DDTC AND BIS PUBLISH HARMONIZED DEFINITIONS
On June 3, 2016, the Directorate of Defense Trade Controls (DDTC) and the Bureau of Industry and Security (BIS) published in the Federal Register changes to the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR) to better harmonize certain defined terms that are used in both regulations. The effort to harmonize terms is part of the Obama Administration's Export Control Reform initiative, with the goal to provide better clarity and consistence between the EAR and ITAR. The Federal Register Notice making changes to the ITAR can be found
, and the changes to the EAR can be found
This Alert provides an initial summary of the critical changes, and is not intended to be a substitute for reviewing both Federal Register Notices. Companies should carefully review, in conjunction with this alert, the Interim Final and Final Rules.
REVISIONS TO THE ITAR
DDTC published its changes as an Interim Final Rule, making the revisions to the ITAR effective September 1, 2016, but allowing industry to submit additional comments on the rule until July 5, 2016. DDTC anticipates publishing a second proposed rule at a later time that will address additional revisions, including updates to the definitions for "technical data," "directly related," "'public domain," and the results of "fundamental research."
The sections of the ITAR affected by this Interim Final Rule are as follows:
- § 120.17 Export. Paragraphs (a)(1)-(6) have been updated to better align with corresponding definitions in the EAR. A new paragraph (b) has been added to to clarify that disclosing technical data to a foreign person in the United States is deemed to be an "export" to all countries in which the foreign person holds or has held citizenship or holds permanent residency.
- § 120.19 Reexport. This section has been updated to remove the reference to "retransfer," which has been given a new, distinct definition in §120.51 (see below). Section 120.19 has been revised to clarify that any movement of a defense article between two foreign countries or to a third country national foreign person outside of the United States is a "reexport" that requires authorization.
- § 120.50 Release. This section has been added to provide a stand-alone definition for "release." DDTC states that "the activities that are captured include allowing a foreign person to inspect a defense article in a way that reveals technical data to the foreign person and oral or written exchanges of technical data with a foreign person. The adoption of the definition of "release" does not change the scope of activities that constitute an "export" and other controlled transactions under the ITAR."
- § 120.51 Retransfer. This section has been added to clarify that a "retransfer" occurs when there is a change of end use or end user within the same foreign territory.
- § 123.28 Scope of a license. This section has been added to clarify the scope of a license, in the absence of a proviso to an approved application, and to state that authorizations are granted based on the information provided by the applicant.
- § 124.1(e). Paragraph (e) has been added to clarify the scope of an agreement, in the absence of a proviso to an approved application, and to state that authorizations are granted based on the information provided by the applicant.
- § 125.4(b)(9). This paragraph has been updated to clarify that foreign persons authorized to receive technical data in the United States will be eligible to receive that same technical data abroad, when on temporary assignment on behalf of their employer. The exemption also authorizes a "reexport" or "retransfer." A person travelling abroad may use this exemption to "export" technical data for their own use abroad. Technical data must be secured while abroad to prevent unauthorized "release."
- § 126.18 Exemptions regarding intra-company, intra-organization, and intra-governmental transfers to employees who are dual nationals or third-country nationals. This update removes "§124.16" in paragraph (a) and places "paragraph (d) of this section" in its place. A new paragraph (d) is added to consolidate §§ 124.16 and 126.18 within one exemption.
REVISIONS TO THE EAR
BIS published more sweeping updates to the EAR as a Final Rule, making the revisions to the EAR effective September 1, 2016. BIS does note that while there is no formal comment period associated with this Final Rule, public comments are welcome.
The revisions made to the EAR are
to update the following definitions to better align with corresponding definitions in the ITAR as follows:
- "access information"
- "foreign person"
- "proscribed person"
- results of "fundamental research"
- "transfer (in-country)" to to better align with corresponding definitions in the ITAR
In addition, the Scope of the EAR has been updated to and clarify application of controls to electronically transmitted and stored technology and software.
The above alert is for informational purposes only and is not intended to be construed or used as legal advice. Receipt of this alert does not establish, in and of itself, an attorney-client relationship.
Questions about this alert can be directed to: