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New ITAR Brokering Rule!

Monday, August 26th, 2013

Today DDTC published an interim final rule amending the brokering regulations under ITAR Part 129. This rule is effective October 25, 2013 and interested parties may submit comments by October 10, 2013.  Key changes include:

Clarification of registration requirements

  • Only foreign persons outside the U.S. that are owned / controlled by a U.S. person are required to register
  • Foreign subsidiaries can be included on a parents registration
  • Brokering does not include the provision of advice to clients by an attorney

Updating the scope of brokering activities

  • Excludes activities of foreign subsidiaries to a U.S. parent when promoting defense products and services of the parent

New prior approval requirements and exemptions for brokering activities

Revised reporting and recordkeeping for such activities

  • All persons involved must be identified by name, address, nationality, country location and function
  • Include quantity, description and U.S. dollar value of defense articles and services
  • Indicate the source and value of fees and commissions received or expected

Full details of the rule can be found at: http://www.pmddtc.state.gov/FR/2013/78FR52680.pdf

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Revision of USML Categories VI, VII, XIII, and XX

Wednesday, August 7th, 2013

On July 8, 2013 the Department of Commerce and Department of State published their respective final rules for initial implementation of the following Categories. These various ITAR and EAR amendments are effective January 6, 2014.

From the FR: As part of the President’s Export Control Reform (ECR) effort, the Department of State is amending the International Traffic in Arms Regulations (ITAR) to revise four more U.S Munitions List (USML) categories and provide new definitions and other changes. The revisions contained in this rule are part of the Department of State’s retrospective plan under E.O. 13563.

To view the full Revisions to the ITAR click here . Similarly, revisions to the EAR can be found here.

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Colorado Space Industry Open Comment Forum

Friday, June 21st, 2013

Avant Managing Partner and DEC member John Anderson will be speaking about export control reform and its impact on the Colorado space industry at the open comment forum mentioned below. If you or your organization are impacted by the revised export controls on space items and satellites, please join us for this valuable forum.

COLORADO SPACE INDUSTRY OPEN COMMENT FORUM

By the Rocky Mountain District Export Council

The Rocky Mountain District Export Council (DEC) invites Colorado-based companies, trade associations, congressional working groups, economic development and policy leaders to discuss and give on-the-record comment to the ITAR Proposed Rule and EAR Proposed Rule released in the Federal Register on May 24, 2013.

When:  Monday June 24, 2013   8:00 a.m. – 1:00 p.m.

Where:  South Metro Chamber of Commerce

Forum Objectives:

  • To facilitate understanding and communication between Colorado’s critical space industry and government through this prescribed rulemaking process.
  • To comment on language clarity, definitions and possible unintended consequence.
  • To promote Colorado’s space industry and job creation potential directly to DOS/DOC rule authors who, by their charge, resist export control relaxation.

Forum Program

Phase 1.  DEC-moderated, open and off-record clarification and interpretation discussion

Phase 2.  Voluntary comments taken and recorded by court reporter in hard and electronic format.  Submitted by July 8, 2013.  Detailed agenda attached.

Forum Cost

$20 at the door. Coffee service, light lunch.  Sponsorships being solicited.

Forum Host

The DEC is a 501c3 volunteer professional advisory group of the Department of Commerce International Trade Administration to educate, promote and support the President’s National Export Initiative.

Invitation

Room capacity 60.  Invitation priority for those wishing to speak.  Observers or off-record participants welcome too, as meeting space permits.

DEC Forum Contact:  Kip Cheroutes 303.382.4054 lxc2@aol.com

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Revision of USML Category XV – Proposed Rule

Friday, May 24th, 2013

The long-awaited proposed rule regarding the revision of U.S. Munitions List Category XV (spacecraft) and definition of “Defense Service” is in today’s Federal Register notice!

The notice can be found here and states that the comment period ends on July 8th. Please submit your comments to DDTC before the deadline, especially if you have any specific examples of satellites and related items that would be controlled by the revised USML Category XV that are now in normal commercial use.

SUMMARY:

As part of the President’s Export Control Reform effort, the Department of State proposes to amend the International Traffic in Arms Regulations (ITAR) to revise Category XV (Spacecraft Systems and Related Articles) of the U.S. Munitions List (USML) to describe more precisely the articles warranting control on the USML. The definition of “defense service” is to be revised to, among other changes, specifically include the furnishing of assistance for certain spacecraft related activities. The revisions contained in this rule are part of the Department of State’s retrospective plan under E.O. 13563 completed on August 17, 2011.

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Initial Implementation of Export Control Reform!

Wednesday, April 17th, 2013

Despite all the naysayers and skepticism when the effort first began back in 2009, the initial implementation of export control reform is upon us!

Yesterday the Department of Commerce and Department of State published their respective final rules for initial implementation of export control reform. Both rules come with a delayed effective date and come into force October 15, 2013. Put it on your calendars folks!

Here’s a summary of what has changed in the ITAR under this rule:

  • Revision of USML Categories VIII (Aircraft and Related Articles), XVII (Classified Articles, Technical Data, and Defense Services Not Otherwise Enumerated), and XXI (Articles, Technical Data, and Defense Services Not Otherwise Enumerated);
  • Addition of USML Category XIX (Gas Turbines Engines and Associated Equipment);
  • Establishment of definitions for the terms “specially designed” and “subject to the EAR”;
  • Creation of a new licensing procedure for the export of items subject to the EAR that are to be exported with defense articles; and
  • Related amendments to other ITAR sections.

The EAR has numerous changes as well, including:

  • Addition of the “600 Series” to the CCL
  • Transition Period and Dual Licensing
  • De Minimis and Foreign-Produced Direct Product
  • Amendments to various parts of the EAR including adding the definition of “Specially Designed”

Revisions to the EAR can be found in the Federal Register notice here. Similarly, revisions to the ITAR can be found here.

From the FR summary:

As part of the Export Control Reform (ECR) Initiative, the Bureau of Industry and Security (BIS), and the Directorate of Defense Trade Controls (DDTC), Department of State, have published multiple proposed amendments to the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR), respectively, to strengthen national security by fundamentally reforming the export control system. This final rule implements the initial ECR changes by adding a structure and related provisions to control munitions items that the President has determined no longer warrant export control on the U.S. Munitions List (USML) on the Commerce Control List (CCL), specifically aircraft, gas turbine engines, and related items. This rule is being published in conjunction with a Department of State rule that revises the USML so that upon the effective date of both rules, the USML and CCL and corresponding regulatory structures will be complementary. The revisions in this final rule are also part of Commerce’s retrospective regulatory review plan under EO 13563, which Commerce completed in August 2011.

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