The Directorate of Defense Trade Controls (DDTC), a regulatory agency part of the Department’s Bureau of Political-Military Affairs (PM), takes pride in its mission to ensure commercial exports of defense articles and defense services advance U.S. national security and foreign policy objectives.
In FY 2019, DDTC made significant strides in streamlining its export licensing processes to more effectively support America’s defense industry and its customers abroad. DDTC received over 36,200 applications for export licenses and approved $114.7 billion worth of Direct Commercial Sales, helping to support the over 1 million Americans who work in the defense industry.
DDTC continues to implement reforms to the International Traffic in Arms Regulations (ITAR) to further simplify and clarify the processes and procedures American companies must follow when undertaking Direct Commercial Sales. In 2019, these changes included broadening and providing a better explanation of the most used license exemption in the ITAR to help ensure that the U.S. Government can effectively field critical munitions in a timely and secure manner. Other revisions incentivize industry to better protect sensitive information and facilitate the use of state-of-the-art encryption technologies.
Over the course of 2020, DDTC will fully replace its legacy information technology systems with the new Defense Export Control and Compliance System (DECCS). DECCS allows users access to a number of DDTC applications — registration, licensing, advisory opinions, and commodity jurisdictions — through a single, online portal. A fully realized system will provide greatly increased security and improve user experiences through centralized access to the core business processes most used by industry and staff.
In 2019, DDTC’s licensing office also comprehensively rewrote its Agreements Guidelines, which provide suggested best practices for submitting various types of agreements—Technical Assistance, Warehouse and Distribution, and Manufacturing Agreements. The efforts will shorten the Guidelines’ overall length by half. Their readability and reference value will also be improved dramatically by consolidating definitions and standard language and eliminating inconsistencies and redundancies. The Guidelines’ final version will be released to the public in 2020.
Lastly, in 2019 and early 2020, DDTC’s compliance office concluded four consent agreements with industry representatives to resolve a multitude of violations concerning unauthorized exports and poor record-keeping, the violation of terms and conditions of export authorizations, and the improper furnishing of defense services. Total penalties amounted to $24.4 million, approximately half of which was applied to fund remediation efforts, so that these companies can train compliance officers on how to fully comply with the ITAR in future.
The United States remains the world leader in defense trade in terms of quality, transparency, and accountability, and DDTC’s diligent work in 2019 helped maintain this reputation.
About the author: Robert L. Hobart is an Intern in the Bureau of Political Military Affairs’ Office of Congressional and Public Affairs at the U.S. Department of State.