Northwest Export Controls Conference - Seattle … - 02 - Summer/07-26... · Directorate of Defense Trade Controls (DDTC) Bureau of Political Military Affairs U.S. Department of State

Northwest Export Controls ConferenceSeattle WA – July 26-27, 2017

Tony DearthManaging Director (Acting)

Directorate of Defense Trade Controls (DDTC)Bureau of Political Military Affairs

U.S. Department of State

1

Overview

• Mission Statement• Organizational Overview• 2016 Stats• New Administration• What’s Next for DDTC• Contact Information

2

9th Annual Northwest Export Conference Session 2: International Traffic in Arms Regulations Tony Dearth

Exporting and the New Administration - Compliance and Opportunities July 26-27, 2017

Page 1 of 11

Mission Statement

Ensure commercial exports of defense articles and defense services are consistent with U.S. national security and foreign policy objectives.

Assistant Secretaryfor

Political-Military Affairs (PM)Amb Tina Kaidanow (A)

Under Secretary for Arms Controls & International

Security (T)Vacant

Deputy Assistant Secretary for

Defense Trade Controls

Brian Nilsson


Regional Security and Security Assistance

Kevin O’Keefe (A)


Plans, Programs, and Operations

Maj Gen Mike Rothstein

Assistant Secretary forInternational Security and

Non Proliferation (ISN)Eliot Kang (A)

Assistant Secretary forArms Control Verification and

Compliance (AVC)Anita Friedt (A)

Department of StateYellow Borders are Political Positions



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Office of DefenseTrade Controls

Compliance

Arthur Shulman (A)

Deputy Assistant SecretaryOf Defense Trade Controls

Brian Nilsson


Licensing

Terry Davis (A)


Policy

Ed Peartree

Office of DefenseTrade ControlsManagement

Senior AdvisorsandStaff

Managing Director

Tony Dearth (A)

DDTC OrganizationAll Non-Political Professional Staff

Licenses Submitted toDDTC by Calendar Year

6

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

2010 2011 2012 2013 2014 2015 2016



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Cases Received

7

67.6%

2.1%

6.1%

0.7%

8.7%

9.5%

5.2%

2013 Total Cases: 78,810

62.8%

2.6%

7.7%

1.0%

7.6%

12.0%

6.3%

2016 Total Cases: 41830

DSP‐5 DSP‐61 DSP‐73 DSP‐85

Amend. AGs GC/BL

Licensing Decisions

48.0%

40.5%

11.1%

0.4%

2013

34.6%

49.1%

15.6%

0.6%

2016

Approve Approve w/Provisos RWA Deny



Page 4 of 11

Overall RWA Statistics

Average Annual Stats

YEAR CASES AVG AGE AVG RWA

2012 86,188 18.6 10.6%

2013 78,387 19.2 11.3%

2014 59,527 21.9 14.5%

2015 44,523 26.58 16.0%

2016 41,830 28.08 15.6%

2017 (May) 16,370 27.68 15.4%

70Median

Commodity Jurisdiction Determinations



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USML – 145 (15%)

Other – 2 (0%)

RWA – 152 (15%)

Split – 10 (1%)

CCL – 655 (68%)

Most Prolific USML Categories:1. Cat XII (33)2. Cat XI (28)3. Cat VIII (26)

CJ Decisions FY 2016

Disclosure Trends by FY

12

0

500

1000

1500

2000

2500

Directed806

11071153

13121482 1493

456

2027

1318

1120985



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New Administration

• Regulatory Burden Review• E.O. 13771 (Reg Freeze) and 13777 (Task Force)

• State has “Foreign Affairs” exception, Commerce does not

• Review of Arms Transfer Process

• Slow Filling of Political Vacancies

• State Department Reorganization Review• SecState Budget Remarks – 8% personnel reduction

• State Department Hiring and Transfer Freeze• This has an impact on staffing levels

13

What’s Next For DDTC

• Category I-III• Going through final clearance process

• 126.4 “By or For the USG” Exemption

• Continue USML List Reviews• Cats VI, VII, XIII, XX under interagency review

• U.S. Persons Working Abroad

• Definitions Part Two• Defense Services, Technical Data, Public Domain

14



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What’s Next for DDTC

• Program Licenses

• Brokering

• ITAR “Defrag”

• IT System Modernization

15

ITAR “Defrag”

16



Page 8 of 11

ITAR “Defrag”

• Definitions Exercise – Where are these?• Performance Capability

• Vendor

• Payload

• Applicant

• Dual National

• Blue Lantern

17

Why ITAR “Defrag”

• The average life cycle of a federal regulation has a complete rewrite every 15 years. ITAR >30 years old

• Format/content require revalidation and adjustments due to years of narrowly scoped and topic-centric revisions

• The ITAR currently contain numerous inconsistencies, contradictions, gaps, and overlaps resulting in unclear, ambiguous guidance

• Failure to reverse this trend now will only exacerbate the problem, making the publication of future rules more difficult to achieve in a timely manner

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How to ITAR “Defrag”

• Consolidation of like content and ordering into an orderly, linear, readable format

• Examples of consolidation and organization:• Separation of Part 120 into General Information and

Definitions sections

• Reevaluation/migration of definitions into Part 120

• Migration of exemptions, exceptions, and exclusions into a dedicated Part of the ITAR

• Incorporation of Agreements Guidelines and similar related policy

19

IT Modernization Changes

• Single interface for all DDTC online services

• Improved availability

• Enhanced security

• Use of USG “Cloud”

• Streamlined DDTC business processes and automated workflow

• Automation for data reuse



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Resources

• DDTC’s website: www.pmddtc.state.gov

• Provides extensive information on AECA/ITAR, detailed FAQs, Directorate contact information

• DDTC Response Team, 202-663-1282, [email protected]

• Provides single point of contact for industry questions and status updates

• 2013 stats: 24,000 emails + 26,000 phone calls = 50,000 queries (200/day)

• IT Questions: DDTC Help Desk, 202-663-2838, [email protected]

• Registrants/applicants can call for help with using our IT systems

• Case status: http://elisa.dtsa.mil/

• Applicants can check the status of their cases on line

• Applicants can call licensing officers directly 21



Page 11 of 11

Documents

Northwest Export Controls Conference - Seattle … - 02 - Summer/07-26... · Directorate of Defense Trade Controls (DDTC) Bureau of Political Military Affairs U.S. Department of State