Directorate of Defense Trade Controls (DDTC) Updates

The Department of State has concluded an administrative settlement with AeroVironment, Inc. (AV) of Simi Valley, California, to resolve alleged violations of the Arms Export Control Act (AECA), 22 U.S.C. § 2751 et seq., and the International Traffic in Arms Regulations (ITAR), 22 C.F.R. Parts 120-130. The Department of State and AV have reached this settlement following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.

The Department of State and AV have reached an agreement pursuant to ITAR § 128.11 to address alleged unauthorized exports of defense articles, including technical data; the failure to properly maintain records involving ITAR-controlled transactions; and violations of the provisos, terms, and conditions of export authorizations. The settlement demonstrates the Department’s role in strengthening U.S. industry by protecting U.S.-origin defense articles, including technical data from unauthorized exports. The settlement also highlights the importance of obtaining appropriate authorization from the Department for exporting controlled articles as well as maintaining proper records of such exports.

Under the terms of the twenty-four (24) month Consent Agreement, AV will pay a civil penalty of $1,000,000. The Department has agreed to suspend $500,000 of this amount on the condition that the funds have or will be used for Department-approved Consent Agreement remedial compliance measures. AV must also hire an outside Special Compliance Officer (SCO) for a term of one year and conduct an external audit to assess and improve its compliance program during the Consent Agreement term.

AV voluntarily disclosed to the Department the alleged AECA and ITAR violations, which are resolved under this settlement. AV also acknowledged the serious nature of the alleged violations, cooperated with the Department’s review, and instituted a number of compliance program improvements during the course of the Department’s review. For these reasons, the Department has determined that it is not appropriate to administratively debar AV at this time.

The Consent Agreement and related documents will be available for public inspection in the Public Reading Room of the Department of State and on Penalties and Oversights Agreements section of the Directorate of Defense Trade Controls’ website.

For additional information, please contact the Bureau of Political-Military Affairs’ Office of Congressional and Public Affairs at pm-cpa@state.gov.

Link:

State Department Press Release

Media Note
 

Office of the Spokesperson
Washington, DC
April 25, 2018

 

On April 25, 2018, the U.S. Department of State published a Federal Register notice of 168 persons and entities who have been statutorily debarred for convictions of violating, or conspiring to violate, the Arms Export Control Act (22 U.S.C. 2751, et seq.). This action, as required by section 127.7(b) of the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130), highlights the Department’s responsibility to protect U.S. defense articles, including technical data, and defense services from unauthorized exports and brokering. 

This notice is provided for purposes of making the public aware that these statutorily debarred persons are prohibited from participating directly or indirectly in activities regulated by the ITAR. This includes any brokering activities and any export from or temporary import into the United States of defense articles, related technical data, or defense services in any situation covered by the ITAR.

The Department’s Office of Defense Trade Controls Compliance in the Bureau of Political-Military Affairs, working in collaboration with the Department of Justice and the Federal Bureau of Investigation, and the Department of Homeland Security’s Office of Homeland Security Investigations, identified the persons subject to statutory debarment based on their criminal conviction by a court of the United States.

Under the terms of the statutory debarment, these individuals and entities are prohibited from participating directly or indirectly in any activities that are subject to the ITAR. Each individual and entity on this list will remain debarred until the Department approves an application request for reinstatement. All persons engaged in activities subject to the ITAR should be vigilant in their compliance with all export control regulations and ensure that their activities do not involve debarred persons. 

The notice of statutory debarment listing the names of the debarred individuals and entities was published in the Federal Register on April 25, 2018. A full list of all persons subject to statutory debarment is available on the website of the Directorate of Defense Trade Controls (DDTC).

For additional information, please contact the Bureau of Political-Military Affairs’ Office of Congressional and Public Affairs at pm-cpa@state.gov.

Link:

State Department Press Release

The Directorate of Defense Trade Controls (DDTC) notes that these changes (the US Munitions List, or USML, is part of ITAR, the International Traffic in Arms Regulations), affect a narrow range of goods that were already covered by the EAR (Export Administration Regulations). This Final Rule takes effect December 31st:

  • Effective December 31st, 2016, for articles subject previously to the EAR but now subject to the ITAR under this rule, any unshipped balance under a Department of Commerce authorization will be null and void.

  • Effective December 31st, 2016, the ITAR will regulate the reexport or retransfer of articles subject previously to the EAR but now subject to the ITAR under this rule.

Link:

Federal Register Notice