State Dept Requires Electronic ITAR Registration Fees

(Currently, registrants submit registration fees to the Directorate of Defense Trade Control (DDTC) by check or money order, and these payments are processed manually. The Department states that the electronic submission of registration fees will simplify the collection and verification of payments, eliminate the need to manually process and collect returned payments, and eliminate the possibility of lost payments.)

ACH as Sole Means of Paying Fee for Mfrs and Exporters

The final rule revises 22 CFR 122.2(a) to state that manufacturers or exporters who submit the DS-2032 (Statement of Registration) to the Office of Defense Trade Controls Compliance must submit the associated fee electronically, via Automated Clearing House (ACH), payable to the Department of State.

(Intended registrants should access DDTC’s website at www.pmddtc.state.gov for detailed guidelines on submitting an ACH electronic payment, which are required to be in U.S. currency and payable through a U.S. financial institution. Cash, checks, foreign currency, or money orders will not be accepted.).

ACH or SWIFT as Sole Means of Paying Fee for Brokers

The final rule similarly revises 22 CFR 129.4(a) to provide for electronic payment as the sole means of registration fee submission for brokers,¹ but allows electronic payment via ACH or Society for Worldwide Interbank Financial Telecommunications (SWIFT).

(Payment methods (i.e., ACH and SWIFT) are dependent on the source of the funds (U.S. or foreign bank) drawn from the applicant’s account. The originating account must be the registrant’s account and not a third party’s account. Intended registrants should access DDTC’s website at www.pmddtc.state.gov for detailed guidelines on submitting ACH and SWIFT electronic payments. Payments, including from foreign brokers, must be in U.S. currency, payable through a U.S. financial institution. Cash, checks, foreign currency, or money orders will not be accepted.)

Intended Registrant Requirements Clarified for U.S. and Foreign Persons

Information regarding intended registrants in 22 CFR 129.4(a) is clarified in part, as follows (new text is underlined):

"The Statement of Registration and transmittal letter must be signed by a senior officer (e.g., Chief Executive Officer, President, Secretary, Partner, Member, Treasurer, General Counsel) who has been empowered by the intended registrant to sign such documents. The intended registrant, whether a U.S. or foreign person, shall submit documentation that demonstrates it is incorporated or otherwise authorized to do business in the United Statesin its respective country."

(See final rule for complete text.)

Transmittal Letter Certifications Incorporated into Revised DS-2032

As the certifications previously required through the transmittal letter referenced in 22 CFR 122.2(b) are incorporated into the revised DS-2032 (and only requires the user to click the appropriate response), these regulations no longer require a separate transmittal letter, and instead address the certifications, without substantive change.

(22 CFR 122.3(a) and 22 CFR 129.4(a) and (b) are also revised to remove reference to the transmittal letter.)

DS-2032 Revised to Indicate Need for Electronic Payment, Add Data Elements

The paper DS-2032 is revised to reflect that fee payments are to be made electronically, and includes additional data fields to match the electronic payment to the DS-2032. (New data elements specific to electronic payment were not previously required on the paper DS-2032 because such information is visible on U.S. and foreign bank drafts.)

Additionally, data elements are added to the paper DS-2032 to ensure clarification during analysis as well as standardization of responses. Specifically, necessary information is listed in the form, only requiring the respondent to make a selection by clicking the applicable checkbox rather than manually entering the information. The Department states that this enhancement eliminates typographical errors and the misinterpretation of information requested, which often results in the submission of incorrect information.

In addition, the form is added to the list of forms in 22 CFR 120.28(a) as available from the DDTC, and the estimated burden time for completion is reduced from two hours to one hour.

Definitions of Ownership and Control Renamed and Relocated

Definitions for “ownership” and “control” in 22 CFR 122.2(c) are moved and renamed (without substantive change) as “foreign ownership and foreign control” in new 22 CFR 120.37.

¹Broker means any person who acts as an agent for others in negotiating or arranging contracts, purchases, sales or transfers of defense articles or defense services in return for a fee, commission, or other consideration.

(See ITT's Online Archives or 02/24/11 news, 11022425, for BP summary of the proposed rule, which the Department has adopted as a final rule without change.)

State Dept contact- Lisa Aguirre (202) 663-2798

(FR Pub 07/28/11, Public Notice 7538)