Dec
19
DDTC Amends Rules on Transfers of Technical Data
Posted by Clif Burns at 11:50 pm on December 19, 2007
Category: DDTC
The State Department’s Directorate of Defense Trade Controls (“DDTC”) released today a final rule making it easier to transfer technical data under a technical assistance agreement (“TAA”) to third-country nationals, i.e., nationals of countries other than the country specifically authorized under a TAA. Under current procedures, if a U.S. company enters into a TAA permitting the transfer of technical data on a defense article to a company in France, that technical data can’t be transferred to anyone other than a French national unless the approved TAA provides for such transfer and the non-French national signs a nondisclosure agreement.
Under the new rules, technical data can be transferred to a third-country national without specific authorization and a nondisclosure agreement if four conditions are met. First, the third-country national must be a national “exclusively” of a NATO country, a European Union country, Australia, Japan, New Zealand, or Switzerland. Second, the third-country national’s employer must have either signed the TAA or a nondisclosure agreement. Third, the transfer must take place within the United States or the countries listed in the first condition. Finally, the transmittal letter for the TAA must explicitly state that permission is requested to make transfers to third-country nationals under these new provisions.
In its discussion of the new rules, DDTC restates its controversial position that a person may be a third-country national not only because of dual citizenship but also because of country of birth:
In addition to citizenship, DDTC considers country of birth a factor in determining nationality.
How the DDTC applies these factors is not clear from this statement. In theory, a French citizen born of French parents temporarily in Iran might be deemed Iranian. Or an individual born in Iran of Iranian parents that became a French citizen might still be considered an Iranian even if that individual has not retained dual citizenship.
Admittedly application of the rule in the first example is more controversial than in the second example. Still even the second example involves a double standard that rankles our allies. If an Iranian is made a permanent resident in the United States, he or she is treated the same as a U.S. citizen for deemed export purposes, whereas an Iranian naturalized by France is still treated as an Iranian.
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Copyright © 2007 Clif Burns. All Rights Reserved.
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6 Comments:
Not to mention US permanent resident aliens (green card holders) that remain citizens of their native countries (many don’t even care of becoming US citizens and often openly state they will one day return to their native countries) yet DDTC considers them US persons.
[…] ITAR Amendment: Technical Data under TAAs December 20, 2007 at 10:24 am | In Aerospace Law Interfaces | The Directorate of Defense Trade Controls (DDTC) has released a final rule governing the transfer of technical data through Technical Assistance Agreements (TAA) under the International Traffic in Arms Regulations (ITAR) (hat tip ExportLawBlog). The rule effects the transfer of data to nationals of thirds party countries under TAAs. The old rule did not allow for transfer without specific permission from the DDTC. The new rule allows the transfer if the four conditions are met: § 124.16 Special Retransfer Authorizations for Unclassified Technical Data and Defense Services to Member States of NATO and the European Union, Australia, Japan, New Zealand, and Switzerland. […]
The rule is not clear to me on whether it authorizes access by dual/foreign nationals of one of the permitted countries, who are employees of a foreign licensor that is located (and the employees are located) in a country that is not within the priveleged class. It says “The retransfer must take place completely within the physical territories of those countries or the United States.” Any thoughts on what “those countries” means?
Although the language could be clearer, Bill, my thoughts are that “those countries” probably refers to member States of NATO and the European Union, Australia, Japan, New Zealand, and Switzerland and not to a country of a foreign signatory of an approved agreement.
So, if you had a TAA signed by a company in, say, Saudi Arabia the new rule wouldn’t cover disclosures to an employee who was a dual national of Saudi Arabia and Germany, unless the dual national was in Germany and the disclosure was made directly to him from the United States
Anybody else have any thoughts on this question?
Clif,
DDTC’s website seems to support your above interpretation and go one step further – implying that the new rule will only be applied to TAAs/MLAs where all signatories and sublicensees are nationals of NATO countries, EU countries, Australia, New Zealand, Japan, or Switzerland in the first instance. See http://www.pmddtc.state.gov/dual_nationals.htm
Of course, one could always apply for use of the rule for their Saudi TAA and see what happens…
I’d be interested to know what happens to the first person who has successfully invoked the rule for their TAA and now needs to support NATO in Afghanistan. “Okay. Now I need everyone to leave the tent except the Belgians.” However you read the rule, this scenario could be a problem.
Does anyone know what the DDTC means by the statement “We will consider country of birth a factor.” So if I have a person who was born in China but became a German Citizen and Germeny is on my TAA does that mean I also have to put born in China?
