Defense security technology administration overview of licensing
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Defense Security Technology Administration Overview of Licensing. Todd E. Willis Division Chief, Dual-Use Licensing Defense Technology Security Administration U.S. Department of Defense. Agenda. Overview of International Traffic in Arms Regulations (ITAR) Key terms License requirements

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Defense security technology administration overview of licensing

Defense Security Technology Administration Overview of Licensing

Todd E. Willis

Division Chief, Dual-Use Licensing

Defense Technology Security Administration

U.S. Department of Defense


Agenda

Agenda

  • Overview of International Traffic in Arms Regulations (ITAR)

    • Key terms

    • License requirements

  • Defense Technology Security Administration (DTSA)

    • Mission

    • License Directorate

    • Commodity Jurisdiction Overview

  • Exporting Technology

    • Technology license vs. Deemed Export License Review

  • Export Control Reform

    • Four singulars


Defense security technology administration overview of licensing

Overview of

ITAR

3


Licensing authority dtsa role

Licensing Authority/DTSA Role

  • U.S. export laws divide the authority for export licensing

    • Arms Export Control Act: Department of State for defense articles

    • Export Administration Act: Department of Commerce for dual-use items

  • Expeditiously coordinate, develop and adjudicate the DoD position on licenses, regulations and other actions received from the licensing regulatory authority for review.

  • Ensure recommendations fully address DoD technology security policies, support and protect the warfighter, and prevent the diversion and proliferation to programs or entities of national security concern.


Important itar terms

Important ITAR Terms

Designation of Defense Articles and Defense Services (120.2):

  • The Arms Export Control Act provides that the President shall designate the articles and services deemed to be defense articles and defense services for purposed of the ITAR. The items so designated constitute the United States Munitions List (USML) and are specified in part 121 of the ITAR. Such designations are made by the Department of State with the concurrence of the Department of Defense. For a determination on whether a particular item is included on the USML see Commodity Jurisdiction. (120.4)


Important itar terms1

Important ITAR Terms

General Authorities and Eligibility:

  • Section 38 of the Arms Export Control Act (22 U.S.C. 2778) authorizes the President to control the export and import of defense articles and defense services.

    Defense Article (120.6):

  • Any item or technical data designated in 121.1 of the ITAR; this includes technical data recorded or stored in any physical form; models, mock-ups or other items that reveal technical data directly relating to items designated. It does not include basic marketing information on function or purpose or general system descriptions.

    Defense Services (120.9):

  • The furnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles.


Important itar terms2

Important ITAR Terms

Technical Data (120.10):

  • Information, which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions and documentation;

  • Classified information related to defense articles/services;

  • Information covered by an invention secrecy order;

  • Software directly related to defense articles;

  • Definition does not include information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities or information in the public domain. It does not include basic marketing information on function or purpose for general system descriptions of defense articles.


Important itar terms3

Important ITAR Terms

Public Domain (120.11):

  • Information which is published and which is generally accessible or available in the public.

  • Through sales at newsstands and bookstores;

  • Through subscriptions which are available without restriction to any individual who desires to obtain or purchase the published information;

  • Through second class mailing privileges granted by the USG;

  • At libraries open to the public or from the public can obtain documents;

  • Through patents available at any patent office;

  • Through unlimited distribution at a conference, meeting, seminar, trade show or exhibition, generally accessible to the public in the United States;

  • Through public release in any form after approval by the cognizant USG department or agency;

  • Through fundamental research


Itar exemptions

ITAR Exemptions

Shipments by or for USG Agencies (126.4):

  • A license is not required for the temporary import, or temporary export, of any defense article, including technical data or the performance of a defense service, by or for any agency of the USG for official use by such an agency, or for carrying out any foreign assistance, cooperative project or sales program authorized by law and subject to control by the President by other means. (see further details within Part 126.4)

    Canadian Exemptions (126.5): see details in ITAR

9


Is a license required

Is a License Required?

The license question is much more straight forward with a munitions item:

  • Step 1: Is your item a defense article or service listed in the ITAR?

    • If yes, a license is required to export anywhere outside the U.S.

    • In no, are you subject to another export jurisdiction?

    • Don’t know, submit a commodity jurisdiction through the Directorate of Defense Trade Controls (DDTC).


Defense security technology administration overview of licensing

Overview of

DTSA

11


Other regulatory agencies

Other Regulatory Agencies

  • U.S. Department of State - Directorate of Defense Trade Controls

  • U.S. Department of Justice - Drug Enforcement Administration

  • U.S. Department of Interior - Fish & Wildlife Service

  • U.S. Department of Energy

  • U.S. Nuclear Regulatory Commission

  • U.S. Department of Treasury - Office of Foreign Assets Control

  • U.S. Department of Commerce - Office of Patent & Trademarks

  • U.S. Department of Agriculture

  • U.S. Department of Health and Human Services - Food & Drug Administration

    NOTE: DTSA is not a Regulatory Agency, but is the only USG agency that reviews and provides national security input on both dual-use and munitions license applications


Dtsa s mission strategic goals

DTSA’s Mission & Strategic Goals

Mission Statement:

“To promote United States national security interests by protecting critical technology while building partnership capacity”

Strategic Goals:

  • Preserve the U.S. defense edge by preventing the proliferation and diversion of technology that could prove detrimental to U.S. national security

  • Engage U.S. allies and partners to increase interoperability and protect critical technologies

  • Facilitate the health of the U.S. industrial base

  • Align and utilize resources to support DTSA's mission

  • Empower people and make DTSA a great place to work


Defense security technology administration overview of licensing

Defense Technology Security Administration

Director, Defense Technology Security Administration (DTSA)

Mr. James Hursch

Military Assistant, DTSA

Deputy Director, DTSA

Mr. Anthony Aldwell

LicensingDirectorate

TechnologyDirectorate

PolicyDirectorate

International

Security

SpaceDirectorate

Management

Directorate

--Personnel

--Security

--Logistics

--Comptroller

--Info Technology

--Info Assurance

-- Regional Policy

-- Negotiations/Liaison

-- Capabilities/Systems

-- Assessments/CFIUS

-- Secretariat NDPC

-- FG Disclosure Policy

-- Security Surveys

-- General Security Agmt

-- NATO Security Policy

-- FN Pers Assgn Policy

-- Monitor Int’l Sec Prgm

-- Int’l Sec Tng Oversight

-- License Reviews

-- Commodity

Jurisdictions

-- Voluntary & Directed Disclosures

-- Regulations

-- Aeronautical

-- Electronics

-- Information &

Communications

-- Sensors & Lasers

-- Missiles & Space

-- NBC/Land/Naval/

Materials/Machine

Tools

-- Space Monitoring

-- License Monitoring

-- Tech Exchanges

-- Tech Data Reviews


2010 license reviewed

2010 License Reviewed

Munitions

Dual Use

38,907 Licenses Reviewed

19,049 Licenses Reviewed

1 Jan - 31 Dec 2010


Defense security technology administration overview of licensing

DoD Munitions License Review Timeline (Calendar Days)

Reply to DTSA

within 25 days

Case Received

from State/DTC

(Electronic/Paper)

Created at DTSA

No

Referred to

DoD Reviewers

"Prescreen"

OR

Yes

14 Day Extension

(if DTSA approved)

Position to

State/DTC

within 2 days

Potential Escalation

by DoD Reviewers

w/in 2 days

Draft Decision by

DTSA w/in 2 days

LDF→LDM

Escalation

Process

Escalate

Yes

No

Position to

State/DTC

Position to

State/DTC


Dod role in cj ccats process

DTSA reviews Commodity Jurisdictions and

Commodity Classifications when requested by DoS or DoC

DoD Role in CJ / CCATS Process

  • Both the CCL and USML are used as measures for appropriate export control

    • Important considerations:

      • Legacy of Development

      • Capability

      • Performance equivalents

      • Sales history

      • Precedents


Regulatory basis of dod review

Regulatory Basis of DoD Review

International Traffic in Arms Regulations (ITAR), 22 CFR § 120.3

An article may be designated a “defense article” if it:

(a) Is specifically designed, developed, configured, adapted, or modified for a military application; and

(i) Does not have a predominant civil application, and

(ii) Does not have a performance equivalent (defined by form, fit and function) to articles used for civil applications,

OR

(b) Is specifically designed, developed, configured, adapted, or modified for a military application, and has significant military or intelligence capability such that control under the ITAR is necessary.

The intended use of the article or service after its export is not relevant in determining whether an item is a defense article.


Hints for cj submittals

Hints for CJ Submittals

  • Reviewing Audience for CJ submission – some technical, some not so technical:

    • (1) DoD/DoC Engineers

    • (2) Senior Decision Makers [NON-TECHNICAL!]

  • Be forthcoming in providing complete descriptions of the item and its development

    • Be brief and to the point

    • Identify current civil and military uses; any other potential uses

      • Compare and Contrast the civil and military variants/usage

      • Provide details on any “differences” between variants

      • What is required to use for military mission?

    • Sales and Export History, if any

    • Comparable Items and Foreign Availability

    • Avoid Legal Speak and no marketing hyperbole please !

  • Appropriate jurisdictional control is the ultimate goal


Dod 2010 cj positions

DoD 2010 CJ Positions

917 License Decisions 1 Jan - 31 Dec 2010


Defense security technology administration overview of licensing

Exporting Critical

Technology

21


Exporting critical technology

Exporting Critical Technology

The balance in protecting technology:

“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime. “

Chinese Proverb

“If we guard our toothbrushes and diamonds with equal zeal, we will lose fewer toothbrushes and more diamonds,”

McGeorge Bundy

National Security Advisor

for President Kennedy and Johnson

“…allow the nation to focus on controlling critical technologies and items that maintain U.S. military technology advantage.”

Robert M. Gates

Secretary of Defense

April 20, 2010

on export control reform


Exporting critical technology ear

Exporting Critical Technology - EAR

What is a technology export?

  • EAR, Part 772.1

    Technology is “Specific information necessary for the “development”, “production”, or “use” of a product.”

  • Controlled information leaving the U.S. is a technology export.

    What is a deemed export?

  • EAR, Part 734.2(b)(2)(ii)

    “Release in the United States of technology or source code subject to the Export Administration Regulations to a foreign national. Such release is “deemed” to be an export to the home country of the foreign national.”

23


Exporting critical technology itar

Exporting Critical Technology - ITAR

What is a technology export?

Technical Data (120.10):

  • Information, which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions and documentation; (See full definition in ITAR Part 120.10)

    What is a deemed export?

  • Under ITAR, the export to the foreign national considers citizenship and place of birth (if different);

  • Federal Register noticed published in April 2011, requires U.S. entity to verify compliance and no release of ITAR controlled information without prior USG approval.

  • 24


    How to improve your license processing times

    How to improve your license processing times

    • Communication: Early and Often

      • On sensitive technologies going to sensitive countries, make sure you make early contact with LDD licensing officers.

      • Don’t be afraid to call the assigned DoD licensing officers

    • Complete Licensing Packages

      • Ensure license application is completely filled out and has correct information

      • Ensure all supporting documentation is completed and accurate

      • More details outlining specifics of the transaction are always welcomed; this is critical in technology transactions.

    • Complete due diligence on all end-users

      • Review Entity List, Unverified List and applicable USG public list

      • Ensure all end-user certificates are completed and delivered with the application

    • Set realistic expectations with your customer

      • Educate your customer on the U.S. exports licensing process and responsibilities


    Defense security technology administration overview of licensing

    U.S. Munitions List

    (USML) – Part 121

    26


    Usml part 121

    USML – Part 121

    • Category I: Firearms, Close Assault Weapons and Combat Shotguns

    • Category II: Guns and Armament

    • Category III: Ammunition/Ordnance

    • Category IV: Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines

    • Category V: Explosives and Energetic Materials, Propellants, Incendiary Agents and Their Constituents

    • Category VI: Vessels of war and Special Navel Equipment

    • Category VII: Tanks and Military Vehicles

    • Category VIII: Aircraft and Associated Equipment

    • Category IX: Military Training equipment and Training

    • Category X: Protective Personnel Equipment and Shelters

    • Category XI: Military Electronics

    • Category XII: Fire Control, Range Finder, Optical and Guidance and Control Equipment

    27


    Usml part 1211

    USML – Part 121

    • Category XIII: Auxiliary Military Equipment

    • Category XIV: Toxicological Agents, Including Chemical Agents, Biological Agents and Associated Equipment

    • Category XV: Spacecraft Systems and Associated Equipment

    • Category XVI: Nuclear Weapons, Design and Testing Related Items

    • Category XVII: Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated

    • Category XVIII: Directed Energy Weapons

    • Category XIX: reserved

    • Category XX: Submersible Vessels, Oceanographic and Associated Equipment

    • Category XXI: Miscellaneous Articles

    28


    Usml examples

    USML – Examples

    • Unmanned Aerial Vehicles (UAVs):

      Category VIII – Aircraft and Associated Equipment

      (a) Aircraft, including but not limited to helicopters, non-expansive balloons, drones, and lighter-than-air aircraft, which are specifically designed, modified, or equipped for military purposes. This includes but is not limited to the following military purposes: Gunnery, bombing, rocket or missile launching, electronic and other surveillance, reconnaissance, refueling, aerial mapping, military liaison, cargo carrying or dropping, personnel dropping, airborne warning and control, and military training.

    29


    Usml examples1

    USML – Examples

    • Satellites:

      Spacecraft Systems and Associated Equipment

      (a) Spacecraft, including communications satellites, remote sensing satellites, scientific satellites, research satellites, navigation satellites, experimental and multi-mission satellites.

      NOTE TO PARAGRAPH (a): Commercial communications satellites, scientific satellites, research satellites and experimental satellites are designated as SME only when the equipment is intended for use by the armed forces of any foreign country.

    30


    Defense security technology administration overview of licensing

    Export Control

    Reform

    31


    Export control reform

    Export Control Reform

    • Secretary Gates noted:

      • “We need a system that dispenses with the 95 percent of “easy” cases and lets us concentrate our resources on the remaining 5 percent.

      • “By doing so, we will be better able to monitor and enforce controls on technology transfers with real security implications while helping to speed the provision of equipment to allies and partners who fight alongside us in coalition operations.”

    • If addressed properly, national security and efficiency are not mutually exclusive.

    • Reform is driven by national security.


    Structure of the new export control system

    Structure of the New Export Control System

    • On August 31, 2010, the President announced that the Administration is moving forward on a fundamentally new U.S. export control system.

    • The system will be based on the four singles that Secretary Gates mentioned in his April speech:

      • Single export control licensing authority

      • Single control list

      • Single primary enforcement coordination agency

      • Single IT system to process all licenses


    Way ahead

    Way Ahead

    • Single Licensing Agency

      • Creation of the Single Licensing Agency (SLA) will likely require legislation

      • The Task Force has draft legislation which they expect to discuss with new congressional leaders in January 2011

    • Single IT System

      • Memorandum of Agreement (MOA) signed with State in February 2010 – initial operational capability expected by June 2011

      • MOA signed with Commerce in October 2010 – initial operational capability projected for June 2012

    • Enforcement Coordination Center –

      • Work on-going to implement EO


    Licensing directorate

    Licensing Directorate

    Michael Laychak

    Director

    Licensing Directorate

    703-325-4116

    [email protected]

    Kenneth Oukrop

    Munitions Division Chief

    Licensing Directorate

    703-325-3990

    [email protected]

    Todd Willis

    Dual-Use Division Chief

    Licensing Directorate

    703-325-3672

    [email protected]

    DDTC Website: http://www.pmddtc.state.gov/index.html

    DTSA Website: http://www.dtsa.mil/


    Questions

    Questions?


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