Probably most of the people who read this blog were at the Fall Conference of the Society for International Affairs this Monday and Tuesday. For those few who were not, let me share a few of the more interesting things said by various officials from DDTC who were on panels today.

Brokering.

As usual, DDTC continues to promise that this year we’ll finally see the updated brokering regulations. We’ve been, of course, hearing this promise for years. Literally. So I’m not holding my breath.

But one tantalizing suggestion was made about the future regs — namely, that some differentiation might be made between overseas sales representatives (who assist defense contractors with licensed exports from the U.S. to foreign governments) and traditional arms brokers. No hint was given of how to distinguish the two or what the different treatment might be, but this might address many concerns of defense contractors who have hundreds of overseas sales reps.

Notwithstanding DDTC’s new interpretation of its brokering rules, which requires the registration of all overseas sales representatives, the DDTC reports that currently they have only 600 overseas brokers registered. Needless to say that suggests that either few overseas sales reps are complying or that there must be a huge number in a backlog of registration applications.

Exemptions.

Another DDTC official advised that if exporters aren’t sure that a particular exemption applies that they should simply apply for a license. The official admitted that certain of the exemptions — particularly the Canadian exemption — are daunting and difficult to interpret and apply. The official noted that exporters can always ask for a license when they aren’t certain if an exemption applies. Then in the same breath, he admitted that licensing officers were sometimes returning applications without action and with a notation that the applicant should use an exemption. That leaves one to wonder why DDTC can’t effectively communicate its own licensing policies to its licensing officers.

Additionally, the official noted that a well-loved and often-used exemption is going away. The exemption under section 123.16(b)(1) for export of defense articles in furtherance of approved technical assistance agreements and manufacturing license agreements will go away when agreements can be filed through D-Trade. The target date for filing agreements through D-Trade is May 2007. After that date, the exemption will only apply to exports in furtherance of previously-filed agreements.

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