DDTC Ups the Ante on Data Gathering from ITAR-Registered Companies and Introduces Electronic Filing
Pursuant to the International Traffic in Arms Regulations (ITAR), the U.S. Department of State Directorate of Defense Trade Controls (DDTC) has issued a revised Statement of Registration (DS-2032) form and now allows it to be filed electronically. The registration form retains its basic structure, but DDTC requires more detailed ownership information than it did previously.
Registration and the New DS-2032 Form
Under the ITAR, "any person who engages in the United States in the business of either manufacturing or exporting defense articles or furnishing defense services is required to register with [DDTC] [emphasis added]." Registration must be renewed on an annual basis, and registrants should submit their registration renewal package at least 30 days prior to the expiration of their current registration.
As of October 25, 2013, DDTC only accepts the new version of the DS-2032 form (version 4.0), and will reject submissions on older versions. For the next two months, the form may be submitted either electronically (through DDTC's Electronic Form Submission portal) or by mail (express mail is recommended). However, effective January 1, 2014, DDTC will only accept the registration electronically. It is hoped that electronic filing will help DDTC's Registration Unit reduce processing time.
All registration-related materials and instructions, including the new form, can be found on DDTC's website at http://www.pmddtc.state.gov/registration/.
Compliance Process Implications
Important modifications to the form include a requirement for more detailed information regarding intermediate parent entities and the precise extent of foreign ownership and control of the registrant. DDTC increasingly has requested this information in connection with required notifications for mergers, acquisitions and divestures. The new DS-2032 form expands information requirements to include all registrants.
The form is no longer a simple means of registering for fee gathering and logging in company names. Because DDTC has stepped up its data collection and scrutiny of ITAR registrants, going forward, defense industry companies will need to spend more time ensuring that the registration is completed accurately. Compliance teams will have to coordinate more closely with corporate governance teams to ensure that information regarding company ownership is accurate and up to date.