DDTC Saw Uptick in Requests, Disclosures After Guidance on Exporting Defense Services Abroad
The State Department’s Directorate of Defense Trade Controls saw a “significant uptick” in license requests from foreign companies after the agency issued guidance on U.S. people exporting defense services abroad, DDTC Director of Licensing Catherine Hamilton said. The agency also saw an increase in voluntary disclosures as foreign companies realized they may have violated regulations, Hamilton said.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The guidance (see 2001070037), issued in January, clarified International Traffic in Arms Regulations requirements for U.S. citizens that are employees of foreign companies and that are working outside the U.S. In a series of frequently asked questions, DDTC said the employee or the company may need to apply for an authorization if their work with the company is subject to the ITAR “regardless of whether that service is to be furnished within or outside the United States.”
Speaking during a July 23 webinar as part of the Trade Practitioner Certification Series presented by Content Enablers, Hamilton said DDTC received an increase in requests “from our foreign partners that wish to either employ folks or found out that they were already employing them and that they’ve run afoul of the regulations.” That has also led to more voluntary disclosures, she added. “I expect that will be the new norm as folks now have clear bounds of what is required,” she said.
The agency plans to do more outreach with industries in foreign countries to make them aware of the ITAR requirements so they don’t unknowingly violate the controls, Hamilton said. “I expect in a non-COVID environment that we will increase our outreach,” she said. “Anytime that we're out meeting with foreign partners, this is something that we would highlight.”
Hamilton also said the agency is almost finished overhauling its guidance for technical assistance agreements, manufacturing license agreements and warehouse and distribution agreements, which she called a “monster to navigate.” The 225-page document will be reduced by half after DDTC found a “number of redundancies” between its guidance for agreements and licenses, she said, which created confusion for industry. “It will no longer hold your door open or raise your computer monitor off your desk,” she said. “It will actually be a much thinner product.”
She said DDTC will remove the information that applies to both agreements and licenses and will instead place it on its website in the form of FAQs. “The idea is that it's easier to update the FAQs as things need to be tweaked and changed over time, rather than having to do a new set of guidelines,” she said.