On August 15, 2024, the U.S. Department of State’s Directorate of Defense Trade Controls (“DDTC”) published the long-awaited final rule (“Final Rule”), which will be effective September 16, 2024, and expands the definition of “activities other than exports, reexports, retransfers, or temporary imports” under section 120.54 of the International Traffic in Arms Regulations (“ITAR”). See our previous blog here when DDTC issued a Proposed Rule to implement these changes.

The final regulations add paragraphs (a)(6) and (7) to ITAR Section 120.54. The two additional activities that not Controlled events are:

1. Carrying a defense article subject to ITAR re-export or re-transfer requirements on a deployment or training exercise outside a previously authorized country, provided that (i) there is no change in the end use or end user with respect to the defense article; (ii) the defense article is carried by and remains in the possession of previously authorized foreign government forces or United Nations military personnel; and (iii) the defense article is not exported from or temporarily imported into the United States. DDTC noted that it was primarily making clarifying changes to paragraph (a)(6) to ensure that the scope of this exception is clear. In particular, in response to comments received on the proposed rule, DDTC included a new paragraph (a)(6)(iii) to make it clear that this exception remains within its intent, “which is to clarify the policy regarding re-export and re-transfer of defense articles previously authorized for export from the United States and in the possession of the armed forces of a foreign government or United Nations military personnel.” Paragraph (a)(6) explicitly clarifies in the ITAR the agency’s longstanding practice since 2013.
2. The transfer of a foreign defense article previously imported into the United States and since exported from the United States pursuant to a license or other approval under the ITAR, provided that: (i) the foreign defense article has not been modified, improved, upgraded, or otherwise altered or improved in a manner that changes the basic performance of the article prior to its return to the country from which it was imported or a third country; (ii) a defense article of U.S. origin is not included in the foreign defense article; and (iii) the defense article is not exported from or temporarily imported into the United States. New paragraph (a)(7)(iii) has similarly been added for clarification and to emphasize that the transfer of a wholly foreign defense article outside the United States and not otherwise subject to the ITAR not need permission.

Please contact a member of our Outbound Trade Compliance team if you have any questions or would like further information.