DDTC Updates Procedures for Using ITAR Exemption
The State Department’s Directorate of Defense Trade Controls (DDTC) has updated an International Trade in Arms Regulations exemption for technical assistance agreements and manufacturing license agreements. The change covers ITAR’s 126.18 exemption, which covers intra-company, intra-organization and intra-governmental transfers to employees who are dual nationals or third-country nationals.
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DDTC previously required those two agreements to be amended prior to 126.18 use, for two reasons: updating the new verbatim clause of 124.8(5), which covers technical data or defense service exported from the U.S., and adding specific language to section 124.7(4), which requires the agreements to identify the areas where manufacturing, production, processing, sale or other forms of transfer will be licensed. Now, the two agreements do not have to be amended to include those modifications, in order to utilize the 126.18 exemption. Agreement holders and foreign parties utilizing the exemption must keep a copy of the notice in their records, DDTC said. Agreement language should still be updated to include the new 124.8(5) verbatim clause. All pending TAAs and MLAs, or amendments, which do not include the updated clause, will receive a proviso to correct the clause prior to execution of the agreement or amendment, DDTC said. The requirement to specifically request use of the 126.18 exemption in 124.7(4) is no longer required.