AUKUS Defense Trade Certified, ITAR Exemption

The State Department announced Thursday that the United States, United Kingdom and Australia have removed barriers to defense trade as part of their trilateral partnership.

State advised Congress that the Australia and United Kingdom export control systems are comparable to those of the United States and have implemented a reciprocal export exemption for US entities.

This will allow for the export of defense-related technology between the three partners without the need to go through the licensing process.

Friday State published an interim final rule to amend the International Traffic in Arms Regulations and implement an export licensing exemption for Australia and the United Kingdom. (see below)

The ITAR exemption will be effective September 1.

State also will implement a 90-day public comment period for the interim final rule to allow for further refinement in subsequent rulemaking.

The changes implemented by this rule "will maximize innovation and mutually strengthen the defense industrial bases of the three countries by facilitating billions of dollars in secure license-free defense trade," according to State.

McCaul Grouses

House Foreign Affairs Committee Chairman Michael McCaul released the following statement on the administration’s certification:

“I am pleased the administration has finally provided the long overdue defense trade exemption to two of our closest allies, Australia and the United Kingdom. However, there are still too many items that are critical to fully implementing AUKUS that are not included in this exemption.

"Until the Excluded Technologies List is limited to only a handful of items — as Congress intended — big government regulation will continue to hamper this crucial alliance’s ability to truly deter a conflict in the Indo-Pacific.”

Naval Nuclear Propulsion Agreement

On 5 August 2024, the Agreement Among the Government of Australia, the Government of the United Kingdom of Great Britain and Northern Ireland, and the Government of the United States of America for Cooperation Related to Naval Nuclear Propulsion (Agreement) was signed.

The Agreement will enable AUKUS partners to continue to share submarine naval nuclear propulsion information between the partners, and allow the United Kingdom and the United States to transfer material and equipment to Australia required for the safe and secure construction, operation and sustainment of conventionally armed, nuclear-powered submarines under the AUKUS partnership.

• The new agreement will allow for the transfer of naval nuclear propulsion plants and other equipment, including equipment needed for the disposal of naval nuclear propulsion plants.
• The agreement also expressly protects US intellectual property, including the prevention of information, material or equipment going beyond “the jurisdiction” without the consent of the US.
• There is also a provision in the agreement that will allow the UK and US to intervene in the arrangements between Australia and the International Atomic Energy Agency.

AUKUS partners welcomed the announcement of the selection of ASC Pty Ltd and BAE Systems to build Australia’s SSN-AUKUS submarines, and the selection of ASC as Australia’s nuclear-powered submarine sustainment partner. 

Rolls-Royce has announced that it will double the size of its Derby site to support the delivery of the UK and Australian programs, which will include building all of Australia’s nuclear reactors. 

Understanding Reached

Separate to the Agreement, the AUKUS partners also concluded a non-legally binding document, the Understanding Among the Government of the United States of America, the Government of Australia, and the Government of the United Kingdom of Great Britain and Ireland (Understanding). The Understanding outlines the AUKUS governments’ intended approach to certain articles of the Agreement and additional related political commitments, and is operative on the date on which the Agreement comes into force.

FR Notice

International Traffic in Arms Regulations: