The Department of State has proposed revising the definition of "defense services" under the International Traffic in Arms Regulations (the ITAR) in order to ease licensing requirements and clarify when licenses are required.
Under the proposed changes, services provided to a foreign national that involve the use of public domain data would not constitute "defense services" and, therefore, would not require a license, technical assistance agreement, or manufacturing license agreement. The proposed rule also clarifies that "defense services" include the integration of items controlled by the U.S. Munitions List (USML) or the Commerce Control List (CCL) into USML-controlled defense articles.
Foreign companies that hire U.S. citizens will benefit from another change in the proposed rule. The proposed rule would clarify activities that do not constitute defense services. For example, the proposed rule states that a license is not required when foreign companies hire U.S. citizens when no technical data would be transferred by the U.S. citizen to the employer. Another change in the proposed rule specifies that the training of foreign "units or forces" will be considered a defense service only if the training involves the employment of a defense article, regardless of whether technical data is involved. This definition improves upon the current open-ended definition which covers "military training of foreign units and forces."
For companies and organizations, both U.S. and non-U.S., the proposed revision of the "defense services" definition under the ITAR should reduce the necessary analysis for determining licensing requirements. Comments on the proposed rule are due June 13, 2011.
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