State Revises ITAR License Exemption for US Government to Allow Permanent Exports, Third-Party Use
The State Department is amending the International Traffic in Arms Regulations to make changes to its licensing exemption for transfers made by or for an agency of the U.S. government. The scope of the revised exemption is now expanded to allow for permanent exports and retransfers, as well as transfers by third parties acting for the U.S. government. The final rule takes effect April 19.
Paragraph (a) of ITAR Section 126.4 will now authorize transfers made by the U.S. government. New 22 CFR 126.4(b) will apply to transfers made for, or on behalf of, the U.S. government, State said. State also added various new provisions to each of the two paragraphs to clarify the conditions and requirements for the U.S. government licensing exemption.
Among other clarifications made to the previously existing regulations, the new provisions say that use by U.S. government contractors can be within the scope of official use by the U.S. government when the contractor is either operating within a U.S.-government controlled facility, or a U.S. government employee is “empowered and responsible to exercise control over the defense article.”
State removed “the requirement that the U.S. Government must conduct all aspects of the transaction,” it said. The agency also removes language that specifically identified technical data as eligible for the exemption, because technical data is a form of defense article, so listing technical data in addition to defense articles was “redundant and confusing.”
New paragraph (b) authorizes “transfers performed by another entity for a department or agency of the U.S. Government,” State said. “Third parties may only perform a transfer for a department or agency of the U.S. Government under this exemption when that department or agency would have been authorized to perform the transfer itself under paragraph (a).”
“Transfers by third parties directly to the U.S. Government overseas may be conducted at the request of the U.S. Government. Transfers by third parties to anyone other than the U.S. Government, including directly to any U.S. Government contractors, must be conducted pursuant to written direction from the U.S. Government department or agency, such as through contractual documents, or pursuant to an international agreement or arrangement,” the agency said.
On the other hand, “under no circumstances shall a transfer to any non-U.S. Government entity be authorized” under the new provision in 22 CFR 126.4(b)(1). “Each department or agency will determine for itself who is authorized to issue such written directions.”
(Federal Register 04/19/19)