Law Firm: Carefully Check Eligibility for New Underwater Drone ITAR Exemption
A new State Department export license exemption for underwater drones provides “new flexibility” for companies using those drones for certain commercial and scientific operations, but companies still need to set “careful compliance guardrails” to make sure they’re using the exemption correctly, K&L Gates said in a client alert.
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The exemption was outlined in August in a final rule, which carved out certain unmanned underwater vessels from license requirements if they use systems “below certain weight and performance thresholds” (see 2508260011). K&L Gates said exporters should “closely examine their current and planned UUV inventories and operations to confirm whether” the exemption applies, adding that it may cover certain activities related to scientific research or natural resource exploration; commercial or civil infrastructure maintenance, installation, or repair; and search and rescue missions.
Exporters also should analyze whether “any future business development plans contemplate the transfer of newly controlled technical data or defense services relating” to those underwater drones.
The law firm noted that the State Department rule made other revisions to the International Traffic in Arms Regulations, including by removing controls on certain items ahead of their transition to the Commerce Department’s Export Administration Regulations. Exporters may need to update their trade compliance procedures, the law firm said, especially if their items no longer are controlled under the U.S. Munitions List.
Companies should carry out a jurisdiction and classification analysis to determine whether the item is still subject to the ITAR or is now subject to the EAR, the firm said. “Such changes to the jurisdiction and classifications of a company’s items may require timely revisions to the company’s export compliance procedures and personnel training modules.”