Highlights
- 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.
Footnotes
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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