Update: More Flexible Policies Announced under the ITAR due to COVID-19

Update: On May 1, 2020, the U.S. Department of State’s Directorate of Defense Trade Controls (“DDTC”) will publish a Federal Register notice that updates DDTC’s April 23 web notice, providing certain types of flexibility in licensing, registration, disclosures and other matters under the International Traffic in Arms Regulations (“ITAR”) in light of the COVID-19 epidemic.  Most notably, the April 23 web notice did not mention any leniency for ITAR agreements, such as Technical Assistance Agreements (“TAAs”) and Manufacturing License Agreements (“MLAs”).  But the Federal Register notice does address TAAs and MLAs, saying it will “extend any license or agreement that expires between March 13, 2020 and May 31, 2020 – for six (6) months from the original date of expiration so long as there is no change to the scope or value of the authorization and no Name/Address changes are required.”    On April 23, 2020, the U.S. Department of State’s Directorate of Defense Trade Controls (“DDTC”) announced on the DDTC home page that, because of the COVID-19 epidemic, it would provide limited relief with respect to certain deadlines and fees for registration, licensing and disclosures under the International Traffic in Arms Regulations (“ITAR”).  DDTC is also providing limited additional flexibility to account for remote work by employees and contractors and communication with DDTC by email. To be clear, many deadlines and other obligations under the ITAR remain in full force.  For example, expiration dates for ITAR agreements (e.g., TAAs and MLAs) have not been changed. DDTC had issued a notice on March 19, 2020 that “industry is advised of the likelihood of longer than normal processing times due to a reduction in the availability of staff in multiple organizations to review applications.”  ITAR registrants and other parties should continue to pay close attention to deadlines and other obligations under the ITAR, and provide plenty of time for DDTC review, to be sure there is no gap in authorization or compliance during this period. The full text of DDTC’s April 23 announcement is as follows:

04/23/20 5:00 EST

DDTC Web Notice on COVID Measures

The President declared a national emergency on March 13, 2020, as a result of the SARS-COV2 pandemic.  As part of the Department of State’s contributions to mitigating the impact of the pandemic on U.S. companies and supply chains overseas, the Directorate of Defense Trade Controls is announcing the following immediate measures. Compliance/Registration

• Effective March 13, 2020, a temporary suspension of the requirement in ITAR Parts 122 and 129 to renew registration as a manufacturer, exporter, and/or broker and pay a fee on an annual basis by extending ITAR registrations expiring on February 29, March 31, April 30, May 31, and June 30, 2020 for two months from the original date of expiration.
• DDTC Compliance is now granting an additional 30 days for responses to its request-for-information letters related to voluntary and directed disclosure matters.  DDTC Compliance is also considering extensions for the submission of full voluntary disclosures on a case-by-case basis.  Extension requests should be sent via email to DTCC-CaseStatus@state.gov on company letterhead in PDF format.
• DDTC is also pursuing a one-time temporary reduction in registration fees for certain categories of DDTC registrants.  More information on any change will be provided on DDTC’s website.

Licensing

• Effective March 13, 2020, a temporary suspension, modification, and exception to the limitations on the duration of ITAR licenses contained in ITAR Parts 120-130, including but not necessarily limited to ITAR §§ 123.5(a), 123.21(a), and 129.6(e), to extend any license that expires between March 13, 2020 and May 31, 2020 for six (6) months from the original date of expiration so long as there is no change to the scope or value of the authorization and no Name/Address changes are required.  This six (6) month extension is warranted in light of the unique challenges applicants face in the current environment when attempting to coordinate with U.S. and foreign business partners regarding the scope of applications.
• To support remote work in this extraordinary period, effective March 13, 2020, a temporary suspension, modification, and exception to the requirement that a regular employee, for purposes of ITAR § 120.39(a)(2), work at the company’s facilities, to allow the individual to work at a remote work location, so long as the individual is not located in Russia or a country listed in ITAR § 126.1.  This suspension, modification, and exception shall terminate on July 31, 2020, unless otherwise extended in writing.
• Effective March 13, 2020, authorization for regular employees of licensed entities who are working remotely in a country not currently authorized by a TAA, MLA, or exemption to send, receive, or access any technical data authorized for export, reexport, or retransfer to their employer via a TAA, MLA, or exemption so long as the regular employee is not located in Russia or a country listed in ITAR § 126.1.  This suspension, modification, and exception shall terminate on July 31, 2020, unless otherwise extended in writing.
• DDTC is implementing new procedures and will send to the contact listed on the application email scans of final action letters for General Correspondence requests submitted in writing.  If email information was not provided, final actions will continue to be mailed back to the applicant.
• DDTC is implementing new procedures and will send to the applicant email scans of unclassified final action letters for DSP-85s submitted in writing.  If email information was not provided, final actions will continue to be mailed back to the applicant.  The Defense Counterintelligence and Security Agency (DCSA) will continue to receive original sealed copies through the mail.
• DDTC is re-issuing guidance for the expedited authorization of requests submitted in support of U.S. Operations (USOP) at DTCL SOP - USOPS Guidance.
• With gratitude for the partnership with Congress and the Department of Defense in this regard, the Department has moved to electronic submissions of Congressional Notifications of proposed Direct Commercial Sales (DCS) and Foreign Military Sales (FMS) to the Congress.
• DDTC is also working with the interagency and leveraging updated staffing protocols to ensure streamlined interagency licensing reviews.

Management

• In addition to our March 19, 2020 website announcement about the acceptance of disclosures and related information pursuant to ITAR § 127.12 via email, DDTC is now also accepting electronic submissions of FMS Part 130 reports via email at DDTC-Part130Notices@state.gov.

• To facilitate timely responses to inquiries from the public and regulated industry, DDTC has added additional points of contact on the Key Personnel tab of the About DDTC page and additional staffing and IT resources to its Response Team and Help Desk functions.