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ITAR Exemption

Subject: ITAR Exemption: What Does it Mean and What is the Process

Purpose: International Trafficking in Arms Regulations (ITAR) Exemptions permit certain defense-related exports or transactions without full compliance with ITAR restrictions, typically for research purposes or foreign government use under specific agreements, enabling international collaboration while upholding national security controls. Any time material is being presented by United States (US) contractors in the presence of foreign nationals, it is considered an export and is therefore subject to ITAR requirements, this includes static displays and exhibits. Title 22 Code of Federal Regulations (CFR) Part 126 provides the general policies and provisions for exports, imports and sales to or from certain countries. Per Title 22 CFR 126.4(b)(2), a license is not required for the export, reexport, retransfer, or temporary import of a defense article or the performance of a defense service, to an entity other than the US Government at the written direction of a department or agency of the US Government. The Directorate of Defense Trade Controls (DDTC) oversees and enforces ITAR exemptions, including the AUKUS exemption.

How Does This Apply to AUKUS: Title 22 CFR 126.7 “Exemption for Defense Trade and Cooperation among Australia, the United Kingdom (UK), and the United States (US)” went into effect on 1 September 2024. This provision indicates that no licenses or approval is needed for exporting, reexporting, retransferring, or temporarily importing defense items, providing defense services, or engaging in brokering activities, as long as it’s done between authorized users of the exemption. Exemption 126.7(b)(1) requires that all activity must be to or within the physical territory of Australia, the UK, or the US. Per Exemption 126.7(b)(2), the transferor and recipients(s) must be

  • US persons registered with the DDTC
  • A US government department or agency
  • or UK or Australian Authorized Users identified in the Defense Export Control and Compliance System (DECCS)

The vast majority of defense articles and defense services described in the United States Munitions List (USML) are eligible for transfer via the 126.7 Exemption. Those defense articles and defense services that are ineligible for transfer via the 126.7 Exemption are identified in the Excluded Technology List (ELT), located in Supplement 2 Part 126 of Title 22 CFR. US Contractors are still required to obtain an ITAR License for Export for all submarine related technology included in the Supplement 2 ELT.

This exemption further facilitates defense trade and cooperation between Australia, the UK, and the US. It supports the US defense industry by removing licensing requirements for certain transfers and allows the transfer of classified defense articles to certain authorized users in the UK and Australia.

The Process: In order to satisfy ITAR requirements, either each contractor must pursue an export license, or the sponsor of a conference can request an ITAR exemption from Navy International Programs Office (NIPO). The process for obtaining an ITAR exemption involves four main steps: Draft of ITAR Exemption Request sent to NIPO for review; Final ITAR exemption request signed and sent to NIPO for approval; Exemption approved and direction to self-certify issued by NIPO to each company presenting; Companies execute their internal self-certify process.

DDTC Codes: Under the 126.7 Exemption, US Contractors are required to register with the DDTC and obtain a DDTC Registration Code. To procure a DDTC code, the US Contractor must be involved in the manufacturing, exporting, temporary importing, or brokering of defense articles or services within the US. Contractors must first enroll with DECCS and complete an online registration application in order to obtain a DDTC code. Once enrolled, the Contractor should follow the instructions outlined in the New Registration User Guide to complete and submit their new registration to DDTC. The required information for the application includes:

  • Legal business name and address
  • Ownership structure
  • Primary business activities related to defense articles or services
  • Relevant certification or licenses
  • Contact information
  • The Contractor will be required to provide documentation such as articles of incorporation or partnership agreements. DDTC will review the application and issue a code to the contractor based on the information provided in the registration application.

NOTE: The ITAR exemption is only required for contractors who will be presenting/exhibiting to foreign nationals.  Government organizations presenting/exhibiting do not have to be included in the ITAR exemption request; they are, however, required to go through the foreign disclosure officer review and approval process.

 

 

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