DDTC released today on its website a “clarification” of the off-shore procurement rules that had been requested during the April 21, 2006 meeting of DTAG. Under § 124.13 of the ITAR, DDTC can, by means of a license, authorize transfer of technical data to foreign persons for an offshore procurement of defense articles if the various conditions of that regulation are met. DTAG requested clarification as to whether a license applicant was required to submit with the DSP-5 the procurement contract with the foreign party.

The DDTC’s “clarification” of DTAG’s question simply cites subsection (d) of § 124.13, which clearly answers DTAG’s question. Under subsection (d) that contract is submitted “at the time that it is accepted” which would be normally after the DSP-5 is granted. Indeed, it is hard to see how the parties could enter into an overseas procurement agreement for a defense article without some disclosure of technical data relating to that defense article. Thus it seems obvious — at least to me — that the license needs to precede the procurement contract.

My guess is that a company press release led to this story at TheManufacturer.com:

Catalyst earns ITAR registration

North Carolina based contract manufacturer Catalyst Manufacturing Services has been approved by the United States Department of State, Directorate of Defense Trade Controls, for ITAR (International Traffic in Arms Regulations) accreditation.

ITAR registration qualifies Catalyst to manufacture, acquire, and ship government and defense related articles and products.

Not really. DDTC registers anyone who files a form DSP-2032 and pays the requisite registration fees. The process does not involve approval, accreditation or earning anything.

This is why it’s a good idea to have export counsel review any press releases involving export control.

DDTC announced yesterday that the next meeting of the Defense Trade Advisory Group (“DTAG”) will be held on September 21. The meeting will be open to the public and will take place between 9:00 a.m. and noon at the Dean Acheson Auditorium (entrance located on 23rd Street, NW, between C & D Streets). The Federal Register notice provides information on how to arrange to attend the meeting.

The rumor is that this DTAG meeting will be used by DDTC to push through its new interpretation of the brokering rules in Part 129 of the ITAR. Under this new interpretation (which DDTC denies are new) foreign brokers would be covered by Part 129 even if their only contact with the United States is being involved in a transaction relating to a U.S. defense article.

These new interpretations of the brokering rules are the subject of an article I wrote for this month’s edition of The Export Practitioner. Click here to read the article.