U.S. Proposes New Authorization for ITAR Exports to Australia, Canada and the UK

U.S. Proposes New Authorization for ITAR Exports to Australia, Canada and the UK

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The U.S. State Department's Directorate of Defense Trade Controls ("DDTC") has proposed new rules that would authorize exports to Australia, Canada and the UK of items controlled by the International Traffic in Arms Regulations ("ITAR"). The new Australia and UK rules would implement U.S. treaties with those countries that were entered in 2007 and ratified in 2010. For Canada, the new rules would simplify a significant existing ITAR exemption.

The following summarizes the main aspects of the proposed new rules:

  1. Australia and the UK - The new rules for these countries would generally authorize the export of ITAR items and related services and information not listed in a new supplement (examples include certain nuclear components, rocket parts, electronic equipment and chemical agents) provided the recipient and end-use are authorized. DDTC will publish authorized recipients on its website. Authorized end-uses include joint U.S.-Australia defense efforts and other U.S. government uses. DDTC will publish public joint defense efforts on its website and will notify relevant companies in writing of those that are not public. Other authorized U.S. government uses will be indicated in a contract or solicitation.

Authorized recipients and U.S. exporters would generally also be permitted to transfer exported ITAR items to authorized recipients in Australia. Reexport authority would be limited essentially to certain Australian defense programs.

The new rules would also impose limitations on the intermediate consignees that could be involved and a thirty-day waiting requirement before exporting particular sensitive items. Companies would also need to mark their exports as being made pursuant to the exemption, keep records and make certain reports.

  1. Canada - A current ITAR exemption permits the export to Canada of many items and services. The services exemption, however, is somewhat cumbersome and restrictive, particularly with respect to the scope of data involved and certifications and agreements required from the Canadian recipient. The proposed revisions to these rules would expand the permissible scope of data and eliminate most of those certification and agreement requirements.

The ITAR generally restrict the export of items that were specifically designed or modified for a military or space application and related technical information and services. A key issue in determining how useful the new authorizations would be is whether a company's activities would be carved out in the new proposed supplement listing items, data and services not covered by the authorizations. Another key issue for Australia and the UK will be whether DDTC authorizes a company's intended customers and partners in those countries.

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