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Direct Commercial Sales of
Munitions Items: Policies &
Procedures
Bryan P. Walsh
Foreign Affairs Officer
Office of Defense Trade Controls Policy
Directorate of Defense Trade Controls
Bureau of Political-Military Affairs
U.S. Department of State
U.S. Department of State
2
Organizations and
Regulations
Department of State
Foreign Military Sales (FMS)
Security Assistance Management Manual
(SAMM)
Office of Regional Security and Arms Transfers (RSAT)
*Non-Regulatory Body
Direct Commercial Sales (DCS)
International Traffic in Arms Regulations
(ITAR)
Directorate of Defense Trade Controls (DDTC)
*Regulatory Body
Department of Commerce
Direct Commercial Sales (DCS)
Export Administration Regulations (EAR)
Bureau of Industry and Security (BIS)
*Regulatory Body
U.S. Department of State
Bureau of Political Military Affairs
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Amb. Tina Kaidanow
Acting Assistant Secretary
Political-Military Affairs
Brian Nilsson
Deputy Assistant Secretary
Arthur Shulman
Director (Acting)
Office of Defense Trade Controls Compliance
Terry Davis
Director (Acting)
Office of Defense Trade Controls Licensing
Tony Dearth
Director (Acting)
Office of Defense Trade Controls Management
Ed Peartree
Director
Office of Defense Trade
Controls Policy
Kevin O’Keefe
Deputy Assistant Secretary (Acting)
Mike Miller
Director
Office of Regional
Security and Arms
Transfers
Kevin O’Keefe
Director
Office of Security Assistance
Directorate of Defense
Trade Controls
(DDTC)
Licenses
Compliance
ITAR Updates
End-Use Monitoring
Regional Security and
Arms Transfers
(RSAT)
Foreign Military Sales
Third Party Transfers
Excess Defense Articles
U.S. Department of State
United States Munitions List
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I Firearms XII Fire Control Systems
II Armament XIII Auxiliary Equipment
III Ammunition/Ordnance XIV Toxicological Agents
IV Missiles, Rockets, Torpedoes XV Spacecraft Systems
V Explosives, Propellants XVI Nuclear Weapons
VI Naval Vessels XVII Classified Articles
VII Tanks & Vehicles XVIII Directed Energy Weapons
VIII Aircraft XIX Gas Turbine Engines
IX Military Training & Equip. XX Submersible Vessels
X Protective Personnel Equip. XXI Miscellaneous Articles
XI Electronics
U.S. Department of State
Direct Commercial Sales
(DCS) Export Licenses
Hardware & Technical Data
• Permanent Export
• Temporary Import (hardware only)
• Temporary Export (hardware only)
• Classified Transactions
Services, Manufacturing, Distribution
• Technical Assistance Agreement (TAA)
• Manufacturing License Agreement (MLA)
• Warehouse Distribution Agreement (WDA)
Other Requests, “General Correspondence” (paper)
• Brokering
• Re-export/Retransfer Requests
• Advisory Opinion
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DDTC processed 44,100
authorizations in Fiscal Year
2015
U.S. Department of State
Export License
Life Cycle
Initial Review DDTC
Licensing and Watch List
Department of Defense • Defense Technology Security
Administration (DTSA)
• Army, Navy, Air Force, JCS
• National Security Agency
• Other DOD Offices
Department of State • Regional Bureaus
• Regional Security and Arms
Transfers (RSAT)
• Human Rights (DRL)
• Other Bureaus & Offices
Other Agencies/Entities • Missile Technology Export
Committee (MTEC)
• Energy
• NASA
• DHS/HSI, FBI
Final Review
DDTC
• Congressional Notification
• Missile Technology
Assurances
Final Action
*Interagency review required for approximately 30% of all authorization requests examined by DDTC.
Inter-Agency Review*
U.S. Department of State
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End User/Consignee
Should Provide…
• Detailed End-Use Certificate/Statement (on official letterhead):
• Ultimate End-User
• End-Use (include platform, e.g. aircraft type)
• Intermediate Consignees
• Freight forwarder(s)
• Maintenance and repair providers
• Any company that will take possession of the item
• Supporting Documentation from Ultimate End-User:
• Non-Transfer and Use Certificate (DSP-83), if required or requested
• Contract and/or Non-Disclosure Agreement
• Purchase order
• Provide Valid Contact Information:
• Name and phone number of person familiar with the procurement
• Contact information for intermediate consignees and end-user
U.S. Department of State
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Non-Transfer and Use
Certificate (DSP-83)
• Assures end-user will not retransfer, resell,
or dispose of defense articles without USG
permission
• Required for SME and classified exports, at
a minimum
• Signed by the end-user and your
government (if different)
U.S. Department of State
Reexports/Retransfers
• Defense articles may not be reexported, retransferred, or
used in a different end-use without DDTC authorization
• Request may be submitted by the foreign end-user or the
U.S. applicant on behalf of the end-user
• Known as “General Correspondence” or “GC”
• Request must be made in writing and submitted to:
– PM/DDTC, SA-1, 12th Floor
Directorate of Defense Trade Controls
Bureau of Political Military Affairs
U.S. Department of State
Washington, D.C. 20522-0112
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U.S. Department of State
Reexports/Retransfers
• Reexport/retransfer requests must contain:
– Reference to the precedent licenses
– Description of commodity w/USML Categories
– Quantity and Value
– Purchase documentation (permanent only)
– Description of new end-use
– Identification of new end-user
– Detail narrative/explanation
– Technical data involved
– 126.13 Certification
U.S. Department of State
Congressional Notification
• 22 CFR 123.15
• NATO + 5 (Japan, Australia, New Zealand, Republic of Korea, Israel)
• $25 million Major Defense Equipment
• $100 million (any defense articles, technical data and defense services)
• Non-NATO + 5
• $14 million Major Defense Equipment
• $50 million (any defense articles, technical data and defense services)
• USML Category I Firearms - $1 million
• Export of a commercial satellite for launch from, and by nationals of the Russian Federation, Ukraine, and Kazakhstan
• 22 CFR 124.11
• Manufacture abroad of SME regardless of value
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U.S. Department of State
12
USML Commercial Defense Exports
to Taiwan (CY 2011-2015)
Calendar
Year
Authorized
Permanent
Defense
Article
Export Value
Authorized
Defense
Service and
Agreement
Export
Value
Total Value
($USD)
Shipment
Value
($USD)
2015 $11.2M $253.2M $264.4M $5.4M
2014 $17M $626.6M $643.6M $8.7M
2013 $211M $213.2M $424.2M $43.8M
2012 $234.5M $455.1M $689.6M $40.2M
2011 $170.9M $1.76B $1.93B $39.5M
Total $644.6M $3.3B $3.95B $137.6M
U.S. Department of State
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Defense Trade to Taiwan
By USML Category (CY 2015)
Category
Total Value
($ USD)
VIII – Aircraft and Related Articles $7.83 million
XI – Military Electronics $2.41 million
II – Guns and Armament $482,199
III – Ammunition/Ordnance $397,035
VII – Tanks and Military Vehicles $90,795
U.S. Department of State
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Questions?
DDTC’s website: www.pmddtc.state.gov ( a lot of resources)
Generic Questions: DDTC Response Team, 202-663-1282
IT Issues: DDTC Help Desk, 202-663-2838
Case status: http://elisa.dtsa.mil/
Contact Information
