From Denial to Due Diligence: Loosening of ITAR Restrictions on Ethiopia

The U.S. Department of State's Directorate of Defense Trade Controls (DDTC) announced on May 11, 2026, that it had terminated the arms embargo on Ethiopia and ended the policy of denial under the International Traffic in Arms Regulations (ITAR) Section 126.1. ITAR license applications involving Ethiopia will now be reviewed on a case-by-case basis, and ITAR exemptions will once again be available for exports to Ethiopia.

DDTC indicated it will issue a rule to formally remove Ethiopia from the Proscribed Country List found in Section 126.1. It has not yet provided a public explanation for the change or conditions that warrant it.

Companies wishing to export ITAR-controlled items to Ethiopia must still maintain strong due diligence and screening procedures and carefully prepare license applications to maximize the chances of succeeding in the case-by-case licensing reviews, which will still be scrutinized for national security risks and U.S. foreign policy interests.

DDTC originally added Ethiopia to the arms embargo list in 2021 because of the conflict in northern Ethiopia, serious human rights abuses and concerns that the crisis threatened Ethiopia's sovereignty and territorial integrity. President Joe Biden also imposed targeted economic sanctions on Ethiopia in 2021 under Executive Order 14046, and these sanctions remain in place today. Four entities and two individuals have been sanctioned under this program to date.

Ending the arms embargo replaces the presumption of denial for exports of defense articles to Ethiopia with a case-by-case review weighing the national security, foreign policy, regional stability and human rights considerations presented by the specific request. Removal of the arms embargo also means that exporters may take advantage of license exemptions that are unavailable for transfers to ITAR Section 126.1 countries, subject to satisfying the criteria for those exemptions.

DDTC announced the change on its website but did not provide any reason for the change in status. DDTC will likely provide its rationale regarding Ethiopia in the forthcoming rule formalizing the removal. In recent similar actions, such as the removal of Cambodia from the arms embargo list in November 2025, DDTC indicated that the removal was based on "diligent pursuit of peace and security, including through renewed engagement with the United States on defense cooperation and combating transnational crime." According to a press release issued on May 11, 2026, by the U.S. Embassy in Ethiopia, Secretary of State Marco Rubio met with Ethiopian Foreign Minister Gedion Timothewos. Secretary Rubio and Timothewos discussed the U.S.-Ethiopia security partnership and the significant steps taken to advance commercial opportunities between the two nations, and Secretary Rubio underscored Ethiopia's important role in promoting the resolution and deescalation of conflict across East Africa.

Holland & Knight will continue to monitor DDTC's publication of the Federal Register amendment removing Ethiopia from Section 126.1 and any related State Department guidance. For questions about how this policy change affects a specific program or transaction, please contact our Export Controls and Sanctions Team.