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Who should register with the Directorate of Defense Trade Controls?

Posted by Tyson Geib

5/26/17 10:06 AM

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Whether you are a large multinational corporation or a small family owned business, all manufacturers, exporters, and brokers of defense articles, related technical data, and defense services (as defined on the United States Munitions List, Part 121 of the ITAR) are required to register with the Directorate of Defense Trade Controls (DDTC).

Don't forget, registering with DDTC does not automatically provide for export rights or privileges, but it is a precondition for the issuance of any license or other approval for export.

Manufacturers/Exporters are defined in ITAR §122.1, as any person who engages in the United States in the business of either manufacturing or exporting or temporarily importing defense articles or furnishing defense services. Manufacturers who do not engage in exporting must nevertheless register. U.S. distributors and other U.S. persons exporting parts and components and other defense articles and services outside of the United States are considered to be exporters.

Brokers are defined in ITAR §129.3, as any person identified under ITAR §129.2(a) who engages in brokering activities identified under ITAR §129.2(b). There is an exemption to registration under ITAR §129.3(b). Registration is generally a precondition for the issuance of approval for brokering activities required under Part 129 or the use of exemptions.

A registration package should include the following supporting documentation:

  1. Documentation issued or endorsed by a government authority enabling the registrant to engage in business in the U.S. (e.g., articles of incorporation, articles of organization, partnership agreement) or in a foreign country.

  2. Electronic payment confirmation (typically, a scanned copy of the confirmation from your bank).

  3. Organizational chart, if applicable, showing the relationship among the company's parent, subsidiaries, affiliates, or multiple divisions or facilities.

  4. The "Other Amplifying Data" box on the form DS-2032 should only be selected if you have supporting documents that are not specifically prompted by Electronic Form Submission (e.g., a Federal Firearms License).

The fee for registration and renewal is set into three tiers.

The first tier is a set fee of $2,250 per year. This applies to new registrants and to renewing registrants for whom the Department did not review, adjudicate, or issue a license or other authorization during the twelve month period ending 90 days prior to the expiration of the current registration.

The second tier is a set fee of $2,750 for registrants renewing their registrations who have submitted and had final action taken on ten or fewer licenses or other authorization during a twelve month period ending 90 days prior to the expiration of their current registration.

The third tier is a calculated fee for registrants who have submitted and had final action taken on more than ten licenses or other authorizations during the twelve month period ending 90 days prior to the expiration of the current registration. For these registrants, the fee calculation is $2,750 plus $250 times the total number of applications over ten. There is a provision for a reduced fee if the fee calculated above is greater than three percent of the total value of all of their applications. In such cases, the fee will be three percent of the total value of all applications or $2,750, whichever is greater.

Authorizations used to calculate the fee include DSP-5, -6, -73, -74, -61, -62, -85s, -53s, -119s, and agreements and their amendments. Cases returned without action and denied cases are not included in the fee calculation Submissions required under 22 CFR 123 through 126 which do not require response from the Department (e.g., sales reports) are not counted when determining the registration fee, nor are disclosures or requests for a commodity jurisdiction determination.   

The registration requirements can be lengthy, confusing, and are subject to change.

If you have any questions or need assistance, don't hesitate to reach out. We have a team of ITAR experts are here to guide you through the process. 

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Written by Tyson Geib

Tyson joined the Tradewin team in November of 2015. Prior to that, Tyson spent 13 years in the aerospace and defense industries overseeing trade compliance at US and international locations. He has proven experience in classification, licensing, auditing, training, and the drafting and execution of export compliance policies, procedures, and screening processes. He has served as an Export Compliance Officer and Empowered Official, and had responsibility for overseas locations where he audited compliance processes, provided training to executive leadership, drafted multi-million dollar agreements and provided support to management during a Consent Agreement.