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US Officials Talk Upcoming ITAR Changes, Work on AUKUS Exemption

The State Department’s Directorate of Defense Trade Controls is working on a host of proposed or final regulations that could be published in the next few months, officials said last week, including revisions to its defense services controls and an exemption for certain defense trade with Australia and the U.K.

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One proposed rule is expected to make changes to certain definitions and controls related to defense services in the International Traffic in Arms Regulations (see 2312280016), an official said during the annual Bureau of Industry and Security conference last week. The official declined to say what exactly the rule will change, but said DDTC may revise the scope of activities that are covered by defense services, and is “making sure that it doesn't create confusion.”

“I realize that's probably a very broad answer,” said the official, speaking on background under a policy for certain career personnel at the conference. “It's going to be a major change for service providers.”

The official also said DDTC is planning to soon issue a rule to finalize its expanded definition, proposed in 2022, for activities that are not exports, reexports, retransfers or temporary imports (see 2212150028). Another official during the conference said the State Department is reviewing U.S. Munitions List categories IV (Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, and Mines) and XV (Spacecraft and Related Articles). "Stay tuned for that," the official said.

The agency also has been forced to delay its rollout of another rule under its ongoing ITAR reorganization effort, that official said. DDTC finalized its first ITAR reorganization rule in February 2023 (see 2203220013), but the official said the agency has had to postpone work on that project to focus on creating a new defense trade exemption as part of the Australia-U.K.-U.S. (AUKUS) security partnership.

“Really, my priority right now is addressing the congressional deadline I have to report back to Congress on AUKUS, and potentially how we're going to move forward with an ITAR exemption,” the official said. They said their deadline is April 20.

A provision included in the 2024 defense spending bill calls on the State Department to certify that Australia and the U.K., have export control regimes “comparable” to that of the U.S. before the agency can ease certain defense trade restrictions with those countries, including through a new trade exemption (see 2309270007 and 2307140019). Another government official during the conference said DDTC is currently working with representatives from academia and research institutes “to ensure that we get the exemptions right.”

“These exemptions are not only going to allow one-way trade from the U.S. to Australia or the U.S. to the UK,” the official said, “but really seamless movement between and among the three partners.”

The official didn’t provide a date for when the agency plans to issue the exemption, but said it hopes to publish a “draft exemption text soon.”