DDTC Advises Review of Authorizations against Latest Changes

On November 21, BIS and DDTC published in the Federal Register final rules clarifying and revising the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR) for U.S. Munitions List (USML) Category VIII (Military Aircraft) and Category XIX (Gas Turbine Engines). Both rules become effective on December 31, 2016.

In an Industry Notice also published on November 21, DDTC advised that the final rule affects, among other things, a narrow range of articles that have been moved from the Commerce Control List (CCL) to the U.S. Munitions List (USML). The impacted articles relate primarily to next-generation platforms and will be controlled principally in USML paragraphs VIII(h)(29) and XIX(f)(12).

Paragraph VIII(h)(29) covers “[a]ny of the following equipment if specially designed for a defense article described in paragraph (h)(1): (i) Scale test models; (ii) Full scale iron bird ground rigs used to test major aircraft systems; or (iii) Jigs, locating fixtures, templates, gauges, molds, dies, or caul plates.” VIII(h)(1) controls parts, components, accessories, associated equipment and systems for certain, specified military aircraft.

Paragraph XIX(f)(2) is for “[a]ny of the following equipment if specially designed for a defense article described in paragraph (f)(1): Jigs, locating fixtures, templates, gauges, molds, dies, caul plates, or bellmouths.” XIX(f)(1) controls parts, components, accessories, associated equipment and systems for certain, specified U.S.-origin engines and military variants.

In the Notice, DDTC offers the following guidance regarding licenses or authorizations pertaining to these articles:

  • Effective December 31, for articles previously subject to the EAR, but now subject to the ITAR under the new rule, any unshipped balance under a Department of Commerce authorization will be null and void, as the re-export or retransfer of the articles will be controlled by the ITAR.

DDTC believes the scope of impacted authorizations to be limited and states it will assist exporters in obtaining appropriate authorizations under the ITAR. Impacted exporters are encouraged to contact the Office of Defense Trade Controls Licensing through the DDTC Response Team at (202) 663-1282 or DDTCResponseTeam@state.gov, as soon as possible to discuss specific transition impacts.