By George W. Thompson
Have you ever seen one of those movies where the heroine is in imminent danger and gets rescued out of the blue by an unexpected event?
Well, we just saw the ITAR equivalent of a movie rescue. In an Industry Notice published on its website, the Directorate of Defense Trade Controls (DDTC) saved the day for exporters facing the imminent expiration of pre-Export Control Reform license authorization.
DDTC Saves the Day
As discussed in my “Exporters Beware” comment, October 14 was the expiration date for DDTC licenses covering ITAR items that had transitioned to the Export Administration Regulations. For reasons unexplained, DDTC has extended the period during which these pre-reform licenses remain valid.
ITAR Licenses to Remain Valid for 48 Months
First, instead of expiring two years after the effective date of an item’s transition to the EAR, ITAR licenses will remain valid for 48 months (their typical length) or whatever other period they specify.
Extra Year Provided
Second, agreements subject to the two-year expiration date get an extra year tacked on.
While DDTC didn’t tell us why it took this step, my guess is that too many exporters had failed to adapt to the post-reform rules. DDTC took action to avoid an unmanageable number of authorization lapses and resultant violations and license and agreement applications. Any exporters in that situation should use this respite to prepare for the new expiration date.
The text of DDTC’s notice is set forth below.
Industry Notice – ECR Transition Timeline Extended: On October 3, 2013, DDTC published a final rule implementing initial revisions to the International Traffic in Arms Regulations pursuant to the President’s Export Control Reform initiative (see 78 Fed.Reg. 61,750). The preamble to this rule set forth a “Transition Plan” advising that certain licenses, authorizations, and agreements would remain valid for a period of two years from the effective date of the rule (October 15, 2013). DDTC is modifying this guidance. The relevant excerpts from the Transition Plan, and updated guidance pertaining to those excerpts, are as follows:
- “A license or authorization issued by the Department will be effective for up to two years from the effective date of the revised USML category if all the items on the license or authorization have transferred to the export jurisdiction of the Department of ” (78 Fed. Reg. 61,752)
Updated guidance: Licenses or authorizations that would otherwise expire at the conclusion of the referenced two-year period will remain valid for 48 months from the date of issuance, or as otherwise indicated on the license or authorization.
- “Approvals issued for agreements submitted prior to the effective date of the relevant revised USML category that contain transitioning and nontransitioning items will remain valid until expired, unless they require an amendment, or for a period of two years from the effective date of the relevant final rule, whichever occurs first, unless otherwise revoked, suspended, or ” (78 Fed. Reg. 61,752)
Updated guidance: For agreements that would otherwise expire at the conclusion of the referenced two-year period, DDTC is extending the period of validity by one year.
- “Approvals issued for agreements submitted prior to the effective date of the relevant revised USML category that contain solely transitioning items will remain valid for a period of two years from the effective date of the relevant USML category, unless revoked, suspended, or “ (78 Fed. Reg. 61,752)
Updated guidance: For agreements that would otherwise expire at the conclusion of the referenced two-year period, DDTC is extending the period of validity by one year.