It isn’t very often that we get to tell you the government has made your life easier, but today is that day! Starting on August 1st, the Directorate of Defense Trade Controls (DDTC) issued two Open General Licenses (OGLs) as a pilot program. DDTC implemented the program in order to further its mission of ensuring that the munitions export control system continues to evolve to better advance U.S. national security and foreign policy objectives, in part by facilitating legitimate defense trade with partners and allies, while denying adversaries access to sensitive U.S. technology.
Much like the Open General Export Licenses (OGELs) popular in the United Kingdom, these two general licenses will give exporters authorization to reexport and retransfer unclassified defense articles to pre-approved parties in Australia, Canada, and the United Kingdom. This means that if your transaction meets the criteria for the OGL, you will not need to submit a license for the reexport or retransfer.
For now, the OGLs are for a limited time only– valid from August 1, 2022, through July 31, 2023 in order for DDTC to evaluate the effectiveness of this new program.
As with all license exemptions in the International Traffic in Arms Regulations (ITAR), there are specific requirements that must be met. Here is a run-down of those requirements:
- Specific Activities. These OGLs can only be used for reexports or retransfers to the governments of Australia, Canada, or the UK, Members of the Australian or UK Communities (§§ 126.16(d) and 126.17(d)), or to Canadian-registered persons (§ 126.5(b)).
- No exports. OGLs cannot be used for exports. They are for reexports and retransfers only, meaning the items must have already been approved for export via a license or other approval.
- Eligible Defense Articles Only. These general licenses are for unclassified defense articles. No items on the Missile Control Technology Regime (MTCR) or identified as Missile Technology (MT) on the United States Munitions List (USML) are allowed. Technical data is approved only for organizational-level, intermediate-level, or depot-level maintenance, repair, or storage of a defense article.
- Specific End Uses. Items must be for the end use or operation on behalf of the Government of Australia, Government of Canada, or the Government of the United Kingdom.
- Specific Territories. Retransfers and reexports must take place entirely within the physical territory of Australia, Canada, or the UK. No pit stops allowed under these OGLs.
- Originally Approved. As mentioned in the first point, in order to use an OGL, the items must have already been approved for export by DDTC (this includes licenses and agreements). Additionally, items exported via Foreign Military Sales are ineligible for the general licenses.
- Approved Purposes for Congressional Notifications. If the item is considered to be Major Defense Equipment ($25,000,000 for any defense article and $100,000,000 for related training or defense services), the items are only approved to be transferred for maintenance, repair, or overhaul defense services, including the repair of defense articles used in furnishing such services, if the retransfer will not result in any increase in the military capability of the defense articles and services to be maintained, repaired, or overhauled. Additionally, the items are permitted for temporary retransfer for the purpose of receiving maintenance, repair, or overhaul.
- Recordkeeping and Compliance. As with all licenses, it is critical that all records of the reexport/retransfer are maintained and available to DDTC upon request. Records must contain the OGL number as the license or other approval number. All requirements in § 123.9 (b) must also be followed.
While these general licenses will no doubt be a great tool for many exporters, it is important to ensure that all requirements are met and documented. Refer to DDTC’s fact sheet and FAQs for more information.
If you need assistance in determining if you are eligible for the OGLs, please contact Export Solutions for a free consultation.
Emmalie Armstrong is a Trade Compliance Consultant with Export Solutions – a firm specializing in U.S. import/export regulations.