foreign person could access, view, or possess encrypted technical data in an unencrypted form through the use of that access information and the foreign person is not authorized to have the technical data.
AUKUS Exemption
A: The foreign person, in their capacity as a natural person, must become an Authorized User to avail themselves of the exemption. A DDTC authorization (e.g., DSP-5 FPE license) would be required for the transfer of any technical data beyond the scope and limitations of the ITAR § 126.7 exemption. This would include, for example, transfers of defense articles described on the ETL.
A: Exporters of defense articles must electronically file Electronic Export Information (EEI) using the AES citing code “126.7” in the appropriate field in the EEI for each shipment. This new code appears in the existing AES drop-down menu.
A: The Authorized User list in DECCS is the official, up-to-date record of Australian and United Kingdom Authorized Users. DDTC will update the Authorized User list as needed.
A: No. Legal entities incorporated in Australia or the United Kingdom are foreign persons, considered to be entities of those countries, and must enroll as Authorized Users through their governments to participate in transfers or activities pursuant to the ITAR § 126.7 exemption.
A: The list of Authorized Users of Australia and the United Kingdom is available in the Defense Export Control and Compliance System (DECCS). To access the list, you must enroll in DECCS, log-in, and navigate to the Authorized User list.
A: DDTC does not develop or support such third-party screening software and cannot speak to its integration with the Authorized User list.
A: The ETL that is applicable to ITAR § 126.7 is codified in Supplement No. 2 to Part 126 of the International Traffic in Arms Regulations (ITAR).
A: The International Traffic in Arms Regulations (ITAR) § 126.7 exemption simplifies the transfer of ITAR-controlled defense articles, including technical data, the performance of defense services, and engaging in brokering activities between and among Australia, the United Kingdom, and the United States within an approved Authorized User group of government, private sector, and research and academic entities. When all requirements are met, parties may engage in such activities without the need for additional Directorate of Defense Trade Controls (DDTC) authorization. More information on who is an Authorized User is available in a corresponding FAQ.
A. No. If an item is described on the ETL, it is ineligible for transfer under the ITAR § 126.7 exemption.
Expedited License Processing for United Kingdom and Australia
A: No. The expedited procedures described in ITAR § 126.15 are available only when the export application would authorize the export of defense articles or defense services to only Australia, the United Kingdom, or Canada. Any application that would authorize exports to parties in any other country will be subject to routine DDTC adjudication processes.
A: DDTC will apply the expedited licensing procedures to export license applications that qualify for expedited treatment under ITAR § 126.15 automatically. There is no need to request expedited treatment specifically. However, applicants always are encouraged to submit any information that they believe would help facilitate an expeditious and streamlined review by the Department.
ITAR Registration
- DDTC views joint ventures as separate legal entities, rather than as a subsidiary or affiliate of the parties to the joint venture agreement. If the entity formed from a joint venture will be engaging in military or defense related activities that are subject to the ITAR, the joint venture entity must separately incorporate and register with DDTC.
- If a DDTC registered entity enters into a joint venture that results in 50% or more ownership of the new entity, the joint venture must be added to the registrant’s existing DDTC registration as a subsidiary. The same rule applies even if it is a foreign incorporated joint venture. Alternatively, if the DDTC registered entity owns less than 50% of the joint venture but is responsible for managing the day-to-day operations of the joint venture, then the joint venture entity would still be added to the existing DDTC registration and listed as a controlled affiliate.
- If a joint venture entity is equally owned (50/50) by two DDTC registered companies and control of business operations is also equally shared, then DDTC will consider other factors in deciding under which entity the joint venture will be registered, such as which of the registered entities is engaging in more ITAR specific activities or projects. If the joint venture is independently managed, then the joint venture entity must register with DDTC independently.
- If a U.S. incorporated joint venture is managed by foreign persons but will be engaging in ITAR-controlled activities, a U.S. person must be appointed as a senior officer for the U.S. joint venture and the joint venture can then apply for independent DDTC registration. If no U.S. person is acting as a senior officer of the joint venture, then it cannot register with DDTC and cannot conduct ITAR-controlled activities.
A: Yes, but only if an applicant includes administrative, material, and Mergers, Acquisitions and Divestitures (MAD) changes within the annual renewal submission. However, if the amendment is executed more than 60 days prior to the registration expiration date, then an applicant must submit a standalone amendment via the ‘Amend’ option in DECCS Registration Dashboard.
A: The Directorate of Defense Trade Controls (DDTC) conducted a multi-year assessment to calculate the new registration fees. The new registration fees are based on several factors, including the last 15 years of inflation, technological advancements, and advancements in support services.
A: Registrants whose fees are greater than $4000 may appeal to the Department for consideration of an alternate payment schedule. To be considered, registrants must provide proof that the registration fee is greater than 1 percent of the total sales in the given year. "Total sales" includes domestic and international sales and is not limited to sales of items controlled on the USML. Applicants must submit a request for special consideration to DDTC not less than 30 days prior to registration expiration. Any request received within the 30-day window will be automatically disapproved.
A: A favorable determination is an approval, an approval with provisos (sometimes also referred to as an approval with conditions), or written authorization from the Directorate of Defense Trade Controls (DDTC) to conduct an activity regulated by the International Traffic in Arms Regulations (ITAR). An application that is returned without action or denied is not a type of favorable determination.
A: The fee for first time registrants is set at $3,000 (manufacturers/exporters and brokers). However, persons registering as a manufacturer/exporter may also simultaneously register as a broker with a consolidated DS-2032 Statement of Registration and not be charged a separate broker registration fee.
A: The review time of a 5-Day MAD Change may vary significantly based on several factors, primarily for the following reasons:
- A party to the transaction submits a 5-Day MAD Change that DDTC finds to be deficient, requiring the submission to be Returned Without Action (RWA).
- A party to the transaction submits a 5-Day MAD Change within a registration renewal that DDTC finds to be deficient, requiring the submission to be RWA’d.
- A party submits supporting documents that omit required information, such as ITAR Registration Code, or misidentifies the parties to the transaction.
- A party fails to submit a required ITAR 122.4(a) 5-day notice.
- A party fails to submit a required ITAR 122.4(b) 60-day pre-notification.
- A party’s 5-Day notice does not adequately explain the transaction, fails to identify the surviving and/or expiring ITAR Registration Code, is not on company letterhead signed by a senior official identified in the DS-2032, or lacks other required information.
- The size and scope of a transaction (e.g., multiple parties.) may impact review time.
To ensure your 5-Day MAD Change is processed in a timely manner, please review the Sample 5-Day Notice for examples of the required documentation prior to submitting your amendment via DECCS Registration Dashboard.
A: Yes, but only if an applicant includes administrative, material, and Mergers, Acquisitions and Divestitures (MAD) changes within the annual renewal submission.
However, if the amendment is executed more than 60 days prior to the registration expiration date, then an applicant must submit a standalone amendment via the ‘Amend’ option in DECCS Registration Dashboard.
A: Registrations submitted in DECCS can be tracked in the DECCS registration application on the Registration Dashboard page under the “In Progress” or “Active Registration” sections.
It normally takes 30 days on average from the time the registration application is submitted for DDTC to adjudicate your registration. Once the review has been completed and approved, the Registration Dashboard with be updated to show the new status of the registration application. Please refer to What are the Registration Status Definitions? (KB0011498) for details on the various Registration Status Codes.
ITAR Canadian Exemption
A: It depends, a Canadian citizen residing in Canada, registered with the Canadian Controlled Goods Program, or employed by a Canadian company registered with the Canadian Controlled Goods Program might be eligible for the ITAR Canadian Exemption dependent on the purpose for the transfer of the ITAR technical data, refer to the DDTC article.
A Canadian citizen living and working in the US under visa, working for a US company, would require an ITAR license to look at an ITAR technical data.
A Canadian citizen crossing the border and working in the US under visa, working for a US company, would require an ITAR license to look at the ITAR technical data.
U.S. Persons Working Abroad
A: It will depend on the individual circumstances and what your role is in the entity. The ITAR
regulates the furnishing of defense services. You would be furnishing a defense service as defined in
ITAR §120.32(a) if you, as a U.S. person, provide assistance to a foreign entity in a foreign country
and that assistance relates to the design, development, engineering, manufacture, production,
assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction,
processing or use of a defense article; furnish technical data; or provide military training to foreign
units and forces.
A: That will depend on whether you are permanently residing in the United States or abroad.
Registration is not required if you both physically reside and provide the defense service outside the
United States. Under ITAR §122.1(a), registration is required only for persons who engage in the
United States in the business of furnishing defense services or manufacturing, exporting, or
temporarily importing defense articles. If at any point you engage in the United States in the business
of furnishing defense services (to include remote work/telework), you would be required to register
with the Department unless otherwise exempted from the registration requirement as described in
ITAR §122.1(b).
A: Yes, a U.S. person who wishes to furnish a defense service is required to seek authorization from
DDTC pursuant to ITAR §124.1(a) prior to furnishing such a service, regardless of whether that
service is to be furnished within or outside the United States.
A: Although ITAR §124.1 provides for authorization by “manufacturing license agreement” or
“technical assistance agreement,” DDTC may at its discretion approve the furnishing of defense
services described in ITAR §120.32(a) by granting an authorization under ITAR §120.22(b) for
individuals located outside the United States. In most cases, DDTC will authorize defense services
furnished by U.S. persons to foreign employers via general correspondence and pursuant to
§120.22(b).
A: A USPAB authorization request consists of the following elements:
- Form DS-6004
- Submission letter
- Resume
- Detailed job description
- ITAR §126.13(a) certification
- Other supporting documentation
For more detailed information, refer to the “Guidance for USPAB Authorization Requests” document
located on the DDTC website at https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page
&sys_id=f9ccfe96dbb4130044f9ff621f961929.
A: In order to facilitate the most expeditious review of a USPAB authorization request, submit the Form
DS-6004 via the Defense Export Control and Compliance System (DECCS) website
(https://deccs.pmddtc.state.gov/deccs). Applicants do not need to be registered with DDTC in order
to use DECCS to submit a DS-6004.
For instructions on completing a DS-6004 for USPAB requests specifically, refer to Part 4 of the
“Guidance for USPAB Authorization Requests” document located on the DDTC website at
https://www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=f9ccfe96dbb4130044f9
ff621f961929.
A: Third parties may help facilitate the submission of ITAR §120.22(b) requests. However, third parties
may not submit “on behalf of” a USPAB. The applicant of a USPAB authorization request is the U.S.
PERSON. DDTC grants authorization for the U.S. person to furnish defense services, NOT for a
foreign employer to hire a U.S. person.
Furthermore, authorizations are issued to the individual U.S. person seeking to furnish defense
services, not to the prospective employer. The U.S. person is responsible for ensuring compliance
with the ITAR as the exporter of a defense service.
A: No. Each U.S. person is an individual applicant and requires an individual authorization.
A: Four years unless otherwise described in the authorization.
If there is any change in the scope of the defense services to be furnished by the U.S. person,
including the technical scope of work, the addition of defense articles, a change in the intended enduse platforms, or a change in recipients of defense services, a new authorization under §120.22(b)
will be required.
A: No. Adjudication decisions are based on the entirety of the applicant’s submission. A change in
employer will require a new authorization even if the job description and defense services to be
provided do not change.
The nationalities of the prospective foreign employer’s customers do not affect the registration or
authorization requirements applicable to a U.S. person. However, such factors may be assessed by
DDTC in determining whether to issue an authorization.
The mere presence or involvement of a U.S. person during the design, development, etc. of a foreign-origin defense article, or the provision of defense services that are authorized via a mechanism other
than a TAA or MLA, does not subject the resultant foreign-origin defense article to the ITAR or its
reexport/retransfer requirements. However, consistent with ITAR §124.8(a)(5), defense articles
“produced or manufactured from” technical data or defense services provided pursuant to a TAA or
MLA cannot be transferred to a foreign person, except pursuant to ITAR §126.18, as specifically
authorized, or with the prior written approval of the Department of State.
A: Foreign regulatory compliance requirements, including the GDPR, arise independently from the
ITAR and do not modify its requirements.
A: U.S. persons who believe they may have furnished or may be furnishing defense services without
authorization may submit a voluntarily disclosure to the Office of Defense Trade Controls
Compliance (DTCC) pursuant to ITAR §127.12(c). Such disclosures should contain all the
information requested in ITAR §127.12(c). Persons may still apply for a USPAB authorization while
their disclosure remains under DTCC review.
A: No. Pursuant to ITAR §122.1(a), any person who engages in the United States in the business of
furnishing defense services is required to register with the Directorate of Defense Trade Controls. If you furnish a defense service to a foreign person in the United States, you are required to register with the Directorate of Defense Trade Controls and obtain a separate authorization.
A: It depends on your residency status and your physical location while you are teleworking. An
authorization granted pursuant to ITAR §120.22(b) is intended for individuals who permanently
reside and work overseas. It does not authorize you to provide defense services while either
physically located in the United States or while permanently residing in the United States.
For further information, see the following FAQs:
- If I am a U.S. person providing a defense service to a foreign entity, do I need to register with DDTC?
- I have an existing USPAB authorization. If I travel to the United States for a technical
meeting or a trade show as part of my employment, is it covered by my authorization?
A: Your USPAB authorization is separate and distinct from the TAA. The TAA authorizes the applicant
on the TAA to export technical data or furnish defense services to your foreign employer under the
conditions of the TAA. It does NOT authorize you to furnish defense services to your employer or
any other foreign party unless you are a signatory to the TAA. If you are not a signatory, you will
need a USPAB authorization in order to provide defense services to your foreign employer.
A: It depends on whether the amendment affects the scope of your USPAB authorization. Any change to
the scope of your authorization, to include a change in the defense services to be furnished by you,
the technical scope of work you perform, or the addition of defense articles or recipients of defense
services, will require a new USPAB authorization.
A: Yes. You may request authorization for actual or potential recipients of defense services. However, it
is your responsibility to communicate with your employer to ensure that you are working within the
bounds of both your USPAB authorization and any applicable TAA. If the TAA amendment is not
executed, your employer may not be authorized to transfer defense articles, including technical data,
to the potential parties, even if they are authorized to receive defense services from you personally in
your USPAB authorization.
A: Authorization letters are electronically sent to the to the applicant’s email address as provided in the
application. If it has been more than a week since the case closed in DECCS, check your junk mail
folder. Authorization letters will come from DDTCPaperCase@state.gov. If after checking your
spam folder you find that you still have not received the authorization, email the USPAB Case Status
Orgbox at PM-DTCL-USPAB-Status@state.gov.
A: It depends on whether you will be furnishing a defense service to these parties. Defense
services furnished to any foreign third parties to include vendors, subcontractors, actual and
potential customers, or other foreign entities with whom you may work directly, even when
done on behalf of your foreign employer, are considered defense services to those parties
and require authorization. For instance, engaging in technical discussions with a customer or
subcontractor in which you furnish assistance in the development of a defense article would
be considered the furnishing of a defense service to both your foreign employer and the
customer/subcontractor. Authorization for third parties may be requested by specifically
identifying these parties in your application as recipients of defense services.
If you are unsure whether the activities in which you will engage constitute a defense
service, you may submit a commodity jurisdiction request.
A: That will depend upon whether you are permanently residing in the United States or abroad. Registration is not required if you both physically reside and provide the defense service outside the United States. Under ITAR § 122.1(a), registration is required only for persons who engage in the United States in the business of furnishing defense services or manufacturing, exporting, or temporarily importing defense articles. If at any point you engage in the United States in the business of furnishing defense services (to include remote work/telework), you would be required to register with the Department unless otherwise exempted from the registration requirement as described in ITAR § 122.1(b).
A: Authorization letters are electronically sent to the to the applicant’s email address as provided in the application. If it has been more than a week since the case closed in DECCS, check your junk mail folder. Authorization letters will come from DDTCPaperCase@state.gov. If after checking your spam folder you find that you still have not received the authorization, email the USPAB Case Status Orgbox at PM-DTCL-USPAB-Status@state.gov.
Licensing of Foreign Person Employees
A: No, individuals granted DACA status do not fall withing the ITAR definition of a U.S. person (ITAR § 120.62) by virtue of the issuance of their DACA status. Issuance of an employment authorization document by U.S. Citizenship and Immigration Services to such recipients does not mean that an individual is a lawful permanent resident or a protected individual as defined in 8 U.S.C. § 1101(a)(2) or 8 U.S.C. § 1324b(a)(3).
A: Under the ITAR, a person is either a U.S. person or a foreign person. If a person meets the definition of a U.S. person at ITAR § 120.62, by definition they are not a foreign person as defined in ITAR § 120.63. This means that a U.S. person who is a citizen of a foreign country (e.g., a lawful U.S. permanent resident who is not a U.S. citizen) is a U.S. person and not a foreign person. Similarly, a U.S. person who is a U.S. citizen and also holds the citizenship of another country is a U.S. person and not a foreign person.
A: A foreign person is considered an employee when the foreign person is a full time regular employee, directly paid, insured, hired/fired and/or promoted exclusively by the U.S. person. The employee, however, need not LIVE in the U.S. to be employed by the U.S. person. The U.S. person is liable to ensure all foreign person employees are compliant with U.S. export laws regardless of residence.
A: Freight forwarders should not be identified in agreement submissions. Freight forwarders should only be identified in licenses in furtherance of (IFO) an agreement. See the DDTC Agreement Guidelines when utilizing the § 123.16(b) exemption regarding how to identify freight forwarders.
A: The foreign freight forwarders should be identified on the DSP-5 in furtherance of the WDA for the original export of the hardware from a U.S. signatory to a foreign signatory of the WDA. Alternatively, such foreign freight forwarders can be included as sublicensees to the WDA. Lastly, a foreign signatory to the WDA may obtain retransfer/reexport authorization from DDTC to identify the foreign freight forwarders that transport the hardware to the authorized end user in the Distribution Territory of the WDA.
EAR 50% Beneficial Ownership Rule FAQs
A: No. BIS’s Affiliates Rule speaks only to ownership and not to control. An entity that is
controlled (but not owned 50 percent or more) by one or more listed entities is not considered to
automatically meet the Affiliates Rule criteria.
BIS also notes that the Affiliates Rule does not constrain the ERC’s ability to add an affiliated
entity that is under the 50 percent threshold when the ERC has reasonable cause to believe, based
on specific and articulable facts, that the foreign entity has been involved, is involved, or poses a
significant risk of being or becoming involved in activities contrary to the national security or
foreign policy interests of the United States, pursuant to § 744.11(b).
In addition, BIS notes that foreign parties with significant minority ownership by, or other
significant ties to (e.g., overlapping board membership or other indicia of control), an Entity List
entity, an MEU List entity, or an SDN subject to § 744.8(a)(1) present a Red Flag of potential
diversion risk to the listed entity. In this type of situation, additional due diligence is necessary,
especially given the opaque ownership structures and limited access to accurate ownership data
in certain jurisdictions.
A: The rule of most restrictiveness applies to §§ 744.8, 744.11, 744.21, and Supplement nos.
4, 7, and 8 to part 744 of the EAR. This means an entity owned 50 percent or more, directly or
indirectly, by multiple entities subject to EAR license requirements pursuant to some
combination of the Entity List, MEU List, or SDNs designated under programs listed in
§ 744.8(a)(1), is subject to the most restrictive license requirements, license exception eligibility,
and license review policy applicable to one or more of its owners under the EAR. Please note
that the Affiliates Rule applies if the total ownership by parties listed under all three programs
(Entity List, MEU List, and SDNs designated under programs listed in § 744.8(a)(1)) or parties
that meet the Affiliates Rule criteria is greater than 50 percent, even if the ownership by parties
listed on one of these lists alone is less than 50 percent.
A: Yes, the requirements for all listed entities on the Entity List, MEU List, and the
requirements in § 744.8 will now apply to all foreign countries. For example, suppose an entity
on the Entity List in China has a sales office in Malaysia. Prior to this IFR, that sales office was
not included within the scope of the Entity List license requirements, unless BIS also included it
on the Entity List or if an exporter, reexporter, or transferor (in-country) had information that the
item was intended for the listed Chinese entity. Now, the license requirements, license exception
eligibility, and license review policy applicable to the listed entity in China are applicable to the
sales office in Malaysia.
A: Yes. The adoption of the Affiliates Rule will mean that the Consolidated Screening List
(CSL) will no longer comprise an exhaustive listing of foreign entities subject to Entity List
license requirements. The CSL, for purposes of the Entity List, will only include the entities
listed on the Entity List and will not reflect these additional foreign affiliates of listed entities
that are owned 50 percent or more by one or more listed entities. Persons should screen proposed
transactions against the CSL and separately screen for purposes of the Affiliates Rule.
A: Yes, there are various private sector screening resources that may assist in compliance,
including vendors that conduct 50 percent ownership analysis already as part of their OFAC
compliance screening programs. BIS does not recommend or endorse any particular private
sector company, but notes that these types of screening resources are available. To assist
exporters, reexporters, and transferors in complying with the Affiliates Rule, BIS may also
follow OFAC’s practice of providing guidance regarding certain entities that may be subject to
the Affiliates Rule to facilitate compliance. To further support compliance, BIS may in certain
circumstances add those additional entities to the Entity List or MEU List.
A: As outlined in § 744.11(a) of the EAR, the use of license exceptions is generally
prohibited for almost all exports, reexports, and transfers (in-country) involving listed
entities. However, if one or more license exceptions are available for a listed entity, the
availability will be noted in the licensing requirements information specific to that entity, and the
license exception may be available for non-listed affiliates of the listed entity. For example, provided the export meets all of the requirements of License Exception GOV under
§ 740.11(b)(2) and is not otherwise restricted under any of the general restrictions on the use of
license exceptions under § 740.2, exporters could rely on this license exception to authorize an
export where the listed entity JSC Integral, listed under the destination of Belarus, is a party to
the transaction. See 87 FR 38920 (June 30, 2022). Accordingly, License Exception GOV would
authorize exports, reexports, or transfers (in-country) where an entity owned 50 percent or more
by JSC Integral is a party to the transaction, provided the same requirements on the usage of the
license exception are met. However, where a license exception is available for a listed entity, BIS
may choose to restrict the availability of that license exception for transactions involving nonlisted affiliates of the listed entity, which will be noted in the license requirements for the listed
entity. When an unlisted entity is owned 50 percent or more by multiple Entity List parties, and
only one such owner is eligible for a license exception, that license exception will not apply to
transactions involving the unlisted entity, because BIS will apply the most restrictive license
requirements to the unlisted entity.
A: Yes, the IFR adds new paragraph (c)(c) (Affiliates rule entities) to supplement no. 2 to
part 748—Unique Application and Submission Requirements—to provide additional guidance
for submitting these types of license applications.
• This new paragraph (c)(c) specifies that an applicant must specify “50 percent ownership
rule” in Block 9 (Special Purpose) of the BIS-748P “Multipurpose Application” form.
• The application also must specify the names of the listed party or parties that own an
aggregate 50 percent or more, directly or indirectly, individually or in aggregate, of that
entity or those entities) listed on the license application, including identifying the
percentage of ownership by listed parties and identifying the method that the applicant
used to make that determination.
• For license applications where the exporter, reexporter, or transferor cannot determine the
ownership percentage of a foreign entity that is an entity owned by one or more listed
entities on the Entity List or ‘military end users’ on the MEU List, the license application
must specify the names of the listed party or parties that own that entity and explain the
due diligence conducted to determine the percentage of ownership, including providing
an explanation for why percentage of ownership was not able to be determined.
A: Non-listed hospitals and medical centers, as well as any other non-listed affiliates, are
subject to the same restrictions as their Entity List owner(s), but may apply for modification of
their entries under §§ 744.16 or 744.21.
A: Yes, the Affiliates Rule revises the removal and modification process under § 744.16(e) to
specify that any foreign entity that is owned, directly or indirectly, individually or in aggregate,
50 percent or more by one or more entities listed on the Entity List or by non-listed entities
subject to restrictions under the Affiliates Rule, may request that its Entity List owner’s entry
listing be modified to exclude the requester. All such requests, including reasons therefor, must
be in writing and sent to: Chair, End-User Review Committee, Bureau of Industry and Security,
U.S. Department of Commerce, 14th Street and Pennsylvania Avenue NW, Room 3886,
Washington, DC 20230. You may also submit your removal request by email at
ERC@bis.doc.gov. See Q.16 above for removal requests. The Affiliates Rule also makes a
similar revision to the removal and modification request process under § 744.21(b)(2) for the
MEU List.
A: No, not unless you first obtain a license from BIS. Company B meets the criteria for the
Affiliates Rule and is subject to the same restrictions as Company A (its only listed owner).
Because Company C is 50% owned by Company B, it also meets the criteria for the Affiliates
Rule and is subject to the same restrictions.
A: It depends. If your prospective end user is 50% owned by a listed MEU, or by an unlisted
MEU that meets the criteria for the Affiliates Rule, your prospective end user meets the criteria
for the Affiliates Rule, and you may not proceed without a license if a license would be required
for export to the listed MEU. If your prospective end user is owned by an unlisted MEU that
does not meet the criteria for the Affiliates rule you should evaluate the prospective end user to
determine whether it independently meets the criteria for falling within the scope of a ‘military
end user’ under § 744.21(g).
Talk now with our ITAR and EAR consultants and attorneys for clear, practical guidance on your export compliance or licensing needs.