Archive for the ‘TAA’ Category

State/DDTC Posts Revision 4.4b of Guidelines for Preparing Agreements


(Source: State/DDTC)

Summary of Changes:

This revision reflects conforming changes to the latest ITAR updates from 81 FR 66804 and 81 FR 54732. It also adds administrative clarifications for some of the changes made in Revision 4.4. The changes from 81 FR 54732 will go into effect on 15 November 2016.

Conforming Changes Resulting from the latest ITAR Revisions:

  • Updates the DCS references to reflect the changes to § 123.9(b)(iv), § 124.9(a)(6) and §124.14(c)(7)
  • Adds a statement listing the sales territory to the § 124.7(a)(4) paragraph of MLAs
    • Sec 5.2.c.4, Appendix A – Tabs 3 and 7
  • Updates references to § 126.1 countries
  • Updates references from § 124.7 to § 124.7(a) to reflect the new ITAR designations*
  • Updates references from § 124.8 to § 124.8(a) to reflect the new ITAR designations*#

As there were over 100 instances of § 124.7 and § 124.8 in the Agreements Guidelines, and since the changes were purely administrative in nature, the updated references have not been highlighted in all instances.

This change affects all the required Option 2 DN/TCN request statements in Section 3.5.


  • Clarifies that conforming statement changes should be updated at the next amendment, whether major or minor
  • Clarifies that § 126.18(c) and § 126.18(d) are separate vetting options (Sec 3.5.b, Fig 3.1)
  • Clarifies how to update Space Insurance amendments when adding the conforming changes
  • Clarifies that Section 20.4.g applies to reexports and retransfers
  • Adds Appendix G – Summary of Changes from Revisions 4.4 and 4.4a

Applicants are not required to submit an amendment for the sole purpose of updating the revised statements in Revisions 4.4 and 4.4b, or to reflect other conforming changes. However, the conforming changes should be made at the next amendment, whether major or minor. All new agreement/amendment applications submitted after November 15, 2016, should conform to all the changes in Revision 4.4b. If the changes have not been made, provisos will be added instructing the applicant to make the changes prior to execution. Applicants may submit agreements that conform to the changes in Revision 4.4b prior to November 15.

Notes: The ITAR updates in 81 FR 54732 go into effect on November 15, 2016. Applicants are responsible for notifying their foreign signatories of these changes.

Existing NDAs remain valid. Sublicensees and DN/TCNs are not required to re-execute NDAs.

DDTC Posts Revision 4.4a of the Agreement Guidelines


(Source: State/DDTC)

Revision 4.4a of the Agreement Guidelines has been posted and replaces Revision 4.4.

Revision 4.4a corrects an inadvertent omission on page 152. Both Revision 4.4a and a preamble with a summary of changes can be found here. Revision 4.4a is effective September 1, 2016.

DDTC Agreements Guidelines Updated


On August 11, 2016, the Directorate of Defense Trade Controls (DDTC) announced its newest revision to the Guidelines for Preparing Agreements, which will become effective September 1, 2016. The changes will bring the Agreement Guidelines in line with certain revisions to the International Traffic in Arms Regulations (ITAR) that will also take effect on September 1, 2016.
Highlights of the changes:

  • Various sections of the Agreement Guidelines have been updated to reflect the new definitions for the terms “export,” “reexport” and “retransfer” that will go into effect on September 1.
  • Revision of Section 3.5: Dual/Third Country National (DN/TCN) to remove § 124.16 from Option 2, add references to § 126.18(d) in Option 1, redact the term “retransfer” from the guidance and required statements, remove country of birth as a consideration when vetting DN/TCNs via Option 2, update the required agreement statements for DN/TCN requests pursuant to § 124.8(5), and remove the optional agreement statement for § 126.1 non-(a) TCN requests.
  • The required statements throughout the Agreement Guidelines are updated, including the statement on sublicensing to U.S. Persons, the required statements for DN/TCN requests pursuant to § 124.8(5), and the § 124.8(5) verbatim clause.
  • Templates in Appendix A are updated to remove the § 124.12(a)(10) statement from the transmittal letter, remove the § 124.16 statement from the agreement, and update the required statements mentioned above.

Note:  Applicants are not required to submit an amendment for the sole purpose of updating these statements or removing the § 124.16 statement.  However, the statements must be updated at the next major amendment.  All agreement/amendment applications submitted after September 1, 2016, must include the new required statements, if applicable.  If an old statement is used, a proviso will be added instructing the applicant to change it prior to execution.  Applicants may begin using the new statements prior to September 1.

The templates in Appendix A have been updated to: – Remove the § 124.12(a)(10) statement from the transmittal letter – Remove the § 124.16 statement from the agreement – Update the mandatory statements listed above.

Revised Guidelines:

Summary of Changes:

DDTC Publishes Proposed Change for Employees of Non-US End-Users and Consignees


By: John Black

One it is only a proposed rule, so it does not help anybody yet.  But if DDTC ever implements this proposed change, it will have made a big step in the direction of making life easier for countries who deal with US defense articles.  This proposal, if implemented, would, for example, eliminate the requirement that foreign (i.e., non-US) end-users and consignees on Technical Assistance Agreements and Manufacturing License Agreements first identify the nationalities of their dual national and third country national employees in the agreement application and thereafter limit access to US defense articles to only those nationalities approved on the application.  Of course, all burdens eliminated by one hand must be replaced by burdens imposed by the other hand—we will look at the details of the proposal below.

If implemented, this proposal would immediately reduce the number of ITAR violations.  First, if implemented, the proposal would bring into compliance those foreign companies who currently are allowing unauthorized dual and third country nationals to have access to US defense articles. Second, if implemented, it would bring into compliance those US companies who have failed to collect the currently required non-disclosure agreements from all of those dual and third country national employees of the foreign parties.  (As we say in the South, now bless your little non-compliant hearts, we know yall aren’t complying will all of that.  Haha)

So what has DDTC proposed to do?  DDTC proposed to create an ITAR 126.18 exemption.  (By the way, wouldn’t it be nice if DDTC put all of its exemptions together in one place so that for the rest of our lives we are not always required to remember all of the obscure places that DDTC hides exemptions in the ITAR?)  The proposed exemption would allow the transfer of defense articles including technical data within a foreign entity to all bona fide, regular employees of the foreign entity, including dual and third country nationals.  The authorized transfers have to occur where the foreign entity is located—so, a French company can transfer US ITAR data to its Estonian engineer Sven when he is in the company facility in Toulouse, but the French company cannot email the ITAR data to Sven if he is in Canada in a hotel or at an affiliated company site or if he is in DC at an SIA seminar.

Oops, sorry for pointing out a problem, this is a feel good article.

In exchange for not having to get ITAR authorization for all dual and third country nationals, the foreign party has to do three things.  First, the foreign party must implement “effective procedures to prevent diversion destinations other than those authorized.”  The effective procedures can be either of these:

  • A security clearance approved by the host nation government for its employees; or
  • The foreign party has a process in place to screen its employees and have signed non-disclosure agreements that provides assurances that the employee will not transfer any information to other persons unless authorized by the foreign party.

Second, in addition to choosing one of the above “effective procedures” the foreign party “must screen its employees for substantive contacts with restricted or prohibited countries listed in 126.1 [e.g., China].  Substantive contacts include, but are not limited to, recent or regular travel to such countries, recent or continuing contact with agents and nationals of such countries, continued allegiance to such countries, or acts other indicating a risk of diversion.”

(So Sven the Estonian engineer in the French company is ok, but what if his wife is a Chinese citizen?  Does marriage constitute “recent or continuing contact with …nationals of [China]”?  And what does the French company have to do to determine if Sven is having continuing contact with a Chinese national?  Hahaha.)

Ok, let’s get serious again.  Check out this from the proposed rule, “Though nationality does not, in and of itself, prohibit access to defense articles or defense services, an employee that has substantive contacts with persons from countries listed in § 126.1(a) shall be presumed to raise a risk of diversion, unless DDTC determines otherwise.”  This implies that the exemption applies to all employees of the French company, regardless of their nationality, as long as they don’t have substantive contacts with 126.1 persons.  So, apparently the French company can share the US defense articles with Shao Shin, its employee with dual French-Chinese citizenship as long as he does not have substantive contact.

But wait, some ITAR hardcore nerds are no doubt thinking to themselves, what does nationality mean anyway?  Is it country of birth?  Citizenship?  Favorite Olympic team?  This rule does not define nationality, that is another issue, but it seems to lessen the significance of that question.

The third thing the foreign party would have to do is “maintain a technology security/clearance plan that details its procedures for screening employees for such substantive contacts and maintain records of such screening. The technology security/clearance plan and screening records will be available to DDTC or its agents upon request.”

So, there you have it.  The proposal significantly eliminated the pesky dual and third country national issues at foreign entities, as long as the foreign entities are will to do those three things.  If this rule is implemented, it would make life significantly easier and more compliant for US exporters.  Foreign entities will have to determine for themselves whether this proposed approach is better than the current system.

If you really read this proposal carefully and closely, you will see that some things are not perfectly clear.  I didn’t really do a thorough analysis of the details of the proposal, because this is just a proposal so it does not matter if we know what it really means.  If you see things that are not clear or you don’t like, you can complain about them.  But, better yet, you can actually send your written comments to DDTC until September 10, 2010, to tell DDTC what it should do to make the proposal clearer or better.

The proposal is not perfect, for sure.  But it certainly has a lot of merits.  I applaud this step in the right direction.  Credit for this proposal goes to the President’s Task Force for Export Control Reform.  And, while I still am not a believer in the Task Force’s goal of creating a single export control agency, control list and regulation, I salute this proposal.

For the details of the proposal and to see how to submit your public comments, go to

DDTC Changes Proviso Reconsideration/Clarification Requirements for Licenses


By: John Black

DDTC announced on its website the new procedures you have to follow to request a reconsideration or clarification of the provisos on an approved license.  Under the new procedures, you have a choice: Either submit a General Correspondence (GC) request or submit a Replacement Authorization license application.

Importantly, this new procedure applies only to licenses, not to agreements.  If you want to request proviso reconsideration or clarification for an approved agreement, you have to follow the procedures in the new Electronic Agreements Guidelines.  And, as you will see, if you want proviso reconsideration or clarification for a paper agreement, you have to first re-baseline that agreement as an electronic agreement.

For details on how to request proviso reconsideration or clarification for licenses go to:

Some Nuts and Bolts of New ITAR Agreements Requirements



By: Danielle McClellan

On December 19, 2007, an amendment to the ITAR was published that revised the licensing procedures with regards to third party/dual nationals for technical assistance and manufacturing license agreements. It is no longer required that additional approval for a release of technical data, defense services, and access to defense articles for third part/dual national employees from NATO, EU, Australia, New Zealand, Japan, and Switzerland. (more…)

DDTC Announces New Dual and Third Country National TAA and MLA Rule



By: John Black

“Beware of apparently good news.” — John Black

In the December 19, 2007 Federal Register, the Directorate of Defense Trade Controls (DDTC) of the State Department announced its new policy for dual and third country nationals. The change primarily is related to the requirement that when you apply for a Technical Assistance Agreement (TAA) or Manufacturing License Agreement, you must identify the foreign nationalities of the foreign signatories to the agreement. (more…)

ITAR Rumors from Washington



By: John Black

Well, these are a bit more solid than rumors:

First: the State Department has said that it relaxed its burdensome dual-national/third country national requirements for foreign nationals from NATO, Australia, Japan and New Zealand. If an employee of a company on a TAA or MLA is a national of one of these countries, they will be considered to be authorized to receive the US defense articles covered by the TAA and MLA and the applicant will no longer be required to obtain a non-disclosure agreement form such nationals. This policy change should reduce the current TAA and MLA burdens once (if) the State Department actually implements the policy.

Second: State plans to put out new brokering regulations soon. We will not know if this is good news or bad news until the regulations come out.

Australian Ministry of Defence Memo: Expedited Treatment for ITAR Exports; Special Dual National Policy



By: John Black

Part 1: Expedited License Review

Don’t Tell Anybody-Expedited Treatment Available for ITAR Exports to Australia?

According to Kerry Clarke AO, in the Australian Department of Defence, the US State and Defense departments have agreed to give streamlined processing for exports to Australia under two new policies known as Expedited License Review I (ELR I) and Expedited License Review II (ELR II).

But, according to Kerry Clarke, the expedited processing might not yet be in operation and is “dependent on the continued implementation of D-Trade — [which] — the State Department hopes — to have fully implemented by the end of 2007. Until then, licence and TAA approvals may take longer than the 10 and 30 day target times, but hopefully less than the current approval times.”

(Not sure I agree with the hopefulness of Kerry Clarke.)

OK, so the bottom line appears to be that the expedited system might not be in operation yet and hopefully it will be up and running by the end of the year. (I personally am not going to use up my limited supply of personal hope hoping for streamlined processing. I plan to spend all my hope on hoping I win the lottery so I can retire to the mountains.)

Anyway, according to an Australian Department of Defence memo (see end of this article for a copy), here are the two expedited procedures the US and Australian agreed upon:


ITAR Regulations on Dual-Nationals Could Cause Delays in Canadian Contracts



By: Jill Kincaid

US ITAR regulations are causing delays, and possible cancellations, in defense contracts between the United States and Canada. Briefing notes to Canada’s Defence Minister, Gordon O’Conner from last year show that American regulations have caused so many delays in Ottawa that the Canadian government had considered canceling a project to replace their 40-year old Sea King helicopters with 28 American-built Sikorsky Cyclone helicopters.The situation is resulting from the conflict between the ITAR’s regulations on dual-nationals and Canada’s anti-discrimination laws. US regulations prohibit Canadians with dual citizenship from having any contact with regulated materials or information. This has created a real dilemma for Canadian defense companies who risk breaking Canadian laws by releasing employees from working on sensitive US contracts. Sources close to the “Sea King” project state that juggling employees to comply with US regulations is costing Canadian companies a lot in time and money.

Canadian officials have refused to sign certain TAA’s and licenses which contain ITAR restrictions because they say they call for discrimination against Canadian citizens. This, also, is causing delays on the production and delivery of the Cyclones.

As General Motors in London, Ontario was recently fined $20 million for failing to comply with ITAR regulations relating to dual-nationals, Canadian companies know well the risks of non-compliance.

Upcoming Canadian purchases of Boeing helicopters and Lockheed-Martin planes could also be hindered by the problems.


  •, March 26, 2007