U.S. Department of State Proposes Changes to the ITAR
- The U.S. Department of State published a proposed rule that contains amendments to the International Traffic in Arms Regulations (ITAR) concerning the definitions of export and reexport and requirements for intra-entity transfers to employees who are dual nationals or third-country nationals, among other changes.
- The deadline to submit comments is April 4, 2022.
The U.S. Department of State published a proposed rule on Feb. 2, 2022, that suggests amendments to the International Traffic in Arms Regulations (ITAR). Though some changes are to correct internal inconsistencies and administrative errors – and won't result in any change in policy – others will influence how foreign persons may interact with ITAR-controlled hardware, software and technical data.
Of note, the State Department proposes changing the definition of export and reexport to reflect the fact that release of technical data to a foreign person only results in a release to the countries in which the foreign person currently holds citizenship or permanent residency.1 This is a change from the rule published in 2016, which dictated that any former countries of citizenship or permanent residency were also included.
Other substantive changes include the following:
- The proposed rule would replace the term "person" with "national" in the Canadian exemption in Section 126.5(b) of the ITAR, consistent with how foreign persons are defined throughout the ITAR.
- The proposed rule makes clear that end-users and consignees must actually screen their employees who are dual nationals or third-country nationals for substantive contacts with ITAR Section 126.1 countries before relying on the exemption for intra-company, intra-organization and intra-governmental transfers.
- Finally, the proposed rule clarifies the ITAR by stating that a screened employee who is a dual national or third-country national, not the end-user or consignee, must execute a nondisclosure agreement to provide assurances that the employee will not transfer any unclassified defense articles to unauthorized persons.2
Reach out to the authors or another member of Holland & Knight's International Trade Group if you would like assistance submitting comments for this proposed rule or evaluating how these changes will affect your business.
1 The definition changes will be reflected in Sections 120.17 and 120.19 of the ITAR.
2 This clarification will be reflected in Section 126.18(c)(2) of the ITAR.
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