US State Department Amends International Traffic in Arms Regulations (ITAR)

The Department of State is amending the International Traffic in Arms Regulations (ITAR) to better organize the purposes and definitions of the regulations. The ITAR govern the manufacture, export, and temporary import of defense articles (including technical data), the furnishing of defense services, and brokering activities involving defense articles. The ITAR is regularly updated and revised to reflect changes in technological developments and as to U.S. national security and foreign policy interests.

It is the mission of the Directorate of Defense Trade Controls (DDTC), at the Department of State, to ensure that commercial exports of defense articles and defense services advance U.S. national security and foreign policy objectives. DDTC’s recent interim rule announcement concerns amending the ITAR to better organize the purposes and definitions of the regulations. This rule consolidates and co-locates authorities, general guidance, and definitions and will be effective as of September 6, 2022.

This initial change of the ITAR had been expected for quite some time and it is not expected to be the last of the major changes. Rather, these most recent proposed changes are likely the first in a series of updated rules to restructure the ITAR.

It is imperative that companies that are – or may in the future – be involved in defense technologies be aware of how they may be affected by the proposed changes to the ITAR. It is widely expected that there will be a robust response to DDTC’s interim final rule through the public comment process. In addition, industry participants are more frequently turning to requests for advisory opinions from both the State Department and from legal counsel in order to resolve obligations and potential liabilities under the law. 

It is expected that additional substantive changes to the ITAR will be coming, including changes to the definitions of “technical data” and “defense services.” Arguably just as important – and while some of these regulatory changes will take time – it is highly likely that there will be significant modifications to the exemptions, the scope of brokering activities, as well as updates as to licensing processes. These substantive modifications will affect companies’ ability to avail themselves of established license exemptions. Accordingly, it will be crucial that organizations review how their policies, practices, and existing licenses might be affected and prepare accordingly.

The Department of State will accept comments on this interim final rule until May 9, 2022.