Interagency Review of ITAR Reorganization Expected This Summer, DDTC Official Says

Plans to reorganize International Traffic in Arms Regulations are ongoing despite what has been a lengthy legal review of the draft rules, a Directorate of Defense Trade Controls official said while speaking July 9 at the Bureau of Industry and Security annual export controls conference. Through a "series of rules we are trying to make the content of the ITAR more linear and more discernable," said Rob Hart, regulatory and multilateral affairs division chief in the Office of Defense Trade Controls Policy.

The first such rule will be for part 120 of the ITAR to move all the definitions to one place, he said. "We are close to getting this out of the building and into interagency review." That is "sort of a no brainer" and a "proof of concept for what we are trying to do for this process." Hart said his group finished a draft of the rule about a year and half ago but it has been under legal review since then. It's also hard to predict what will happen in the interagency review, he said.

The agency will follow that with a rule "to consolidate all the exemptions in one place," he said. There's an advance notice of proposed rulemaking in "interagency review right now" that will solicit feedback on which exemptions are and aren't working, Hart said. He said he hopes the notice will be out by this summer. The State Department mentioned some of these efforts within its regulatory agenda (see 1905240025).

The planned changes for U.S. Munitions List Categories I-III remain in limbo due to a hold from Sen. Bob Menendez, D-N.J., (see 1904230049), Hart said. "No final rule has been published for categories one through three, I'm sure you've noticed," Hart said. "Moving on," he then said quickly, to the laughter of the crowd. While there's some legal question as what that hold actually does, based on DDTC's notification to Congress "you can infer we've got drafts finished because we know what were intending to remove," he said. "That's really where it stands right now."

"We're getting pretty close to a proposed rule for" revisions to USML Categories VI, VII, XIII, and XX, Hart said. DDTC is still going through the comments from the notice of inquiry on changes to USML Categories V, X, XI and "you're going to see little rules here and there to address exigencies while we try and work on the rule writ large under separate cover," he said. The agency is also still going over the comments submitted on the notice of inquiry for Categories IV and XV (see 1903070037), Hart said.

DDTC is also working toward "something similar to what BIS has in place on end-to-end encryption." The agency is trying to "rationalize" the rules and "incentivize" the use of encryption, Hart said. "If they'll let us do it, it's going to be an interim final rule, so we'll get some feedback on it, but we want to get it out there and let people use it because it's been a long time coming," he said. "We want to do something that is going to be interoperable with Commerce's existing rule and we haven't heard a lot of bad news on how that's working out in the real world. So that's where we're trying to go with our own regulations."

The Defense Export Control and Compliance System (DECCS) continues to progress, said Karen Wrege, DDTC's chief information officer. The agency very recently received "authorization to operate" and it will "first test DECCS on our test server," she said. "We're going to ask industry participants to do new registrations, any kinds of licensing," she said. "We're going to start that process next month."

In light of a February settlement with Darling Industries involving the lack of a qualified empowered official, it may make sense to have licensing requirements for empowered officials, said Dan Cook, compliance and registration division chief in the Office of Defense Trade Controls Compliance. Asked whether licensing should occur in a manner similar to customs broker licensing, Cook said "yes, but would that actually happen through the administration and all that?" Cook said he's "always thought" that the "senior officers that are signing the actual registration should perhaps have some kind of certification, in addition to the empowered officials," he said. It would be "appropriate for an empowered official to be able to take a test that they can spell ITAR."