The U.S. State Department has proposed revisions to multiple sections of the International Traffic in Arms Regulations (ITAR) to remove consideration of citizenships previously held by a foreign person. The State Department’s continued refinement of these rules is a welcome development that may help companies better address conflicting laws in other countries while maintaining ITAR compliance.
Historically, when making export authorization determinations, the ITAR required consideration of both a foreign person’s current and past citizenships, as well as their country of birth. Compliance with these ITAR requirements put companies at risk of violating anti-discrimination and human rights laws in Australia, Canada, and the European Union, among other places. For example, a European company that manufactures ITAR-controlled products may be subject to EU or local human rights laws that prohibit the company from asking employees for nationality or citizenship information. Over the past 15 years, the State Department has made several changes to shift the ITAR requirements to focus on a foreign person’s current connections or “substantive contacts” in other countries, rather than their past connections, in an effort to ease these tensions and also to harmonize the ITAR with the Export Administration Regulations (EAR).
The proposed ITAR revisions reflect the State Department’s experience and assessment that consideration of a foreign person’s prior citizenship or permanent residency is unnecessary. While the current regulations state that an export to a foreign person is an export to “all countries in which the foreign person has held or holds citizenship,” the revised regulations would consider only the current countries in which the foreign person holds citizenship or permanent residency.
These revisions would not fully harmonize the ITAR with the EAR. Under the EAR, only a foreign person’s last country of citizenship or permanent residency is considered. So, if a foreign person is a citizen of Haiti who later became a citizen of Canada, they would be considered Canadian under the EAR, but Canadian and Haitian under the ITAR. Under the new proposed rule, that foreign person would still be considered both Canadian and Haitian under the ITAR unless they renounced their Haitian citizenship. If their Haitian citizenship is renounced, they would be only Canadian under the ITAR as well as the EAR. These revisions would be a significant step toward harmonization and would reduce the administrative burden for companies that are subject to ITAR requirements.
The State Department is accepting comments on the proposed rule until April 3, 2022. Comments can be submitted via email to DDTCPublicComments@state.gov with the subject line: “Regulatory Change: ITAR Sections 120, 126 and 127” or at www.regulations.gov (Docket DOS-2021-0031). Comments either supporting the rule or providing constructive feedback are useful and generally appreciated by the agency.
For more insight into compliance with the ITAR or other export regulations, please contact Josephine Aiello LeBeau, Jahna Hartwig, Anne Seymour, or another member of Wilson Sonsini’s national security team.