State Dept. Provides Guidance on Handling Exports After Pratt & Whitney Debarment
The State Department provided the following guidance July 2 related to the June 28 U.S. District Court, D.C., guilty plea by Pratt & Whitney Canada to violations of the Arms Export Control Act (AECA) and International Traffic in Arms Regulations (ITAR). (See ITT's Online Archives 12062907). The plea resulted in a statutory debarment on P&W Canada (here).
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The guidance provides additional information to exporters on the terms and scope of the debarment and certain carve-outs from it, the impact of the debarment on other UTC entities, and requirements for submission of a request for an exception to authorize the inclusion of P&W Canada in a transaction that does not fall within the carve-outs from the debarment. It includes:
- The statutory debarment is applicable to P&W Canada only and not to UTC or to other subsidiaries and divisions of UTC.
- Associated restrictions extend to P&W Canada subsidiaries, divisions and business units, and successor entities, including Pratt & Whitney Kalisz Sp.z o.o., Pratt & Whitney Canada International, Inc., and Pratt & Whitney Canada Leasing, LP.
- The restrictions do not extend to entities managed, but not owned, by P&W Canada.
- Applications for licenses or other approvals submitted to DDTC that include P&W Canada, including its subsidiaries, divisions and business units, and successor entities, will be presumed to be denied and may be denied or returned without action, unless the application falls within one of the carve-outs.
- The term of statutory debarment is generally three years, but reinstatement is not automatic.
- All licenses and other approvals granted prior to the debarment are valid and are not affected.
- Authorization requests involving P&W Canada, including its subsidiaries, divisions and business units, and successor entities, which are pending with the Department as of June 28, 2012, will be Returned Without Action, unless a carve-out applies or a transaction exception request is submitted via DTrade2 by July 6.
- New applications for licenses or other approvals or the use of ITAR exemptions involving P&W Canada will be presumed to be denied unless they fall within one of the three carve-outs or a request is made for a "transaction exception" and the exception is granted.
- All submissions must specifically identify by name the relevant UTC subsidiary, division or business unit intended as a party to the transaction, or otherwise included in an authorization.Carve-outs from the debarment have been approved by the State Department, including those in support of U.S. Government programs, Coalition Operation Enduring Freedom efforts, or government programs for NATO and Major Non-NATO Ally (ITAR § 120.32) countries.
- The Department may consider on a case-by-case basis specific requests for authorizations or use of ITAR exemptions involving P&W Canada that are accompanied or preceded by a written "transaction exception" request. Criteria for grants include if the exception warranted by overriding U.S. foreign policy or national security interests, if the exception further law enforcement concerns consistent with the foreign policy or national security interests of the U.S., or if compelling circumstances exist that are consistent with the foreign policy or national security interests of the U.S.