DDTC Debars FFs BAX, Kuhne Nagel, Panalpina, Schenker from Gov't Contracts, Debar Ends for Ceva
The Directorate of Defense Trade Controls states that by notice from the Department of the Air Force on February 24, 2012, the debarment of Ceva Logistics LLC a/k/a EGL, Inc. from contracting with an agency of the government is terminated. However, effective immediately, DDTC is debarring other freight forwarders from government contracting by action of February 16, 2012: (1) BAX Global Inc.: Irvine, CA; (2) Kuhne and Nagel International AG, Schindellegi, Switzerland; (3) Panalpina Welttransport (Holding) AG: Basel, Switzerland; (4) Panalpina Inc.: Morristown, NJ; and (5) Schenker AG: Nordrhein-Westfalen, Deutschland. These five entities are ineligible to contract with an agency of the U.S. Government and are therefore generally ineligible in accordance with Section 120.1 of the International Traffic in Arms Regulations (ITAR).
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Written Authorization Required for Certain Defense Transactions Connected with the Debarred Forwarders
In accordance with Section 127.1(c) of the ITAR, written authorization from DDTC is required (except as noted below) before a "person with knowledge" that another person is then ineligible pursuant to Section 120.1(c) of the ITAR directly or indirectly applies for, obtains or uses an export control document for such ineligible person; or orders, buys, receives, uses, sells, delivers, stores, disposes of, forwards, transports, finances, otherwise services or participates in any transaction which may involve any defense article or the furnishing of any defense service for which a license or approval is required by the ITAR for export where such ineligible person may obtain any benefit therefrom or have any direct or indirect interest therein.
Instructions for Existing, Pending and Future Authorizations Involved the Debarred Five
DDTC has determined to manage existing, pending, future authorizations, and exception requests involving these five entities as follows:
Existing Authorizations. Existing authorizations (i.e., authorizations approved by DDTC prior to the original web notice of February 24, 2012) are not affected. Authorizations that include any individual entity, or combination of entities, listed above as intermediate consignee, consignor, or freight forwarder may continue to be utilized by the applicant without need to amend or obtain other written authorization from DDTC.
Pending Authorization Requests. Authorization requests received by DDTC prior to February 18, 2012 (the U.S. Air Force action was created February 16, 2012), will be reviewed by DDTC in the normal course, without the submission of a request for approval in accordance with Section 127.1(c) of the ITAR to include an ineligible party in the transaction (commonly referred to as a “transaction exception request”). Authorization holders may utilize the named entity(ies) in their approved roles.
Authorization requests received by DDTC February 18, 2012, and after, and which are pending with the Department as of February 24, 2012, involving any one or more of the parties above, but that do not include a transaction exception request will be Returned Without Action, unless a transaction exception request is submitted via DTrade2 no later than February 27, 2012. Those that do include such a request will be reviewed.
Future Authorization Requests. Authorization requests received by DDTC after February 24, 2012 involving any one or more of the parties above, must include a transaction exception request or they will be Returned Without Action. Those that do include such a request will be reviewed. In the event the Air Force debarment is terminated and one or more of the entities listed above is no longer ineligible to contract with an agency of the U.S. government, a transaction exception request will no longer be required (so long as they are not ineligible for other reasons).
Transaction Exception Requests. Transaction exception requests should include, at a minimum, an explanation of why the request should be considered, why the generally ineligible entity should be part of the transaction (i.e., why the applicant is unable to utilize a different freight forwarder), and how the inclusion of the ineligible entity is in the interests of U.S. foreign policy or national security.
(DDTC states that this guidance is being issued due to the extraordinary number of current and pending authorizations involving one or more of the aforementioned entities. The responsibility remains with the applicant to vet all potential parties to a license prior to submission to DDTC. Note the companies listed in this web notice have been updated from a previously posted notice.
The agency also states that this information is revised from the guidance provided by its web notice of February 24 to include only those entities currently subject to Air Force action. DDTC encourages applicants to monitor the Excluded Parties List System for any changes to the status of the remaining entities.)