The State Department is working on a final rule that would amend restrictions against Cyprus under the International Traffic in Arms Regulations. The rule, sent to the Office of Information and Regulatory Affairs Aug. 29, could build on steps the State Department has taken to relax export restrictions for certain defense goods and services involving the country (see 2309130028).
Defense firm RTX Corp. will pay $200 million to settle alleged violations of U.S. defense export controls, the largest standalone export penalty ever issued by the State Department. RTX voluntarily disclosed the 750 violations, the agency said in a charging letter, most of which involved “historical” issues by an aerospace firm acquired by RTX in 2018.
The State Department fined U.S. defense firm RTX Corp. $200 million to settle alleged violations of the Arms Export Control Act and the International Traffic in Arms Regulations, one of the largest standalone export penalties ever issued by the agency. The Directorate of Defense Trade Controls said the 750 violations, most of which involved the “historical systemic failures” of an aerospace systems company acquired by RTX, stemmed from export control classification issues, the illegal “hand-carry” of defense items to another country and violations of the terms of DDTC licenses. RTX voluntarily disclosed the violations, which included exports of prohibited items to Lebanon, Iran, Russia and China.
Simon Courtman, a former commodity jurisdiction analyst with the State Department’s Directorate of Defense Trade Controls, has joined General Dynamics as an international trade and compliance manager, he announced on LinkedIn this week. Courtman left DDTC in 2020 and has since worked as a compliance official for several companies, including KPMG and ST Engineering.
Although export control reforms by the U.S., Australia and the U.K. could exempt about three-quarters of defense trade between the countries and reduce compliance costs for industry, more updates are needed to remove lingering licensing barriers and address structural challenges posed by the International Traffic in Arms Regulations, researchers said this week.
A new rule issued by the State Department last week will finalize an exemption for defense trade between the U.S., Australia and the U.K., potentially removing export control barriers for a range of items that had previously faced strict license requirements under the International Traffic in Arms Regulations. Australia and the U.K. said the exemption and other AUKUS changes are expected to lift restrictions on billions of dollars worth of exports each year and eliminate hundreds of export licenses once the “license free” trade begins next month.
The State Department on Aug. 15 submitted a determination to Congress that the Australia and U.K. export control systems are “comparable” to those of the U.S., clearing the way for both countries to potentially benefit from defense trade exemptions as part of the AUKUS partnership (see 2408070048). The agency said it plans to “shortly publish” an interim final rule to amend the International Traffic in Arms Regulations and implement that exemption, which will take effect Sept. 1.
The State Department this week published a final version of a rule to expand its regulatory definition of activities that don’t need a license because they don’t qualify as exports, reexports, retransfers or temporary imports. The rule, effective Sept. 16, is largely consistent with the proposed version, though the agency made changes to narrow its scope and make sure certain temporary imports will still require a license.
A new set of export controls on U.S. persons activities and other transactions could require “dramatic expansions” to some companies’ internal compliance programs, Akin Gump said this month, including additional compliance training, end-user certifications and greater due diligence of suppliers and customers.
The State Department's Directorate of Defense Trade Controls this week announced its roster of members for the 2024-2026 term of the Defense Trade Advisory Group. The DTAG, which offers recommendations to DDTC about defense export control issues, recently suggested improvements to the government's foreign military sales program (see 2310130032).