State Dept. Proposes Permanent Revision to ITAR Telework Rule

The State Department released a proposal May 26 to permanently allow employees involved in International Traffic in Arms Regulations-related activity to work remotely, a long-awaited measure that industry is expected to welcome. The rule proposes to permanently update the ITAR’s definition of a “regular employee,” which will also now include certain “contractual staff.”

The measure was first imposed on a temporary basis in April 2020 to help employees more easily work remotely during the COVID-19 pandemic (see 2004240017). It was renewed in December after proving popular with industry (see 2012100009). The Directorate of Defense Trade Controls has said this year that it was working to make the measure permanent (see 2105200061). Comments on the proposed rule are due July 26.

The rule will remove from ITAR’s definition of a regular employee a criterion that states that an employee “must work at a company’s facilities.” The State Department said it received several requests to continue extending the measure, which has allowed companies to “continue their business activities despite” the pandemic. “The Department recognizes that the workplace environment is evolving,” the agency said.

The proposed rule will also allow companies to “treat certain contractual staff as regular employees” for ITAR purposes. The State Department said contract employees can meet this definition “provided those individuals are sufficiently subject to the employer’s control such that the Department can hold the regulated employer responsible for the individual’s actions.”

The rule will also clarify the definition of a “long term contractual relationship” to specify that “individuals must be providing services to an entity under a contract for a term of one year or more.” This will help “minimize the risk of diversion of U.S. defense articles,” the agency said, because employees on longer contracts are more likely to “receive superior orientation” and the “ability to absorb and apply training materials and adhere to compliance policies and procedures.”

The agency will still allow employees on a contract less than one year to be treated as a “regular employee” if they abide by certain ITAR controls, disclosure requirements and have an active security clearance approved by the U.S. or by the “government of the entity to which the individual’s services are provided.” Employees providing services under a contract can include “independent contractors, seconded employees, individuals provided by a staffing agency, or contractors provided by a contracting agency,” the State Department said.