US State Department Amends International Traffic in Arms (ITAR) Regulations – International Trade & Investment

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The Department of State amends the International Traffic in Arms Regulations (ITAR) to better organize the purposes and definitions of the regulations. The ITAR governs the manufacture, temporary export and import of defense articles (including technical data), the provision of defense services, and brokering activities involving defense articles. The ITAR is regularly updated and revised to reflect changes in technological developments and the national security and foreign policy interests of the United States.

It is the mission of the Directorate of Defense Trade Controls (DDTC) at the Department of State to ensure that commercial exports of defense articles and services advance national security and United States foreign policy. The recent interim rule announcement from the DDTC concerns the amendment of the ITAR to better organize the objectives and definitions of the regulations. This rule consolidates and co-locates authorities, general guidelines and definitions and will come into effect on September 6, 2022.

This initial ITAR change has been overdue for some time and it should not be the last of the major changes. Rather, these most recent proposed changes are likely the first in a series of updated rules to restructure the ITAR.

It is imperative that companies that are – or may in the future – be involved in defense technology are aware of how they may be affected by the proposed changes to ITAR. It is generally expected that there will be a strong response to the DDTC’s Interim Final Rule through the public comment process. Additionally, industry players are more frequently turning to requests for advisory opinions from the Department of State and legal counsel to resolve potential obligations and liabilities under the law.

Other substantial changes are expected to be made to the ITAR, including changes to the definitions of “technical data” and “defense services”. Perhaps just as important – and although some of these regulatory changes will take time – it is highly likely that there will be significant changes to exemptions, scope of brokerage activities, as well as updates to licensing process. These substantial changes will affect the ability of companies to take advantage of established license exemptions. Therefore, it will be crucial for organizations to consider how their existing policies, practices and licenses might be affected and prepare accordingly.

The Department of State will accept comments on this interim final rule until May 9, 2022.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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