Clarification of §124.13 of the International Traffic in Arms Regulations (ITAR)

Last Updated: January 2, 2008

During the Defense Trade Advisory Group (DTAG) Plenary held on April 21, 2006, the “ITAR Clarification Working Group” Co-Chairman Charles Graves presented that a clarification was needed for 22 CFR § 124.13, specifically on whether evidence of offshore purchase must accompany the DSP-5 application to export the build-to-print drawing. Following are the ITAR language in question, DTAG comment on the language, and DDTC response.

CURRENT ITAR LANGUAGE

§124.13 Procurement by United States persons in foreign countries (offshore procurement).      Notwithstanding the other provisions in part 124 of this subchapter, the Directorate of Defense Trade Controls may authorize by means of a license (DSP-5) the export of unclassified technical data to foreign persons for offshore procurement of defense articles, provided that:
     (a) The contract or purchase order for offshore procurement limits delivery of the defense articles to be produced only to the person in the United States or to an agency of the U.S. Government; and
     * * * * *

DTAG COMMENT

Section 124.13 states, in pertinent part: “… the Office of Defense Trade Controls may authorize by means of a license (DSP-5) the export of unclassified technical data to foreign persons for offshore procurement of defense articles, provided that: (a) The contract or purchase order for offshore procurement limits delivery of the defense articles to be produced only to the person in the United States or to any agency of the U.S. Government; and …” This provision needs to be clarified as to whether evidence of offshore purchase must accompany the DSP-5 application to export the build-to-print drawing.

DDTC RESPONSE

An applicant obtains an “approved” or “approved with provisos” DSP-5 license for the export of unclassified technical data to foreign persons for offshore procurement of defense articles in accordance with 22 CFR § 124.13. Then the applicant submits its offshore procurement bid proposal to the authorized foreign persons and the proposal is accepted by one or more. Pursuant to 22 CFR § 124.13(d), “[t]he person in the United States then provides the Directorate of Defense Trade Controls with a copy of each contract, purchase order or subcontract for offshore procurement at the time it is accepted” (by the foreign person).