The Departments of State and Commerce are each issuing separate but complementary proposed rules
By publishing both rules simultaneously and seeking public comment on the proposed changes, DDTC and BIS hope to ensure awareness as to the distinct areas of coverage of U.S. person activities under their respective legal and regulatory authorities.
The State Departemnt's review of the definition of "defense service" in the ITAR focused on identifying activities of U.S. persons that
Following that review, the Department proposes a revised definition of defense service to better describe existing controls and the scope of activities
it proposes to regulate through the revised definition and also proposes certain additions to the United States Munitions List
Background
In considering what to designate as a defense article or defense service on the USML, the State Department primarily focuses on those articles or services that provide a critical military or intelligence advantage such that they warrant control under the ITAR.
During its recent review of defense services, DDTC identified certain (1) military, (2) cyber, and (3) intelligence services, furnished to foreign persons that are not currently controlled or which are controlled but for which the applicable control language could benefit from additional clarity.
The Department now proposes a new definition of defense service, coupled with a detailed articulation of currently and newly controlled services on the USML, along with language that would provide the basis for the regulation of certain proposed new services as defense services.
Included in this proposal is specific language regarding the furnishing of intelligence-related assistance that is not directly related to a defense article to certain types of foreign persons (i.e., a foreign unit, force, or government) or their proxies or agents.
The Department assessed that these activities warrant and require control equivalent to those of intelligence-related defense articles since such assistance (including training or consulting) similarly furnishes a critical military or intelligence advantage to the foreign person.
Proposed Design and Structure of Amendments
it does not treat training to mean only direct instructional activity. The proposed addition would reaffirm that providing the tools or means of furnishing training to a foreign person so that the foreign person may conduct training in lieu of the regulated person is included in the control
As to the objective of the proposed additions to the USML, the Department determined that certain intelligence activities that do not involve defense articles provide a critical military or intelligence advantage such that they warrant and require revised controls under the ITAR.
"Persons furnishing certain military assistance to foreign persons can cause local and regional instability in a manner equal to or greater than the supply of a tangible article or weapon to a foreign person end-user," the Departemnt notes.
The proposed amendments utilize a method of control sometimes known as “catch and release,” which functions to initially describe a broad range of activities as a “catch,” and then specifies certain limited carve-outs as a “release” from the “catch.”
As applied here, the catch- and-release design establishes that furnishing certain forms of listed assistance to a foreign person is controlled.
Included in the releases for both intelligence assistance and military assistance are activities performed by U.S. persons who have been drafted into the regular military forces of a foreign nation, (This exclusion has been in ITAR since 1984.)
The proposed USML Category IX(s)(3) describes defense services relating to military assistance and provides specified carve-outs.
Specifically, the proposed language controls persons furnishing assistance that creates, supports, or improves the organization or formation of foreign military or paramilitary forces.
Changinf the terminology from "regular and irregular" to "military or paramilitary" focers is intended to put illicit actors or unassuming persons on even clearer notice that providing training to create, support, or improve the military or paramilitary capabilities of any kind of unit or force, governmental or not, is a defense service requiring authorization.
Likewise, the creation of a separate entry separating the control text governing intelligence assistance from the control text describing military assistance is intended to provide clearer notice to the regulated community, that the ITAR regulates services related to intelligence activities, regardless of nexus to a defense article.
Including “training or consulting” in the text allows the Department to specifically and explicitly describe on the USML the conduct of U.S. persons (or foreign persons in the United States) who furnish any described defense service to enable a foreign government, unit, or force, or their proxy or agent, to conduct intelligence activities themselves.
The Department seeks input on the clarity and scope of the “for compensation” criterion as well as input on the six carve-outs or exclusions.
The proposed language would carve out six specific sets of activities from the proposed controls on intelligence assistance.
Three of the carve-outs to intelligence assistance activities are identical to the three military assistance activities carve- outs already found:
The fourth carve-out related to intelligence assistance proposes to carve out information technology services that are "ordinarily provided to allow any business entity to operate internally as a modern business environment, without a sector-specific specialization."
The fifth carve-out makes clear that the ITAR does not interfere with an otherwise lawful activity of a U.S. local or federal law enforcement or intelligence agency.
The sixth carve-out intends to avoid imposing a duplicative export licensing requirement for activitie already regulated or proposed for regulation under the ITAR or EAR to the destinations of concern.
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Filed on: 07/25/2024 at 8:45 am |
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