1. The US Department of State(DoS) has issued a final rule amending the International Traffic in Arms Regulations (“ITAR”) to include a new license exemption for transfers of defence articles 1 to Dual National or Third Country National (DTCN) employees 2 of foreign end-users. The new rule came into force on 15 August 2011 and eliminates the need to obtain prior approval from DoS for the transfers of unclassified defence articles;(including unclassified technical data) to DTCN employees of foreign business entities, foreign government entities, or international organisations that are approved end-users or consignees (including approved sub-licensees) for such defence articles.
2. Those UK end users/consignees who handle US ITAR controlled material should be aware that the exemption is subject to satisfying certain screening and recordkeeping requirements. In particular, in lieu of prior approval, the new ITAR Section 126.18 requires eligible companies and organisations to implement “effective procedures to prevent diversion to destinations, entities, or for purposes other than those authorised by the applicable export license or other authorisation.”
3. To this end, the US Government and Her Majesty’s Government (HMG) have agreed an approach confirmed in a diplomatic Exchange of Notes 3. This means that HMG’s pre-existing Baseline Personnel Security Standard (BPSS) constitutes a screening process meeting the screening requirements of ITAR 126.18(c)(2). Those UK end users/consignees who decide not to adopt the BPSS will have to introduce their own screening arrangements in order to comply with the rule change. Further information can be found in the guidance documents, which can be referred to in the links at Para 4.
See External links and further information about the rule change.
4. Following a number of meetings between the Export Group for Aerospace and Defence (EGAD) and HMG officials 4 a series of guidance documents have been agreed to help UK End Users/Consignees comply with the rule change. The guidance documents can be found at ‘Related Links’ and include:
- A copy of the Exchange of Notes agreed between the US and UK Governments;
- A model Technology Security Plan (including a Non Disclosure Agreement);
- A Question and Answer matrix.
5. UK end users/consignees should also note that the Ministry of Defence intends to communicate the guidance through the Defence Contracts Bulletin and Acquisition Operating Framework in due course.
6. The US Dept of State has been consulted on all of the UK’s guidance documents and has endorsed the approach taken. The US Dept of State also intends to issue its own guidance to US exporters making them aware of the specific bilateral arrangements/protocols, which have been agreed between the US Government and HMG.
7. Any queries in relation to the guidance documents should be addressed to:
Assistant Head 2
International Relations Group
Defence Equipment & Support
MoD Abbey Wood
Bristol
BS34 8JH
Tel: 0117 913 0271
Email: DESIRG-2-AsstHd@mod.uk
This Notice is for information purposes only and has no force in law. Please note that where legal advice is required UK end users and consignees should make their own arrangements.
October 2011