Mar

30

Pinch Yourself. You’re Not Dreaming

Posted by at 8:30 pm on March 30, 2010
Category: DDTC

State DepartmentIn a laudable moment of regulatory clarity, the Directorate of Defense Trade Controls (“DDTC”) has actually proposed eliminating a provision in the International Traffic in Arms Regulations. The provision in question is the troublesome, annoying and difficult to construe section 126.8 which requires prior approval by DDTC for certain proposals to sell significant military equipment (“SME”) to foreign persons or to enter into a manufacturing license agreement to permit the foreign persons to manufacture SME abroad.

The prior approval and notice requirements under section 126.8 apply to proposed sales of SME valued in excess of $14 million and destined for end use by a foreign military of a country other than a NATO member, Australia, New Zealand or Japan or a proposed manufacturing agreement for SME of any value to be used by any foreign military. The rule only applies to proposals which communicate sufficient information to permit the other party to make a decision. Needless to say, the interpretation of this requirement is a major headache.

Comments are due by May 28, 2010 and may be emailed to [email protected] with a subject line referencing “Public Notice 6931; FR Doc. 2010–6905”. You can take a moment to click the email link and tell DDTC that the proposed amendment is the best idea since wheels on luggage.

Of course, I don’t want to seem ungrateful, particularly since it seems certain that DDTC will ultimately adopt most of the proposed rule in one form or other, but I do have a minor quibble. DDTC has the right to adopt rules and make them effective immediately as final rules, and it often does this, even if it says it will still consider comments to revise the rules. It certainly would have been nice if DDTC had followed that procedure in this case so that we could have an immediate burial rather than a two-month wake.

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Copyright © 2010 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)

2 Comments:

Clif: With respect and affection, while I agree with the conclusion of your post, contrary to the false and fraudulent statement ITAR 128.1, DDTC does NOT have “the right to adopt rules and make them effective immediately as final rules”. With the possible and limited exception of additions and deletions to the USML, DDTC rulemaking is just as much subject to the Administrative Procedures Act as any other regulatory agency. Its activities do not fall within the “foreign affairs function” exclusion in the APA. As the legislative history of the APA compiled by the Senate Judiciary Committee in 1946 clearly states, the foreign affairs function exclusion applies only to diplomatic and other activities involing foreign governments that have no affect on the public. The purpose of the exclusion was to avoid intrusion on functions constitutionally committed to the Executive. DDTC rulemaking clearly affects the public and is a delegation of the power to regulate foreign commerce, a plenary power textually committed to Congress. After US v. Mead, Chevron deference to the Executive branch is limited to those instances where the agency exercising delegated powers follows procedural requirements set forth in the APA or some other statutory scheme. DDTC claim that its power is unfettered by any procedural or due process requirements is one of the greatest usurpations of constitutional power since Lincoln.

Comment by Hillbilly on March 31st, 2010 @ 9:59 am

@hillbilly. I agree with your analysis on the limitations of DDTC’s ability to avoid the APA. I really meant to say that DDTC claims the authority rather than actually has it. In that light, it would have been nice if they had claimed that authority here; certainly it would be much preferable for them to have used that here then in other instances in which they’ve declared rules to be final without public comment.

Comment by Clif Burns on March 31st, 2010 @ 10:04 am