As has been anticipated since March 29, 2010, when the State Department’s Directorate of Defense Trade Controls (“DDTC”) issued a Notice of Proposed Rulemaking eliminating the advance notice and approval requirements of section 126.8 of the International Traffic in Arms Regulations (“ITAR”), the agency has now officially eliminated those requirements and deleted the section from the ITAR. During the rulemaking, DDTC received submissions from three — count ’em, three — commenters, probably because the defense industry as a whole prefers to fly well below DDTC’s radar and avoid doing anything that might possibly annoy the regulators.

The rationale for the change was simple and justified. It was too much trouble for the agency to have to review certain export transactions twice, particularly where the average time to process a license had dropped from sixty or more days to fifteen days. If an exporter is concerned that a license might not be granted, the exporter retains an option to request an advisory opinion under section 126.9 of the ITAR. Prior written approval is still required under section 126.1(e) for any sales proposals to a country subject to an arms embargo under section 126.1.

In response to a comment that elimination of section 126.8 would eliminate a requirement to keep records of sale proposals, DDTC had an interesting comment:

We do not agree, since the § 126.8 requirement to report certain proposals is an obligation separate and independent from recordkeeping requirements. It will continue to be good practice to maintain records of such transactions for an appropriate duration in compliance with § 122.5, particularly to rebut any post hoc allegations that ITAR controlled technical data were transferred without a license or authorization.

I added the emphasis to the quotation to underscore DDTC’s interesting locution here. I’m not sure that all of the documents relating to a proposal — particularly one that is never consummated — fit comfortably within the records covered by § 122.5, namely records concerning the “manufacture, acquisition and disposition” of defense articles. That is no doubt why DDTC talks about this being a “good practice” rather than a requirement of the regulations. Of course, DDTC is right that maintenance of these records, regardless of whether required or not, can help rebut any subsequent allegations that the exporter improperly transferred controlled technical data without a DDTC license.

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