1 UNCLASSIFIED

UNCLASSIFIED

Defense Technology Security Administration

DoD Export Review Process and License Preparation GuidanceRizwan “Riz” Ramakdawala

France 2009

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DTSA Mission

To promote United States National Security interests by protecting critical technology while building partnership capacity

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DTSA Strategic Goals

• Preserve the U.S. defense edge by preventing the proliferation and diversion of technology that could prove detrimental to U.S. national security

• Engage U.S. allies and partners to increase interoperability and protect critical technology

• Facilitate the health of the U.S. industrial base• Align and utilize resources to support DTSA’s

mission• Empower people and make DTSA a great place to

work

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Defense Technology Security Administration

As of 27 March 2009

DUSD for Technology Security Policy & Nat’l Disclosure Policy, ActingDirector, Defense Technology Security Administration (DTSA), Acting

Deputy Director DTSA

PolicyDirectorate

InternationalSecurity

TechnologyDirectorate

SpaceDirectorate

LicensingDirectorate

ManagementDirectorate

MilitaryAssistant

· License Reviews· Commodity

Jurisdictions· Voluntary &

Directed Disclosures

· Regulations

· Aeronautical· Electronics· Information &

Communications· Sensors & Lasers· Missiles & Space· NBC/Land/Naval/

Materials/Machine Tools

· Space Monitoring

· Regional Policy· Negotiations/

Liason· Capabilities/

Systems· Assessments/

CFIUS

· Secretariat NDPC· FG Disclosure

Policy· Security Surveys· General Security

Agmt· NATO Security

Policy· FN Pers Assgn

Policy· Monitor Int’l Sec

Prgm· Int’l Sec Tng

Oversight

· License Monitoring· Tech Exchanges· Tech Data Reviews

· Personnel· Security· Logistics· Comptroller· Info Technology· Info Assurance

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Department of Defense Role in Export Controls

Defense

StateArms Export Control Act

(Munitions)

CommerceExport Administration Act

(Dual-Use)

Refer

Recom

men

dRefer

Recomm

end

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• Defense perspective to the process:– National security review of export license applications – Developing multi-lateral control lists

• Unique knowledge of systems and capabilities– Operators and designers of systems

• National security dimension to strategic trade– Trade, foreign affairs, defense all part of the equation

• Strategic element to defense cost and awareness– Expensive countermeasures– Knowledge of extant technologies

Department of Defense Role in Export Controls

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U.S. Military Services:• U.S. Air Force - International Affairs Division (SAF/IA)

• U.S. Army – Deputy Assistant Secretary of the Army, Defense

Exports & Cooperation (DASA (DE&C))

• U.S. Navy and U.S. Marine Corps - Navy International

Programs Office (Navy-IPO)

DoD:• Defense Security Cooperation Agency (DSCA)

• Joint Chiefs of Staff (JCS/J5)

• Under Secretary for Policy

• Under Secretary for Acquisition, Technology and Logistics

• National Security Agency (NSA)

• Other DOD Agencies (DIA, DISA, DLA, NGA, NRO, etc.)

DoD Technology Transfer & Export Licensing Community

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• Factors Considered:

• Policies (region, country & technology)

• Level of technology (U.S. systems and countermeasures)

• End-user & end-use history

• Military operational impact

• Inter-operability requirements

• Bilateral, multilateral and international agreements

• Foreign availability of comparable systems

• Classified data transfers

DoD Review of Technology TransfersAssessing Impact on National Security

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Licensing Directorate

UNCLASSIFIED

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Licensing Directorate Mission

• Review licenses and other actions* related to the export of controlled hardware and technology.

• Develop and adjudicate DoD positions that address US national security concerns.

• Transmit final position to the licensing agency and defend.

• Develop, coordinate and provide DoD input to ITAR and EAR changes to licensing departments.

• Outreach export briefing support

*Includes Commodity Jurisdiction Requests, Enforcement Support, Advisory Opinions, Retransfer Requests

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LicensingDirectorate

Director

Case ProcessingExport Admin

4 License AnalystsCategory 1 – 2 – 7 –

8 – 9 – EAR99All things AERO

4 License AnalystsCategory 0 – 3 – 4 – 5

6 – 9A004All IC manufacturing

MunitionsDivision Chief

Dual-UseDivision Chief

Voluntary Disclosures/Commodity Jurisdiction

Team LeaderAnalyst

Land WarfareTeam Leader

Analyst (4)

Naval Warfare/Electronics

Team LeaderAnalyst (3)

Special ProjectsTeam Leader

Case ProcessingExport Admin (2)

Air WarfareTeam Leader

Analyst (4)

Space/MissileTeam Leader

Analyst (2)Gold Team LeaderRed Team Leader

Licensing Directorate

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What DTSA Provides to the

Licensing Process

• Warfighter Protection

• Technical Expertise

• National Security Perspective

• Honest Broker

• Program Insight

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DoD Munitions License Review Timeline(Calendar Days)

Case Receivedfrom State/DTC

Created at DTSA

"Prescreen"

Reply to DTSAwithin 25 days

OR

14 Day Extension (if DTSA approved)

Draft Decision byDTSA w/in 2 days

Potential Escalation by DoD Reviewers

w/in 2 daysEscalate

Position toState/DTC

No

EscalationProcessYes

Position to State/DTC

within 2 days

Yes

Referred toDoD Reviewers

No

Position toState/DTC

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Prescreen Process

• Eligible Licenses

•DSP-5

•DSP-73

•DSP-61

•Agreement amendments

•General Correspondence requests for re-export/re-

transfer

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• Precedents:• Same End User Country/Identical Data

• Rationale for new license?• Same End User Country/Different Data

• What is different?• Different End User Country/Identical Data

• Hardware (H/W) in furtherance of an agreement• Where in agreement is H/W identified/referenced?

• Minor changes with no impact on technology transferred• US Government/US military end user• Non-US origin hardware/technology• Expansion of scope

• Major or minor changes?

Prescreen Process (Cont’d)

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• Placement of explanatory information to aid prescreen process

• “Commodity” block of DSP-5, DSP-73, DSP-61

• “Specific Purpose” block of DSP-5, DSP-73, DSP-61

• Electronic Licenses – “Purpose of Procurement” section

• Cover Letter• First paragraph or as soon as possible thereafter

Prescreen Process (Cont’d)

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DoD Dual-Use License Review Timeline(Calendar Days)

Tiger Team Resolution

Reply to DTSA/LD

within 10 days

Position to Commerce/BIS within 2 days

Yes

Referred toDOD Reviewers

No

Position to Commerce/BISw/in 30 days

Interagency Agreement?

No

Operating Committee (OC)Review (OCLD

Issued)

Advisory Committee on Export Policy

(ACEP) ReviewILD Issued

License Issued

Yes

Export Administration Review Board (EARB)

POTUS Review

No

No

Yes

YesNo

Yes

License Draft Final (LDF)Issue w/in 20

days

Yes

No

Position to Commerce/BIS

w/in 30 days

Case Receivedfrom Commerce/BIS

Created at DTSA

Agreement Reached

DUSD Adjudicate

In-House ReviewEscalation

Process

LDF Challenged by DOD Reviewers

w/in 2 days?

Escalate?

Escalate?

Escalate?

Yes No

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Statistics – DoD Caseload

0

5000

10000

15000

20000

25000

30000

35000

40000

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

MUN

CCL

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Statistics – Average Time

0

5

10

15

20

25

30

35

40

45

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

MUN

CCL

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Approve with Conditions

24%

Approve67%

Other (RWA, etc)

8%

Objection>1%

35,976 Licenses Reviewed

Outcome of Calendar Year 2008 License Review

Munitions

Approve3%

Objection9%

Other (RWA, etc)

2%Approve with

Conditions86%

Dual-Use

18,178 Licenses Reviewed

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2008 USG Licensing Statistics

• Department of State: over 85,000 license applications; roughly 40% were referred to DoD for review.

• Department of Commerce: ~20,000 license applications; roughly 90% were referred to DoD for review.

• Why the difference?

– Technology Security risk varies. DoD reviews both the applicable control lists and the license history and has notified the licensing departments, in writing, of those licenses types where DoD staffing is not required

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• Average case processing days 2008: Munitions: 12Dual Use: 13

• Total Cases CY 2008:– Munitions: 35,976 (51% increase over CY 07)– Dual Use: 18,178 (3% increase over CY 07)

• Electronically staffed Munitions cases (currently): 69%

• Analyst to License ratio (weekly): Munitions: 1: 14Dual Use: 1: 16

• Percentage of cases prescreened: Munitions: 61%(last 90 days) Dual Use: 50%

Statistical Summary

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Technology Directorate

UNCLASSIFIED

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DirectorTom Devendorf

Electronics Team

Don Palmer

Information and

Communication Team

Maureen Raley

NBC/Land/Naval/Materials and Machine Tools

TeamTom Colandene

Aeronautical/JSFTeam

Jim Hatfield

Missile Defense & Space

TeamDr. Wes Cox

Sensors and Lasers

Mike Grenn

Deputy DirectorDr. James Brown

Defense Technology Security AdministrationTechnology Directorate

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Technology Directorate Mission

• To provide comprehensive, in-depth technical analysis to support the DoD export review process.

– To ensure that the DUSD (TSP/NDP)’s technology security objectives are considered in the planning and implementation of major international cooperative programs.

– To chair Technical Working Groups in technology specific areas to pinpoint critical U.S. technologies and develop sound export control recommendations for leadership consideration.

– To provide technical advice and consultation to U.S. Defense Industry on proposed international exports.

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Technical Review Process

• Technical review template:– What is the item?

– What capabilities does it provide?

– Are there other applications in addition to stated end-use?

– What is the foreign availability?

– What is the critical technology we are trying to protect?

– Options:• Approve

• Approve with provisos

• Deny

• Return without action

– Justification is provided for all recommendations

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Technical Review Process

• Marketing Licenses (DSP-5)– Complete Systems Description– Aircraft, Engines

• Build-to-Print (DSP-5)– 22 CFR 124.13– Complete Technical Data

• Temporary Exports (DSP-73)– “Mock-Up” Terminology– No Technical Data

• Manufacturing License/Technical Assistance Agreements– Information Regarding End-User Capabilities– Define “the Box”

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Program Technology Release Roadmap

• The key to developing and implementing a program is to address technology release decisions as any other acquisition milestone (e.g., development, testing, production)

• The best way to do so is to develop a “Technology Release Roadmap” which defines what technology decisions are required and when they are required to meet program goals

• Work backward from the end state, set goals, brief and follow-up!

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In its simplest form, DTSA’s role is to answer the following questions:

•The Who, What, When ,Where, How and Why of the export

•Decide whether the export is in the National Security interests of the United States

•Approve, limit or deny the export accordingly

Methodology

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Who are the recipients of the export?

•Do they exist? For how long?•Who owns them?•What is their normal business?•What other work do they do?•What contacts/contracts do they have?•Whom do they employ (third parties)?•What is their track record for protecting US technology?

Methodology - Who

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What are we trying to protect and why?

• What are the capabilities of the export?• Is it classified?• Is there foreign availability?• Is the export a precedent?• How does the U.S. use it?• How else could it be used?• What is the diversion scenario?• Can export be limited to address diversion concerns?

• Different model?• Capability modification?

• Are there countermeasures?

Methodology - What

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When is the export required?

•Will it support an ongoing operation?•What is the production schedule?•Are there contractual obligations?•What are the impacts of delay?

Methodology - When

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Where is the export required?

•What are the regional impacts?•What is the effect on current capability?•Are there treaty implications?•Are there coalition implications?

Methodology - Where

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How will the export take place?

•Government to Government?•End item or cooperative project?•Directly to the end user or through intermediaries?

•Long or short duration?• Is there a logistics tail (spare parts, follow-on support)?

Methodology - How

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Why do we want to support/oppose the export?

•Has the export been pre-coordinated?•Does it support US coalition building efforts?•Does the export match the end use?• Is the export required by the end user?•Will the export harm US national security?•Does it support US policies?•Does the export contribute to world peace?

Methodology - Why

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License Preparation Guidance

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• It is incumbent on the applicant to:

- Provide the information DoD needs to conduct a thorough technical review

- “Draw the box” for their export request in the application, so provisos are not imposed constraining the applicant for items they have no intention of exporting

Applicant’s Role

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• Focus on the basic elements of every license request: country, commodity, end-user and end-use

• Identify license precedents or case history. Include copies

• Provide clear, concise cover/transmittal letter

• Learn the ITAR/EAR, both layout and content

• Compliance before and after licensing

• Improve knowledge through recurrent training

Good Habits That Should Be Hard To Break

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• Tell us in plain English:• What you are doing• What you are not doing (may be more important)• Avoid jargon, don't rely on program names

• Describe the technical data flow between parties• ITAR Technical Data definition – Information which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions and documentation.

• Review previous license provisos

• Cite previous cases, more than one is OK

Reducing RWA's/ Avoiding Death by Proviso

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• Government POC• Verify POC information provided• If none, what Service would be interested

• Countries - not all countries are created equal

• Temporary Licenses• Tell us how will you maintain control• Note that Government and Industry end-users are treated differently• Be realistic with quantities

• List internet web-site to assist tech review

• Bottom line, pass the “Grandma check.” Grandma should be able to determine your intentions by reading your application

Reducing RWA's/Avoiding Death by Proviso

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Foreign National Employment

• Include the following information for DTSA review:

– Foreign national’s biography/resume– Description of job duties– Company organization chart showing where the foreign

national fits into the organization– List of all other foreign nationals working at the

company, their job title, and where they fit in the organization

– Copy of Non-Disclosure Statement– Copy of Technology Control Plan

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USXports Impact and Applicant’s Role

• We have improved our license review process by the deployment of a database called USXports. This database: – Accommodates electronically submitted licenses

– Supports automated staffing

– Allows “zero time” referral of cases

– Permits rapid review of electronically submitted data

Will do NONE OF THE ABOVE for ITAR licenses if you don’t submit to DTC electronically.

Will NOT support rapid review if you don’t submit in PDF text searchable format.

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Industry Briefings

• DTSA is constantly asked if a company can come in to brief a program.

•Wrong Answer: After the license is submitted (Too Late!)

•Right Answer: When requested.

•Best Answer: Before you start the program!• Gives us the opportunity to tell you our concerns so you may be able to engineer around them• Provides a heads up to you of USG concerns

•Remember, we are not buying your product, conduct brief accordingly

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Summary

• Good licenses make short reviews/limit provisos

• Electronic licensing will only be as good as the inputs: •See first bullet•PDF text searchable

• Industry Briefings – Let us know early when you are starting something new

• Technology Release Road Maps

• Clearly draw “the box” around every contemplated export

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DTSA Overview

Questions?