DDTC Updates GC Guidance for Amending ITAR Authorizations for U.S. Entity Changes

DDTC issued its original guidance in January 2009 as it moved from making these changes via a DSP amendment for a DSP license, or a major amendment for agreements, to utilizing GC requests to reduce the administrative burden on industry and DDTC. DDTC notes that the use of a GC request is applicable regardless of the number of authorizations to be amended. (See ITT’s Online Archives or 02/06/09 news, 09020630, for BP summary of the original guidance.)

DDTC’s updated guidance makes minor language revisions to its original guidance, including the removal of specific references to the DSP-119¹.

(Pursuant to 22 CFR 122.4, a registrant must notify DDTC of all material changes to their registration file. These changes include restructuring, merger/acquisitions and/or registration code consolidations.

The licenses affected by these changes must be identified via a list to DDTC. Any licenses not identified on the list will be considered invalid. Affected agreements require an executed amendment for a U.S. entity name change within 60 days of notification. Any agreements not so amended will be considered invalid.)

Procedures for Amending ITAR Authorizations for U.S. Entity Changes

DDTC’s guidance continues to provide the following procedures for requesting an amendment to an existing DSP license or agreement via a GC request as follows:

Requests due within 60 days of change approval. The GC request to amend a U.S. entity name/address and/or registration code on an existing ITAR authorization should be submitted within 60 days after DDTC-Compliance (DTCC) approval/acknowledgement of the entity change.

Registrant/documentation requirements. The registrant notifying DDTC of the change is responsible for submitting a GC request for U.S. entity name/address and/or registration code changes. All requests for the transfer of licenses and agreements must include the following documentation:

1. A letter identifying the requested changes (see requirements below);
2. 22 CFR 126.13 certification letter;
3. Copy of the DTCC’s letter acknowledging the requested change(s), if issued; and
4. Matrix/spreadsheet of authorizations to be transferred (see requirements below).

GC letter requirements.The letter in the GC request must have a subject line clearly stating the GC request is to amend export authorizations due to restructuring, merger/acquisition and/or registration code consolidation, and must provide DDTC with a concise description of the proposed transaction, in particular identifying the registrant code of the acquiring company and the registration code of the company being acquired.

It must list the submitted documentation and specifically state if a DTCC letter is attached.

It must also include the following statement for the amendment of agreements as a result of mergers and acquisitions. If no executed amendment is required (such as registration code change only) then this statement is not necessary:

“Modifications to the existing agreements submitted as part of this letter are specifically limited to a change to the registration code and/or to the U.S. entity name as a result of an approved merger or acquisition, and are signed by the new U.S. entity, the former U.S. licensor and the foreign licensee(s). Any other modifications will be requested through a proposed amendment in accordance with 22 CFR 124.1(c) or (d).”

Spreadsheet requirements.The spreadsheet/matrix of authorizations to be transferred must include all existing and pending authorizations, and should be separated into existing authorizations and pending authorizations. Only those authorizations identified in the list will be amended. Any authorization not included will be considered invalid and a new authorization must be obtained. The spreadsheet/matrix must include the following information for each authorization:

1. Type of authorization (TA, MA, DSP-5, DSP-73, etc.)
2. License or agreement number (for agreements, the last approved amendment should be identified)
3. Country(ies) of export
4. Unshipped value for licenses/total value for agreements
5. Disposition of authorization (Approved or Pending Approval)
6. Date of Authorization Expiration
7. State Y or N if an executed amendment is required, for agreements only

(DDTC notes that affected agreements will be annotated its database but only those identified on the spreadsheet will be processed.)

Separate formal amendment for agreement name changes. For agreement amendments, if the U.S. entity’s name changes, an executed formal amendment must be submitted to DDTC under separate cover but the agreement must be listed in the GC request. The executed amendments must be submitted in accordance with 22 CFR 124.1(d) and cite the GC case number in the body of the cover letter. Prior written approval by DDTC-Licensing (DTCL) is required for any amendment making a substantive change.

(If only the registration code is changing with no resulting name change, the GC request is the only required action by the registrant.)

DDTC response spreadsheet. The DDTC response for the GC will include an annotated spreadsheet/matrix identifying any authorizations not amended. If no annotations are provided, then all requests authorizations have been amended.

Requirements for Third Parties Affected by Change

DDTC’s updated guidance continues to state that it will issue a Web notice acknowledging the U.S. entity change and providing instruction on third party² authorization holders as follows:

Third party licenses. When a third party license is affected by a U.S. entity name change, a DSP amendment will not be required to be processed for the affected DSP license. The DDTC-issued Web notice will serve as approval for the change and must be attached by the license holder to the affected license.

Third party agreements. When a third party agreement is affected by a U.S. entity name change, the agreement holder will be responsible for amending their agreement. The executed amendment will be treated as a minor amendment per 22 CFR 124.1(d) and must be submitted as such. The agreement applicant of a pending agreement/amendment request requiring change is responsible for notifying the assigned Agreements Officers. The necessary changes will be made prior to issuance when the Agreements Officer has been notified.

¹In September 2009, DDTC announced that DSP-119 forms may only be used to amend DSP-85 licenses, and that other license applications must be amended using the new D-Trade2 electronic amendment forms. (See ITT’s Online Archives or 09/29/09 news 09092925, for BP summary.)

²DDTC’s updated guidance states that a “third-party” is a U.S. entity other than the license holder who has submitted the GC request. (DDTC’s original guidance referred to the license holder as the “registrant.”