New US guidance on defence services abroad
On 6 January the US Directorate of Defense Trade Controls (‘DDTC’) published new guidance, in the form of 14 FAQs, on provision of defence services abroad by US persons.
The FAQs outline registration and authorisation requirements under multiple scenarios, as well as the process for obtaining authorisation.
As defined by the International Traffic in Arms Regulations (‘ITAR’), a US person is classified as providing a defence service if they ‘provide assistance to a foreign entity in a foreign country and that assistance relates to the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of a defense article; furnish technical data; or provide military training to foreign units and forces’.
To do any of this, the individual providing defence services would need authorisation whether the service was provided inside or outside the US. According to the FAQs, the necessary authorisation may be obtained under the ITAR for a period of four years.
Of the more interesting FAQs, the question arose whether a US person working on a foreign-origin defence article would render that defence article subject to the ITAR by virtue of their involvement. The DDTC says no, with a caveat:
‘The mere presence or involvement of a U.S. person during the design, development, etc. of a foreign-origin defense article, or the provision of defense services that are authorized via a mechanism other than a TAA [Technical Assistance Agreement] or MLA [Manufacturing Licence Agreement], does not subject the resultant foreign-origin defense article to the ITAR or its reexport/retransfer requirements.
‘However, consistent with ITAR § 124.8(a)(5), defense articles “produced or manufactured from” technical data or defense services provided … cannot be transferred to a foreign person, except pursuant to ITAR § 126.18, as specifically authorized, or with the prior written approval of the Department of State.’
