DDTC Issues Proposed Changes to Definition of "Defense Services" in the ITAR

On May 24, 2013 the State Department's Directorate of Defense Trade Controls (DDTC) published a proposed rule that would amend U.S. Munitions List Category XV which includes spacecraft systems and related articles. 

Also included in the proposed USML Category XV rule is a proposed new definition of the phrase "defense services" in section 120.9 of the International Traffic in Arms Regulations (ITAR).

This is the second proposed change to the definition of "defense services" in the ITAR. The first proposed revision published in April 2011 generated nearly 40 comments seeking additional changes to the definition.

Based on the public comments received, DDTC made a number of changes to the proposed definition of "defense services", including:

• distinguishing between the concepts of "integration" and "installation";
• adding the term ‘‘tactical,’’ to differentiate training in such employment from the type that is not to be within the definition of a defense service (training in basic operation);
• specifying that the furnishing of assistance for certain spacecraft related activities, including launch failure analysis, is a defense service.
• Modifying ITAR section 124.1(a), which describes the approval requirements of manufacturing license agreements and technical assistance agreements, to remove the requirement of Department approval for the provision of a defense service using public domain data or data otherwise exempt from ITAR licensing requirements.

Public comments on the current proposed definition of "defense services" must be submitted to DDTC by July 8, 2013.