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International Traffic in Arms Regulations

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On December 26, 2019, the US State Department’s Directorate of Defense Trade Controls (“DDTC”) published a long-awaited Interim Final Rule (the “Interim Rule”) revising a number of definitions in the International Traffic in Arms Regulations (“ITAR”). While DDTC was accepting comments until January 27, unless a new or revised rule is published, the Interim Rule will go into effect on March 25, 2020. These changes will permit companies storing and transmitting ITAR technical data to benefit from cloud computing and email services that utilize global platforms.

On January 6, 2020, the US Department of State’s US Directorate of Defense Trade Controls (“DDTC”) published a set of Frequently Asked Questions (“FAQs”) (available here), which provide long-awaited clarifications regarding the registration and authorization requirements of the International Traffic in Arms Regulations (“ITAR”) applicable to the provision of defense services abroad by natural US persons employed by foreign persons. The main points are summarized below: The FAQs clarify that no registration with DDTC is…

The US Treasury Department’s Office of Foreign Assets Control (“OFAC”), the US State Department (“State”), and the US Commerce Department (“Commerce”) issued rules adjusting maximum civil monetary penalties (“CMPs”) under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (“FCA”).

Alexandre Lamy published an article, “Supply Chain Risks Related to US Sanctions and Export Control Issues,” in the February 2019 issue of Baker McKenzie’s “Aerospace & Defense Compliance Bulletin.”  The text of that article is provided below.

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Supply Chain Risks Related to US Sanctions and Export Control Issues

When companies and compliance departments think about US sanctions and export control risks, they often focus on sales to customers and exports/reexports from one country to another.  In that context, the compliance focus is typically on confirming that a customer and other parties involved in a sale and shipment are not restricted parties and that the transfer of a product is authorized under applicable export-control regulations.  This is only half the story.  Companies can have similar risks in their supply chain, which can be disruptive to a company’s operations beyond one transaction or customer relationship if not property managed.