On April 12, 2021, the State Department’s Directorate of Defense Trade Controls (DDTC) issued additional guidance regarding changes that have been made to the International Traffic in Arms Regulations (ITAR) pertaining to export of defense articles or services to Russia. The guidance summarizes changes that were implemented on March 18, 2021, when the Departments of Commerce, State and the Treasury imposed sanctions and export restrictions on numerous Russian officials and government entities in response to the Russian Federation’s imprisonment and alleged previous poisoning of opposition figure Aleksey Navalny. See International Trade Update of March 8, 2021.
Most notably for DDTC, effective March 18, 2021, the ITAR was amended at § 126.1 to include Russia in the list of countries “subject to a policy of denial for exports of defense articles and defense services,” with limited exceptions. The guidance issued by DDTC reiterates this new licensing review policy towards Russia and offers answers to several questions that the new policy of denial has raised. DDTC has clarified that while no new export licenses or other approvals that identify Russia and do not satisfy one of the carve-outs will be issued (including amendments to existing agreements and licenses in furtherance of existing agreements), existing licenses remain valid. DDTC will contact holders of exiting and currently valid licenses in the event that the “existing license or other approval is terminated, suspended, or otherwise revoked.” Further, DDTC has clarified that license applications related to temporary imports “will continue to be adjudicated on a case-by-case basis consistent with U.S. foreign policy and national security considerations.” As for ITAR-related brokering activities involving Russia, DDTC states that it will deny requests for approval of any brokering activities.
DDTC has also issued a series of FAQs. Regarding all pending Russia license applications filed prior to March 18, 2021, DDTC is assessing those applications “to determine [Russia’s ] role in the transaction. If the transaction does not meet one of the carve-outs, the license application will be denied. If it does meet one of the carve-outs, the license application will be reviewed on a case-by-case basis.” Another FAQ confirms that, generally and with limited exceptions, license exemptions may no longer be used for exports to Russia. With regard to Technical Assistance Agreements (TAA), another FAQ states that the policy of denial for Russia does apply to “in furtherance of licenses” that do not involve Russia but where a related overarching TAA does involve Russia. Finally, DDTC confirms in one FAQ that these ITAR amendments do not have an expiration date.