Revision to Third Country Nationals Participation in Military Technical Exchanges
The Directorate of Defense Trade Controls of the U.S. State Department has approved an amendment to Section 124.16 of the International Traffic in Arms Regulations. Section 124.16 establishes the policy for granting exemptions for transfer of unclassified defense articles and services to dual national and third country nationals of licensed and approved end-users. Under this rule, transfer exemptions are permitted only to employees who are dual national and third country nationals of NATO or EU member states, Australia, Japan, New Zealand or Switzerland. There has been widespread dissatisfaction with the current rule, which conflicts with foreign human rights and antidiscrimination laws. It has also been felt that the Section 124.16 places too great an administrative burden on U.S. manufacturers and exporters, by requiring separate accounting and licensing of foreign individuals.
ITAR Section 126.18 does not replace Section 124.16, but provides another level of flexibility to permit transfer exemptions which would otherwise be prohibited because of foreign laws. It places the burden on the end-user to screen dual-national and third-country national employees and to follow effective procedures designed to prevent unlawful transfer of defense articles. Transfer exemptions are permitted only if they take place within the end-user’s country or where an organization conducts its official business. The transfer must be within the scope of the export license or authorization. A security clearance from the host country may be required. The end-user is required to establish a process to screen employees for “substantive contact” with ITAR restricted or prohibited countries as listed in ITAR 126.1. The definition of that substantive contact is spelled out explicitly. Nonetheless, by providing a detailed delineation of such contacts, the DDTC is attempting to provide a more flexible and holistic approach to employee screening.
This revision process has resulted in changes to the definitions of Regular Employee as outlined in ITAR 120.39, providing additional clarity to both Section 124.16 and Section 126.18.
