State Department to Increase DDTC Registration Fees

For the first time in fifteen years, the State Department is proposing to revise and increase the registration fees for those required to register with the Directorate of Defense Trade Controls (DDTC).

This proposal aims to update sections 122 and 129 of the International Traffic in Arms Regulations (ITAR) to include the actual fees within the ITAR text and to revise the Department's methodology for determining fees paid by registrants.

Utilization of Registration Fees The fees, as mandated by AECA section 38, are used to fund a significant portion of the DDTC's operations. These operations include a range of services provided to exporters, importers, brokers, and manufacturers, such as the DDTC Response Team, Help Desk, and commodity jurisdiction determinations. In fiscal year 2022, the DDTC hosted over 60 outreach events and attended to more than 22,500 license applications, issuing authorizations worth over $153.7 billion.

Need for Fee Adjustment The proposed increase in fees comes in response to inflation and the enhanced services provided by the DDTC, such as the Defense Export Control and Compliance System (DECCS) which was launched in February 2020. 

Calculation of New Fees The Department has structured the registration fees into three tiers, based on the registrants' interactions with DDTC and whether they have received any favorable determinations during a prescribed look-back period.

The fees for Tier 1 and Tier 2 are proposed to increase in line with inflation over the past fifteen years.

• Tier 1 fees would rise from $2,250 to $3,000,
•  Tier 2 fees would go from $2,750 to $4,000.
• Tier 3 registrants, who require more frequent DDTC services, will see a more significant fee increase.

Public Engagement and Proposed Changes Over the past year, the DDTC has engaged with industry representatives through multiple events, with feedback suggesting support for the increased fees to maintain the improved services. The proposed changes aim to ensure the DDTC can continue to support the critical oversight of defense exports that align with U.S. national security and foreign policy objectives.

Returning Fee Amounts to ITAR In addition to the fee adjustments, the Department proposes to reincorporate the fee amounts into the ITAR itself, reversing a 2013 change that moved this information to the DDTC website. This change aims to make the fee information more accessible and transparent.