DDTC Seen Likely to Proceed With ITAR Telework Rule

The State Department is expected to follow through with a rule that would permanently revise the International Traffic in Arms Regulations to allow employees involved in ITAR-related activity to work remotely. The rule, crafted under the Trump administration, was sent for interagency review in December but was withdrawn in January as part of the Biden administration's regulatory freeze on the previous administration’s pending regulations (see 2101210013).

“I believe everyone expects it will still eventually be published,” said trade lawyer Christopher Stagg, speaking during a Feb. 26 event hosted by the American Bar Association. The rule, which had been implemented as a temporary measure last year, had proven popular with industry (see 2004240017 and 2007280014). A spokesperson for the Directorate of Defense Trade Controls, which proposed the rule, declined to comment.

The ABA event provided an overview of a range of export control developments during the last year, including the Bureau of Industry and Security's effort to control emerging and foundational technologies. Tim O’Toole, a sanctions and export control lawyer with Miller & Chevalier Chartered, said BIS under Biden will likely continue its effort to control emerging technologies multilaterally, building off controls it issued last year to align with decisions made at the Wassenaar Arrangement (see 2012240002). O’Toole also said industry gained a clearer picture in 2020 of how BIS intends to define emerging technologies after the agency issued several controls, including on geospatial imagery software (see 2101050018) and software used to develop biological weapons (see 2011050043). “It made some definitional decisions,” O’Toole said. “Going forward into 2021, I think we'll see more of that.”

But BIS has not yet issued a control over a foundational technology despite issuing a pre-rule in August (see 2008260045). Companies and industry groups urged BIS to be cautious as it considers the controls, which they said could stifle innovation, damage U.S. competitiveness and lead to costly shifts in global supply chains (see 2011130037). O’Toole said companies should be aware that BIS will not only look to control technologies as part of the effort, but also commodities. As the agency tries “to identify these sorts of foundational technologies, there was some hope within industry that it was going to be relatively limited,” he said. “It's not.”

BIS’s April rule on military intelligence end-uses and end-users (see 2007090075) also caused concern within industry, which struggled to determine how to conduct due diligence on their exports. Although some businesses began obtaining end-user and end-use statements from customers in China, certifying that the end-user has no military connection, that “may not be enough,” said Eunkyung Kim Shin, a Baker McKenzie trade lawyer. She said companies should thoroughly research their customers through corporate background checks, review business registration information and review their customer end-use and end-user certifications if they haven’t been updated since BIS issued the rule in June.

But even with extensive research and due diligence, customer affiliations aren’t always obvious. “Getting clear ownership or control information out of China, especially when the state is involved,” she said, “is not always straightforward.”