News from Reeves & Dola, LLP 
*** R|D ALERT ***

EXPORTERS MUST PREPARE FOR NEW 
DESTINATION CONTROL STATEMENT 

Beginning November 15, 2016 , exporters will be required to incorporate the new harmonized Destination Control Statement ("DCS") as part of the commercial invoice for tangible exports, reexports, and retransfers of items controlled under either the International Traffic in Arms Regulations (ITAR) or the Export Administration Regulations (EAR). The DCS shall read as follows:

"These items are controlled by the U.S. government and authorized for export only to the country of ultimate destination for use by the ultimate consignee or end-user(s) herein identified. They may not be resold, transferred, or otherwise disposed of, to any other country or to any person other than the authorized ultimate consignee or end-user(s), either in their original form or after being incorporated into other items, without first obtaining approval from the U.S. government or as otherwise authorized by U.S. law and regulations."

The State Department's Directorate of Defense Trade Controls (DDTC) and the Commerce Department's Bureau of Industry and Security (BIS) announced the harmonized DCS in Final Rules published concurrently in the Federal Register on August 17, 2016 (81 FR 54732 and 81 FR 54721, respectively). 

Exporters should note that the final rules remove the requirement for placing the DCS on other "transportation documents" like the bill of lading, air waybill, or other shipping documents. Both rules also clarify that the DCS is only required on items exported in tangible form. In addition to updating the DCS, the DDTC Final Rule makes revisions to the ITAR to provide guidance on the use of license exemptions for the export of items subject to the EAR that are shipped with ITAR-controlled items, as well as clarifies that items subject to the EAR are not defense articles, even when exported under an ITAR authorization.

We anticipate industry may face an initial burden to update internal systems to apply the new DCS.  The ultimate streamlining effect of a single DCS hopefully will make the effort worthwhile.
 
This Alert provides a brief summary of the changes made to the ITAR and EAR, but is not intended to be a substitute for reviewing the two Federal Register Notices (linked above). Companies should carefully review the new DCS requirements, in conjunction with this Alert.                 
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 an attorney-client relationship. 

Questions about this alert can be directed to: 

Johanna Reeves: 202.715.9941  | jreeves@reevesdola.com
Katherine Heubert:    202.715.9940 |   kheubert@reevesdola.com
About Reeves & Dola

Reeves & Dola is a Washington, DC law firm that specializes in helping clients navigate the highly regulated and complex world of manufacturing, sales and international trade of defense and commercial products. We have a deep understanding of the federal regulatory process, and use our expertise in working with a variety of Federal agencies to assist our clients with their transactional and regulatory needs.

Reeves & Dola, LLP
1775 Eye Street, NW, Suite 1150
Washington, DC 20006
202.683.4200