DDTC Supplements and Clarifies its Electronic Agreement Guidelines
The Directorate of Defense Trade Controls has issued an update document containing additions and clarifications to its Guidelines for Preparing Electronic Agreements.
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DDTC notes that failure to adhere to the guidelines may result in a delay in review of a license application or a return without action (RWA).
(According to DDTC sources, this document should be used be used as a supplement to the current version of the Guidelines (Revision 2). DDTC is not currently planning to issue a third revision of the Guidelines. See ITT's Online Archives or 04/29/10 news, 10042917, for BP summary of Revision 2.)
Agreements Will No Longer be Re-baselined Once Electronic
DDTC has added new guidance concerning re-baselines, which states that:
"Once an agreement is electronic, the agreement will no longer be re-baselined. Applicants will continue to submit amendments against the electronic agreement until the agreement expires or is terminated.
Though agreements will only be approved for a maximum duration of 10 years, applicants may still request extensions via an amendment for up to 10 years from the date of the amendment request."
DDTC notes that this change is the result of applicants submitting conformed agreements and DDTC issuing the complete list of provisos with each approval, making it unnecessary to re-baseline agreements once they are electronic. Paper agreements that require a major amendment must still be re-baselined to convert it to an electronic agreement.
Statement Required for 124.16 Dual/Third Country National Retransfer Authorizations
DDTC has issued new guidance on dual and/or third country nationals pursuant to 22 CFR 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), which states that:
"For an agreement requesting the provisions of 22 CFR 124.16, and which also includes foreign licensees and/or sublicensees from countries outside of 22 CFR 124.16 countries, the applicant must include a statement in the agreement after the 22 CFR 124.16 paragraph addressing the applicability of the provisions of 22 CFR 124.16 so it is clear to the parties of the agreement when 22 CFR 124.16 is and is not applicable.
Example Statement:
'The provisions of 22 CFR 124.16 are only applicable to Companies A, B, and C while in Countries X, Y, and Z.'"
(Dual and/or third country nationals requested pursuant to 22 CFR 124.16 must be requested in Block 20 of the DSP-5 vehicle. See Section 3.6(b) of the Guidelines for Preparing Electronic Agreements for determining the applicability of 22 CFR 124.16.)
Clarification on Identifying Foreign End-Users in Block 14 of DSP-5
DDTC has issued a clarification concerning identifying foreign end-users in the DSP-5 vehicle, which states that:
"All foreign end users must be identified in Block 14 of the DSP-5 vehicle. To help distinguish end users from foreign licensees, applicants should identify end users in the following manner:
Name: Enter the name of the foreign end user
Address: Enter “End User” in this field
City: Enter “End User” in this field
Country: Enter the foreign end user’s country
Foreign end users who are also signatories to the agreement need only be listed in Block 14 of the DSP-5 vehicle once as a foreign signatory. In addition, foreign end users should be identified in Block 14 instead of identifying a Sales Territory in Block 18 of the DSP-5 vehicle."
Clarification of Countries in 124.8(5) Dual/Third Country National Requests
DDTC has issued a clarification of countries which may be included in dual and/or third country national requests pursuant to 22 CFR 124.8(5) (Clauses required both in manufacturing license agreements and technical assistance agreements) as follows:
"All requested countries (to include NATO countries, European Union countries, Australia, Japan, New Zealand, and Switzerland) requested pursuant to 22 CFR 124.8(5) must be listed in Block 18 of the DSP-5 vehicle."
(See ITT's Online Archives or 08/25/10 news, 10082510, for BP summary of DDTC's reminder to industry that electronic filing of agreements is required as of September 1, 2010.)
Contact - DDTC Response Team (202) 663-1282