DDTC Issues Revised Guidelines for Preparing Agreements (Revision 2)

The Directorate of Defense Trade Controls has issued Revision 2 to its Guidelines for Preparing Agreements, which incorporates additional revisions to its previously published Guidelines (Revision 1A, published in April 2009).

(The agreements referred to in the guidelines are Technical Assistance Agreements (TAA), Manufacturing License Agreements (MLA), and Warehouse and Distribution Agreements (WDA).

DDTC states that its guidelines are intended to serve as an aid in applying the International Traffic in Arms Regulations (ITAR); provide clarity to Defense Trade Policy as it pertains to Agreements; and to establish a standard basis for submissions of agreements and related correspondence. DDTC notes that should changes to the regulations take place, the regulatory changes take precedent.)

Revision Adds Guidance on Certification Letters, “Minor Amendments”

DDTC’s Revision 2 to the Guidelines adds the following (partial list):

Certification letter guidance. Section 4.2, “Additional Guidance for Attached Certification Letter¹,” states that:

a. When required, certification letters may be submitted as a separate attachment or as part of the transmittal letter of the agreement or amendment to agreement.

b. “Signing for” the empowered official on certification letters is not authorized. It must be signed by the empowered official identified in the signature block.

c. Certification letters must be on Applicant Letterhead. When consultant firms or law firms are hired by applicants to draft requests, do not submit certification letters on consultant firm or law firm letterhead.

d. Certification letters must include a specific identifier that relates the certification letter to the submitted request. The applicant can use a common internal tracking number reference or include the Commodity Line of the request as a reference in the header of the certification letter.

e. For a sample format of a Certification Letter, See Appendix A, Tab 1.

“Minor amendments” guidance. Section 6.3, regarding amendments to TAAs and MLAs, and Section 8.3, regarding amendments to WDAs, “Minor Amendments or Changes Not Requiring DTCL Approval,” each state that:

a. In accordance with 22 CFR 124.1(d), the applicant can make “Minor Amendments” that do not require DTCL approval. These changes are limited to that which only alters delivery or performance schedules, or are minor administrative amendments which do not affect in any manner the duration or scope. In these cases, the applicant must submit a copy of these changes within 30 days of conclusion. If the changes are made prior to concluding (signing) the original agreement, then a separate submission is not required and the applicant can highlight or explain the changes in the cover letter provided with the copy of the concluded agreement.

b. The following changes can be made without DTCL approval as long as they in no way affect the scope of the agreement:

- Correct typos or minor mistakes in original submission.

- Correct address of a signatory (in the same country)

- Correct the official name of the foreign signatory (only minor name change)

- Makes minor language changes needed before parties will sign

- Removes a signatory from the agreement (see Section 16.1.d. of the Guidelines).

For foreign licensee name changes, if an ownership change or other transfer has taken place, an amendment must be submitted in accordance with the ITAR at 22 CFR 124.1(c) and receive approval by DDTC. For additional information on minor name changes of a foreign signatory, see the general correspondence for amendment of existing ITAR authorizations due to foreign entity name change, available at http://www.pmddtc.state.gov/licensing/guidelines_instructions.html.

(DDTC’s Revision 2 also adds/revises certain steps to be used to submit new agreements, re-baseline agreements/amendments, and proviso reconsiderations; deletes the Appendix C “Merger and Acquisition” flow chart; and makes various minor language amendments. See Guidelines for complete revisions.)

¹All requests for agreements or amendments thereto under 22 CFR Part 124, and all requests for written authorizations (to include proviso reconsiderations) must include a letter signed by a responsible official empowered by the applicant addressed to DDTC.

(See ITT's Online Archives or 02/05/09 and 04/09/09 news, (Ref: 09020535) and (Ref: 09040935), for BP summaries of Revisions 1 and 1A, respectively.)

DDTC Guidelines Revision 2 (dated 04/01/10) available at http://www.pmddtc.state.gov/licensing/documents/agreement-ElectronicGuidelines.pdf