Defense Trade News, Volume 8, No. 1

Question and Answer Forum

Now You Know ....

The office of Defense Trade Controls will answer
selected questions regarding export policies or
procedures in the Defense Trade News and Export
Policy Bulletin. Please make your question(s) as
concise and focussed as possible. Simply print or
type your question(s) in the space below and mail
it to DTC (Attn: Question and Answer Forum) or
fax it to (703) 875-5663. We look forward to hearing
from you.

Question(s):



ee
Defense Services in Support of FMS Needs Agreements

A Case Example

The Office of Defense Trade Controls (PM/
DTC) has frequently been asked the question:
“Do I need to do an agreement to support
FMS cases?” Maybe this is best addressed via
an example.

You've received a contract from the Depart-
ment of Defense (Foreign Military Sales) to
train a foreign armed service in intermediate
and depot level maintenance. The DOD con-
tracting officer then directs you to perform
this contractual obligation. Do you need an
export license? If so, what kind? Are there
any exemptions or exceptions you can claim
or request?

Yes, you do need export authorization from
the Department of State and the proper one is
a technical assistance agreement. You are
performing a defense service as defined in 22
CFR 120.9: “(1) The furnishing of assistance
(including training) to foreign persons... in the
... testing, repair, maintenance... of defense
articles; or (2) the furnishing to foreign per-
sons of any technical data controlled under
this subchapter...” Per 22 CFR 124.1(a) “the
approval of the Office of Defense Trade Con-
trols must be obtained before the services
described in § 120.9... may be furnished. In
order to obtain such approval, the US person
must submit a proposed agreement to the
Office of Defense Trade Controls.”

Applicants have generally requested to pre-
clude the requirement for an agreement by
claiming the exemption under 22 CFR 126.6
regarding FMS cases. This exemption is ap-
plicable only if the following three conditions
are met: (1) there is a valid DOD Letter of
Offer and Acceptance (LOA) (DD Form 1513);
(2) a DSP-94 has been properly executed, or
LOA for classified shipments; and (3) the ex-
port is made by the relevant foreign mission
or authorized, registered freight forwarder.
In the case of a defense service, you cannot

meet condition (2), a properly executed DSP-
94 and therefore 22 CFR 126.6 may not be
claimed.

The requirement for an agreement parallels
the requirement for A DSP-94. For all FMS
cases, if the export is being performed com-
mercially, export authorization, in addition to
the approved LOA is required. For hardware
this is the DSP-94. For defense services the
authorization is the agreement.

In summary, the answer is pretty straignt
forward: If you’re providing a defense ser-
vice for a foreign customer (either govern-
ment, company, or individual), even when
directed by the Department of Defense, you'll
need export authorization, and in this case
that’s an agreement. #

Page 14

Defense Trade News, Volume 8, Number 1, March 1997



Sign Up for
State Department Export Licensing Training

The State Department's Office of Defense Trade Controls (DTC) can design a seminar on export
licensing policies and procedures with your specific needs in mind. We hold our seminars at our
office in Arlington, Virginia, minutes from the District of Columbia.

We normally hold four half-day seminars per year, combining participants from different firms,
with attendance limited to 30, We encourage small companies to apply. To sign up, please mail
this application to DTC (Attn: Training Seminars Coordinator) or fax it to (703) 875-6647.

TO: Training Seminars Coordinator, Office of Defense Trade Controls
FAX: (703) 875-6647

FROM:
(Company Name)

We would like to send attendees to a seminar including training on these topics:

Completion of Applications Registration Requirements
Country Licensing Policies Congressional Requirements
Proscribed Country Requirements Agreement Requirements

U.S. Customs EXODUS Program Commodity Jurisdiction Requests

Processing of Requests Licensing Foreign Nationals

Other subject areas we would like covered

Number wishing to attend:

Primary U.S. Munitions List categories of defense articles, services, and/or technical data with
which our firm deals: 1. 2. 3. 4.

Our attendees would/would not be interested in briefing DTC about our products and services.

DTC Registration Code
Address

City , State, ZIP
Point of Contact for Training
Phone ( ) Fax ( )



el

(bb) for carrying out any foreign assis-
tance or sales program authorized by
law and subject to the control of the
President by other means.

(IV) For purposes of this clause, the term
“foreign defense article or defense service”

includes any non-United States defense ar-
ticle or defense service of a nature described
on the United States Munitions List regard-
less of whether such article or service is of
United States origin or whether such article
or service contains United States compo-
nents. @

Defense Trade News, Volume 8, Number 1, March 1997

Page 5



Tape Edge Before Mailing

Question and Answer Forum
PM/DTC, SA-6, Room 200

Office of Defense Trade Controls
Bureau of Political-Military Affairs
U.S. Department of State
Washington, D.C. 20522-0602


DEFENSE TRADE NEWS BULK RAT
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OFFICIAL BUSINESS ~
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Log onto ELLIE
State’s Electronic License Entry System

The State Department's Office of Defense Trade Controls (DTC) now offers on-line
electronic license submission via ELLIE, the Ekctronic License Entry System. Since its
inception in late 1993, ELLIE has processed over 2000 applications. Having successfully
completed the pilot stage of the project, DTC has gradually increased the number of
companies participating in the ELLIE program to over 300.

ELLIE is a free service. To use ELLIE, you must have access to DTC’s Remote On-line
Bulletin Board (ROBB). Access to ROBB and ELLIE requires a PC, a modem, and commu-
nications software, which your firm may already possess.

To sign up for ELLIE, please mail this application to DTC (Attn: Computer Support
Staff) or fax it to (703) 875-5663.

TO: Director, Computer Support Staff, Office of Defense Trade Controls
FAX: (703) 875-5663

FROM:
(Company Name)

We would like to sign up to submit license applications electronically via ELLIE.
We do/do not already use ROBB.
Our firm submits approximately, license applications to DTC per year.

DTC Registration Code
Address

City , State, ZIP
Point of Contact for ELLIE

Phone ( } Fax ( )



Technical Working Group

This Working Group has been deactivated
and its members have been reassigned be-
cause it has been concluded that the group’s
technical expertise is best suited for support
of policy or complex regulatory issues, such
as the work that has been accomplished un-
der the Commercial Communications Satellite
Task Force.

Policy Working Group

The group’s efforts involved examination of
Defense Export Loan Guarantees, a Foreign
Availability Data Base and International
Arms Cooperation.

Guest Speakers

Assistant Secretary of the Air Force for Acqui-
sition Arthur L. Money addressed the role of
international sales in the USAF acquisition
strategy. He said it is important to export
more from the US because most military op-
erations today tend to be multi-national and it
is critical to have greater interoperability. Ex-
ports are also critical to allowing certain lines
to remain open so that USAF might tap into
them for replacements. Additionally, exports
make it less costly to procure equipment,
which is very important given the continuing
decrease in procurement funding. He con-
cluded that, as coalition warfare is the future
of warfare, armament cooperation is critical.

Navy Assistant Secretary John W. Douglass
addressed acquisition reform. He noted that,
today, the Navy has the lowest number of
ships since 1938, Based on these dwindling
numbers, and increasing demands being
placed on the Navy for peacekeeping and
other operations, the acquisition strategy
must include exports as a means of keeping
remaining US shipyards alive. The Navy can-
not depend on foreign yards for this critical
area. Tapping into the commercial industry
R&D, particularly for Command and Control
and electronics, is providing the necessary
leaps in technology.

Thomas Murtagh, Office of the Under Secre-
tary of Defense for International and Com-
mercial Programs, gave a briefing on the De-
fense Export Loan Guarantee (DELG) pro-
gram. Under implementing legislation, the
DELG is “owned” by Department of State but
administered by the Department of Defense,
and may apply to FMS and direct commercial
sales. The program is built on the Export-
Import Bank model. Only a limited number
of countries are eligible. Adding new coun-
tries beyond those currently on the list would
require new legislation.

Defense services are eligible for loan guaran-
tees although ExIm could not fund services in
the US.

There is no final DELG commitment to guar-
antee loans before the USG makes a decision,
through an export license or other authoriza-
tion, on an actual sale. Furthermore, Exlm
also requires a signed contract, not merely a
letter of intent.

Department of State participants in the
course of the day included Under Secretary
of State for Arms Control and International
Security Affairs Lynn Davis, Thomas E.
McNamara, Assistant Secretary for Political
Military Affairs, Dr. Martha Caldwell Harris,
PM Deputy Assistant Secretary for Export
Controls, and Michael C. Lemmon, PM
Deputy Assistant Secretary for Regional Secu-
rity. @

Page 18

Defense Trade News, Volume 8, Number 1, March 1997



ee

be taken by a reporter or by magnetic record-
ing, transcribed, and filed with the Adminis-
trative Law Judge. Respondent may examine
the transcript and may obtain a copy upon
payment of proper costs.

128.9 Proceedings before and report
of Administrative Law Judge

(a) The Administrative Law Judge may
conform any part of the proceedings before
him or her to the Federal Rules of Civil Proce-
dure. The record may be made available in
any other administrative or other proceeding
involving the same respondent.

(b) The Administrative Law Judge, after
considering the record, will prepare a written
report. The report will include findings of
fact, findings of law, a finding whether a law
or regulation has been violated, and the Ad-
ministrative Law Judge’s recommendations.
It shall be transmitted to the Assistant Secre-
tary for Political-Military Affairs, Department
of State.

§ 128.10 Disposition of proceedings

Where the evidence is not sufficient to sup-
port the charges, the Director, Office of De-
fense Trade Controls or the Administrative
Law Judge will dismiss the charges. Where
the Administrative Law Judge finds that a
violation has been committed, the Adminis-
trative Law Judge’s recommendation shall be
advisory only. The Assistant Secretary for
Political-Military Affairs will review the
record, consider the report of the
Administrtive Law Judge, and make an ap-
propriate disposition of the case. The Direc-
tor may issue an order debarring the respon-
dent from participating in the export of de-
fense articles or technical data or the furnish-
ing of defense services as provided in § 127.7
of this subchapter, impose a civil penalty as
provided in § 127.10 of this subchapter or take
such action as the Administrative Law Judge
deems appropriate. Any debarment order

will be effective for the period of time speci-
fied therein and may contain such additional
terms and conditions as are deemed appropri-
ate. A copy of the order together with a copy
of the Administrative Law Judge’s report will
be served upon the respondent.

§ 128.11 Consent agreements

(a) The Office of Defense Trade Controls
and the respondent may, by agreement, sub-
mit to the Administrative Law Judge a pro-
posal for the issuance of a consent order. The
Administrative Law Judge will review the
facts of the case and the proposal and may
conduct conferences with the parties and may
require the presentation of evidence in the
case. If the Administrative Law Judge does
not approve the proposal, the Administrative
Law Judge will notify the parties and the case
will proceed as though no consent proposal
had been made. If the proposal is approved,
the Administrative Law Judge will report the
facts of the case along with recommendations
to the Assistant Secretary for Political-Mili-
tary Affairs. If the Assistant Secretary for
Political-Military Affairs does not approve the
proposal, the case will proceed as though no
consent proposal had been made. If the As-
sistant Secretary for Political-Military Affairs
approves the proposal, an appropriate order
may be issued.

(b) Cases may also be settled prior to ser-
vice of a charging letter. In such an event, a
proposed charging letter shall be prepared,
and a consent agreement and order shall be
submitted for the approval and signature of
the Assistant Secretary for Political-Military
Affairs, and no action by the Administrative
Law Judge shall be required. Cases which are
settled may not be reopened or appealed.

§ 128.12 Rehearings

The Administrative Law Judge may grant a
rehearing or reopen a proceeding at any time
for the purpose of hearing any relevant and
material evidence which was not known or
obtainable at the time of the original hearing.
A report for rehearing or reopening must con-
tain a summary of such evidence, and must

Page 10

Detense Trade News, Volume 8, Number 1, March 1997



a

The Arms Export Control Act authorizes the
President to control the import and export of
defense articles and services in furtherance of
world peace and the security and foreign
policy of the United States. It authorizes the
Secretary of State to make decisions on
whether license application or other written
requests for approval shall be granted, or
whether exemptions may be used. It also
authorizes the Secretary of State to revoke,
suspend or amend licenses or other written
approvals whenever the Secretary deems
such action to be advisable. The administra-
tion of the Arms Export Control Act is a for-
eign affairs function encompassed within the
meaning of the military and foreign affairs
exclusion of the Administrative Procedure
Act and is thereby expressly exempt from
various provisions of that Act. Because the
exercising of the foreign affairs function, in-
cluding the decisions required to implement
the Arms Export Control Act, is highly discre-
tionary, it is excluded from review under the
Administrative Procedure Act.

§ 128.2 Administrative Law Judge

The Administrative Law Judge referred to in
this part is an Administrative Law Judge ap-
pointed by the Department of State or of the
Department of Commerce, as provided in 15
CFR 788.2. The Administrative Law Judge is
authorized to exercise the powers and per-
form the duties provided for in §§ 127.7,
127.8, and 128.3 through 128.16 of this
subchapter.

§ 128.3 Institution of Administrative
Proceedings

(a) Charging Letters. The Director, Office of
Defense Trade Controls, with the concurrence
of the Office of the Legal Adviser, Depart-
ment of State, may initiate proceedings to
impose debarment or civil penalties in accor-
dance with § 127.7 or § 127.10 of this
subchapter respectively.

Administrative proceedings shall be initiated
by means of a charging letter. The charging
letter will state the essential facts constituting
the alleged violation and refer to the regula-

tory or other provisions involved. It will give
notice to the respondent to answer the
charges within 30 days, as provided in

§ 128.5(a), and indicate that a failure to an-
swer will be taken as an admission of the
truth of the charges. It will inform the re-
spondent that he or she is entitled to an oral
hearing if a written demand for one is filed
with the answer or within seven (7) days after
service of the answer. The respondent will
also be informed that he or she may, if so de-
sired, be represented by counsel of his or her
choosing. Charging letters may be amended
from time to time, upon reasonable notice.

(b) Service. A charging letter is served upon
a respondent:

(1) If the respondent is a resident of the
United States, when it is mailed postage pre-
paid in a wrapper addressed to the respon-
dent at the person’s last known address; or
when left with the respondent or the agent or
employee of the respondent; or when left at
the respondent's dwelling with some person
of suitable age and discretion then residing
herein; or

(2) If the respondent is a non-resident of the
United States, when served upon the respon-
dent by any of the foregoing means. [f such
methods of service are not practicable or ap-
propriate, the charging letter may be tendered
for service on the respondent to an official of
the government of the country wherein the
respondent resides, provided that there is an
agreement or understanding between the
United States Government and the govern-
ment of the country wherein the respondent
resident permitting this action.

128.4 Default

(a) Failure to answer. If the respondent fails
to answer the charging letter, the respondent
may be held in default. The case shall then be
referred to the Administrative Law Judge for
consideration in a manner as the Administra-
tive Law Judge may consider appropriate.
Any order issued shall have the same effect as
an order issued following the disposition of
contested charges.

Defense Trade News, Volume 8, Number 1, March 1997

Page 7



RL

Amendments to the ITAR
Final Rules Published

Follows the text of ITAR changes
published in the Federal Register [Vol 61,
page 48830 (September 17, 1996)].

Summary

This rule amends the International Traffic in
Arms Regulations (ITAR) to correct a typo-
graphical error in the definition of “technical
data;” eliminate the requirement of reporting
subsequent exports of unclassified technical
data; and clarify authority and use the current
names of any office, bureau, or titles of offic-
ers that have changed since 1990.

Effective Date
September 17, 1996

Federal Register Public Notice No. 1179,
dated March 29, 1990, announced that the
Office of Munitions Control had changed its
name to the Office of Defense Trade Controls.
(55 FR 11714.) Part 128 of the International
Traffic in Arms Regulations (ITAR) is being
amended to reflect the current name of the
Office of Defense Trade Controls. Other
amendments reflect the name change of the
Bureau of Politico-Military Affairs to its cur-
rent name, the Bureau of Political-Military
Affairs. Additionally, references to the “Un-
der Secretary of State for Security Assistance,
Science and Technology” are being amended
to the current title of the “Under Secretary of
State for Arms Control and International Se-
curity Affairs.” Furthermore, cross references
to other sections in the ITAR are being
amended for accuracy. The delivery address
for the Office of Defense Trade Controls was
added to part 128.

These amendments involve a foreign affairs
function of the United States. They are ex-
empt from review under Executive Order
12866 but have been reviewed internally by
the Department to ensure consistency with
the purposes thereof. They are also not sub-

ject to 5 U.S.C. 553 and 554, and do not re-
quire analysis under the Regulatory Flexibil-
ity Act or the Unfunded Mandates Reform
Act.

PART 120 - PART AND DEFINITIONS
§ 120.10 Technical data

(a) * * * *
(1) Information, other than software as de-
fined in §12.10(4), which is required for the
design, development, production, manufac-
ture, assembly, operation, repair, testing,
maintenance or modification of defense ar-
ticles. This includes information in the form
of blueprints, drawings, photographs, plans,
instructions and documentation.

* * * * *

PART123 - LICENSES FOR THE
EXPORT OF DEFENSE ARTICLES

§ 123.22 Filing of export licenses and
Shipper’s Export Declarations with
District Directors of Customs

(d) A Shipper’s Export Declaration is not
required for exports of unclassified technical
data. Exporters shall notify the Office of De-
fense Trade Controls of the initial export of
the data by either returning the license after
self endorsement or by sending a letter to the
Office of Defense Trade Controls. The letter
shall provide the method, date, license num-
ber and airway bill number (if applicable) of
the shipment. The letter must be signed by an
empowered official of the company and pro-
vided to the Office of Defense Trade Controls
within thirty days of the initial export.

PART 128 - ADMINISTRATIVE
PROCEDURES

§128.1 Exclusion of functions from the
Administrative Procedure Act.

Page 6

__Defense Trade News, Volume 8, Number 1, March 1997



Personnel Updates

Out...

Dan Cook, a licensing officer departed DTC
for new responsibilities at IBM.

Allen Suchinsky, Branch Chief of Electronics
and Combat Systems retired from the State
Department in August 1996.

Completing his tour of duty, Defense Trade
Analyst, LDCR Glenn E. Smith retired from
the Navy. He has assumed new responsibili-
ties in private industry.

Wendy Payne, Compliance Operations Spe-
cialist responsible for registration, departed
DTC for new responsibilities in the Bureau of
Administration.

Nora (Terry) Hunter, licensing officer retired
from the State Department in December 1996
after completing 28 years of government ser-
vice.

In...

Monique Houck joined DTC in July 1996 as a
Munitions Control Specialist. Monique has a
Political Science degree from Adelphi Univer-
sity in New York, and a Juris Doctor degree
from American University, Washington Col-
lege of Law in Washington, D.C.

Patricia R. Scott is a new Munitions Control
Specialist with DTC. Pat comes to DTC from
an assignment in the Nuclear Risk Reduction
Center where she assisted in multilateral and
bilateral communications in support of sev-
eral treaties.

Tammy Buttner joined DTC as a Compliance
Specialist. Tammy’s previous assignment
was in the Office of the Legal Advisor.

Ruth Jackson assumed new responsibilities
as a Munitions Control Specialist. She previ-
ously held a Compliance Specialist position in
DTC’s Compliance Enforcement Branch.

Defense Trade News, Volume 8, Number 1, March 1997

Page 19



attendance of witnesses and the production of
books, records, and other documentary or
physical evidence determined by the Admin-
istrative Law Judge to be relevant and mate-
rial to the proceedings, reasonable in scope,
and not unduly burdensome.

(d) Enforcement of discovery rights. If the
Office of Defense Trade Controls fails to pro-
vide the respondent with information in its
possession which is not otherwise available
and which is necessary to the respondent’s
defense, the Administrative Law Judge may
dismiss the charges on her or his own motion
or on a motion of the respondent. If the re-
spondent fails to respond with reasonable
diligence to the requests for discovery by the
Office of Defense Trade Controls or the Ad-
ministrative Law Judge, on her or his own
motion or motion of the Office of Defense
Trade Controls, and upon such notice to the
respondent as the Administrative Law Judge
may direct, may strike respondent’s answer
and declare the respondent in default, or
make any other ruling which the Administra-
tive Law Judge deems necessary and just un-
der the circumstances. If a third party fails to
respond to the request for information, the
Administrative Law Judge shall consider
whether the evidence sought is necessary to a
fair hearing, and if it is so necessary that a fair
hearing may not be held without it, the Ad-
ministrative Law Judge shall dismiss the
charges.

§ 128.7 Prehearing conference

(a)(1) The Administrative Law Judge may,
upon his own motion or upon motion of any
party, request the parties or their counsel to a
prehearing conference to consider:

(i) Simplification of issues;

(ii) The necessity of desirability of amend-
ments to pleadings;

(iii) Obtaining stipulations of fact and of
documents to avoid unnecessary proof; or

(iv) Such other matter as may expedite the
disposition of the proceeding.

(2) The Administrative Law Judge will pre-
pare a summary of the action agreed will in-
corporate therein any written stipulatons or
agreements made by the parties.

(3) The conference proceedings may be re-
corded magnetically or taken by a reporter
and transcribed, and filed with the Adminis-
trative Law Judge.

(b) Ifa conference is impracticable, the Ad-
ministrative Law Judge may request the par-
ties to correspond with the person to achieve
the purposes of a conference. The Adminis-
trative Law Judge shall prepare a summary of
action taken as in the case of a conference.

128.8 Hearings

(a) A respondent who had not filed a timely
written answer is not entitled to a hearing,
and the case may be considered by the Ad-
ministrative Law Judge as provided in §
128.4(a). If any answer is filed, but no oral
hearing demanded, the Administrative Law
Judge may proceed to consider the case upon
the written pleadings and evidence available.
The Administrative Law Judge may provide
for the making of the record in such manner
as the Administrative Law Judge deems ap-
propriate. If respondent answers and de-
mands an oral hearing, the Administrative
Law Judge, upon due notice, shall set the case
for hearing, unless a respondent has raised in
his answer no issues of material fact to be
determined. If respondent fails to appear at a
scheduled hearing, the hearing nevertheless
may proceed in respondent's absence. The
respondent's failure to appear will not affect
the validity of the hearing or any proceedings
or action thereafter.

(b) The Administrative Law Judge may
administer oaths and affirmations. Respon-
dent may be represented by counsel. Unless
otherwise agreed by the parties and the Ad-
ministrative Law Judge the proceeding will

Defense Trade News, Volume 8, Number 1, March 1997

Page 9



Tape Edge Before Mailing

Training Seminars

PM/DTC, SA-6, Room 200

Office of Defense Trade Controls
Bureau of Political-Military Affairs
U.S. Department of State
Washington, D.C. 20522-0602


United States Department of State ° Bureau of Political-Military Affairs

Defense Trade News

and Export Policy Bulletin

Volume 8, Number 1 s Washington, 0.C. . : March, 1997
Policy

Regulation of Brokering Activities 4

New Legislation Requirements

Amendments to the ITAR 6

Final Rules Published

REALIST IE EE EEE EEE ITT ES SSS IEEE SCTE,

Operations
ITAR Distribution ~~ 13
Where It Can be Found
So You Want to Export to Pakistan 13
Assurance of Timely Processing
Defense Services in Support of FMS Needs Agreements 14
A Case Example
Identification of Submitted Documents 15
How Industry Can Help
Pick-Up of Completed Export Authorizations 15

Check ROBB First
EE EEE EC EE EES EE ESE ES EEE SSS EI SO

Departments
Defense Trade Advisory Group Developments 16
Personnel Updates 20
Questions for the Forum 21

Feedback, ELLIE & Training Forms 23

CATCH DEFENSE
TRADE NEWS
ONLINE

Visitunhttp://www.pmdtc.org
ontheWorldWideWeb



of the debarment or suspension period, sub-
ject to the conditions stated therein. The Di-
rector, Office of Defense Trade Controls, may
apply without notice to any person to be af-
fected thereby, to the Administrative Law
Judge for in order revoking probation when it
appears that the conditions of the probation
have been breached. The facts in support of
the application will be presented to the Ad-
ministrative Law Judge, who will report
thereon and make a recommendation to the
Assistant Secretary for Political-Military Af-
fairs. The latter will make a determination
whether to revoke probation and will issue an
appropriate order.

(b) Hearings--(1) Objections upon notice.
Any person affected by an application upon
notice to revoke probation, within the time
specified in the notice, may file objections
with the Administrative Law Judge.

(2) Objections to order without notice. Any
person adversely affected by an order revok-
ing probation, without notice may request
that the order be set aside by filing his objec-
tions thereto with the Administrative Law
Judge. The request will not stay the effective
date of the order or revocation.

(3) Requirements for filing objections. Objec-
tions filed with the Administrative Law Judge
must be submitted in writing and in dupli-
cate. A copy must be simultaneously submit-
ted to the Office of Defense Trade Controls.
Denials and admissions, as well as any miti-
gating circumstances, which the person af-
fected intends to present must be set forth in
or accompany the letter of objection and must
be supported by evidence. A request for an
oral hearing may be made at the time of filing
objections.

(4) Determination. The application and ob-
jections thereto will be referred to the Admin-
istrative Law Judge. An oral hearing if re-
quested, will be onducted at an early conve-
nient date, unless the objections filed raise no
issues of material facto to be determined. The
Administrative Law Judge will report the
facts and make a recommendation to the As-
sistant Secretary for Political-Military Affairs,

who will determine whether the application
should be granted or denied and will issue an
appropriate order. A copy of the order and of
the Administrative Law Judge’s report will be
furnished to any person affected thereby.

(5) Effect of revocation on other actions. The
revocation of a probationary period will not
preclude any other action concerning a fur-
ther violation, even where revocation is based
on the further violation.

§ 128.16 Extension of time

The Administrative Law Judge, for good
cause shown, may extend the time within
which to prepare and submit an answer to a
charging letter or to perform any other act
required by this part. #

For Further Information Contract:

Philips S. Rhoads, Chief, Compliance and
Enforcement Branch, Office of Defense Con-
trols, Bureau of Political-Military Affairs,
Department of State (703/875-6644).

Page 12

__Defense Trade News, Volume 8, Number 1, March 1997



SE

explain the reasons why it could not have
been presented at the original hearing. The
Administrative Law Judge will inform the
parties of any further hearing, and will con-
duct such hearing and submit a report and
recommendations in the same manner as pro-
vided for the original proceeding (Described
in § 128.10).

§ 128.13 Appeals

(a) Filing of appeals. An appeal must be in
writing, and be addressed to and filed with
the Under Secretary of State for Arms Control
and International Security Affairs, Depart-
ment of State, Washington, DC 20520. An
appeal from a final order denying export
privileges or imposing civil penalties must be
filed within 30 days after receipt of a copy of
the order. If the Under Secretary cannot for
any reason act on the appeal, he or she may
designate another Department of State official
to receive and act on the appeal.

* * * * *

(c) Matters considered on appeal. An appeal
will be considered upon the basis of the
assembled record. This record consists of (but
is not limited to) the charging letter, the
respondent's answer, the transcript or mag-
netic recording of the hearing before the
Administrative Law Judge, the report of the
Administrative Law Judge, the order of the
Assistant Secretary for Political-Military
Affairs, and any other relevant documents
involved in the proceedings before the Ad-
ministrative Law Judge. The Under Secretary
of State for Arms control and International
Security Affairs may direct a rehearing and
reopening before the Administrative Law
Judge if he or she finds that the record is
insufficient or that new evidence is relevant
and material to the issues and was not known
and was not available to the respondent at the
time of the original hearings.

* * * * *

(e) Preparation of appeals. -- (1) General Re-
quirements. An appeal shall be in letter form.
The appeal and accompanying material
should be filed in duplicate, unless otherwise
indicated, and a copy simultaneously mailed
to the Director, Office of Defense Trade Con-
trols, SA-6, Room 200, Department of State,
Washington, DC 20522-0620 or delivered to
the 21st street entrance of the Department of
State, 2201 C Street, NW., Washington, DC
addressed to Director, Office of Defense
Trade Controls, SA-6, Room 200, Department
of State, Washington, DC 20522-0602.

(2) Oral presentation. The Under Secretary
of State for Arms Control and International
Security Affairs may grant the appellant an
opportunity for oral agument and will set the
time and place for oral argument and will
notify the parties, ordinarily at least 10 days
before the date set.

(f) Decisions. Ail appeals will be considered
and decided within a reasonable time after
they are filed. An appeal may be granted or
denied in whole or in part, or dismissed at the
request of the appellant. The decision of the
Under Secretary of State for Arms Control
and International Security Affairs will be fi-
nal.

§ 128.14 Confidentiality of proceedings

Proceedings under this part are confidential.
The documents referred to in § 128.17 are not,
however, deemed to be confidential. Reports
of the Administrative Law Judge and copies
of transcripts or recordings of hearings will be
available to parties and, to the extent of their
own testimony, to witnesses. All records are
available to any U.S. Government agency
showing a proper interest therein.

§ 128.15 Orders containing
probationary periods

(a) Revocation of probationary periods. A
debarment or interim suspension order may
set a probationary period during which the
order may be held in abeyance for all or part

Defense Trade News, Volume 8, Number 1, March 1997

_ Page tt



LL SR SS

(b) Petition to set aside defaults. Upon show-
ing good cause, any respondent against
whom a default order has been issued may
apply to set aside the defult and vacate the
order entered thereon. The petition shall be
submitted to duplicate to the Assistant Secre-
tary for Political-Military Affairs, U.S. Depart-
ment of State, 2201 C Street, NW., Washing-
ton, DC 20520. The Director will refer the
petition to the Administrative Law Judge for
consideration and a recommendation. The
Administrative Law Judge will consider the
application and may order a hearing and re-
quire the respondent to submit further evi-
dence in support of his or her petition. The
filing of a petition to set aside a default does
not in any manner affect an order entered
upon default and such order continues in full
force and effect unless a further order is made
modifying or terminating it.

§ 128.5 Answer and demand for oral
hearing

* * * *

(b) Contents of answer. An answer must be
responsive to the charging letter. It must
fully set forth the nature of the respondent’s
defense or defenses. In the answer, the re-
spondent must admit or deny specifically
each separate allegation of the charging letter,
unless the respondent is without knowledge,
in which case the respondent's answer shall
so state and the statement shall operate as
denial. Failure to deny or controvert any par-
ticular allegation will be deemed an admis-
sion thereof. The answer may set forth such
additional or new matter as the respondent
believes support a defense or claim of mitiga-
tion. Any defense or partial defense not spe-
cifically set forth in an answer shall be
deemed waived. Evidence offered thereon by
the respondent at a hearing may be refused
except upon good cause being shown. If the
respondent does not demand an oral hearing,
he or she shall transmit, within seven (7) days
after the service of his or her answer, original
or photocopies of all correspondence, papers,
records, affidavits, and other documentary or
written evidence having any bearing upon or
connection with the matters in issue. If any

such materials are in language other than
English, translations into English shall be sub-
mitted at the same time.

(c) Submission of answer. The answer, writ-
ten demand for oral hearing (if any) and sup-
porting evidence required by § 128.5(b) shall
be in duplicate and mailed or delivered to the
Office of Administrative Law Judge, United
States Department of Commerce, Room H-
6716, 14th Street and Constitution Avenue,
NW., Washington, DC 20230-0602.

§ 128.6 Discovery

(a) Discovery by the respondent. The Tespon-
dent, through the Administrative Law Judge,
may request from the Office of Defense Trade
Controls any relevant information, not privi-
leged, that may be necessary or helpful in
preparing a defense. The Office of Defense
Trade Controls may provide any relevant
information, not privileged, that may be nec-
essary or helpful in preparing a defense. The
Office of Defense Trade Controls may supply
summaries in place or original documents
and may withhold information from discov-
ery if the interests of national security or for-
eign policy so require, or if necessary to com-
ply with any statute, executive order or regu-
lation requiring that the information may not
be disclosed. The respondent may request the
Administrative Law Judge to request any
relevant information, books, records, or other
evidence, from any other person or govern-
ment agency so long as the request is reason-
able in scope and not unduly burdensome.

(b) Discovery by the Office of Defense Trade
Controls. The Office of Defense Trade Con-
trols or the Administrative Law Judge may
request form the respondent admissions of
facts, answers to interrogatories, the produc-
tion of books, records, or other relevent evi-
dence, so long as the request is relevant and
material, reasonable in scope, and not unduly
burdensome.

(c) Subpoenas. At the request of any party,
the Administrative Law Judge may issue sub-
poenas, returnable before him requiring the

Page 8

Defense Trade News, Volume 8, Number 1, March 1997



Defense Trade News, Volume 8, No1

Feedback

Please circle or fill in your responses, add any
comments, and mail to DTC (Attn: DTN
Feedback) or fax to (703) 875-6647.

1. Your organization is a...

. Manufacturer

. Exporter

. Consulting or law firm

. Freight Forwarder

U.S. Embassy or Consulate

U.S. Customs element

U.S. DOD/ Military element

. Other U.S. Government element

. Foreign government element

10. Other (please explain in Comments)

SomNagnpone

2. How many people will read this issue?

1. 1 person

2. 2-5 people

3. 6-10 people
4, 11+ people

3-15. Please rate the usefulness of each article
ona scale of 1 (worst) to 5 (best). Rate as "0"
any articles you did not read.

16-28. Rate readability (style and physical
presentation) on a scale of 1 (worst) to 5
(best); rate as “0” articles you did not read.

29-31. Please circle the numbers of the three
topics you would most like to see covered.

1. Defense trade policy

2. Non-defense trade policy

3. Country-specific trade issues
4. Trade legislation

5. Licensing procedures

6. Regulatory and legal issues

7. Licensing case studies

8. Compliance case studies

9. Other (please explain in Comments)

Comments:

We welcome lengthier comments,
suggestions, and criticism.


eS
POLICY

Regulation of Brokering Activities

New Legislation Requirements

The Congress recently passed legislation re-
quiring the registration and licensing of
brokering activities relating to commercial
munitions sales, as conducted by U.S. persons
and foreign persons located in the U.S.
Regulations to implement the law are being
formulated. Publication of the regulations in
the Federal Register will amend the Interna-
tional Traffic in Arms Regulations (ITAR)
accordingly.

The new law amends Section 38 (1) (A) of the
Arms Export Control Act (22 U.S.C. 2778 (b)
(1) (A) to read:

(i) As prescribed in regulations issued un-
der this section, every person (other than an
officer or employee of the United States
Government acting in an official capacity)
who engages in the business of manufactur-
ing exporting, or importing any defense ar-
ticles or defense services designated by the
President under subsection (a) (1) shall reg-
ister with the United States Government
agency charged with the administration of
this section, and shall pay a registration fee
which shall be prescribed in such regula-
tions. Such regulations shall prohibit the
return to the United States for sale in the
United States (other than for the Armed
Forces of the United States and its allies or
for any State for local law enforcement
agency) of any military firearms or ammuni-
tion of United State manufacture furnished
to foreign governments by the United States
under this Act or any other foreign assis-
tance or sales program of the United States,
whether or not enhanced in value or im-

proved in condition in a foreign country.
This prohibition shall not extend to similar
firearms that have been so substantially
transformed as to become, in effect, articles
of foreign manufacture.

(ii) ) As prescribed in regulations under
this section, every person (other than an
officer or employee of the United States
Government acting in official capacity) who
engages in the business of brokering activi-
ties with respect to the manufacture, export,
import, or transfer of any defense article or
defense service designated by the President
under subsection (a) (1), orin the business of
brokering activitieswithrespecttothemanu-
facture, export, import, or transfer of any
foreign defense article or defense service (as
definedinsubclause(IV)), shall register with
the United States Government agency
charged with the administration of this sec-
tion, and shall pay a registration fee which
shall be prescribed by such regulations.

(II) Such brokering activities shall include
the financing, transportation, freight for-
warding, or taking of any other action that
facilitates the manufacture, export, or im-
port of a defense article or defense service.

(III) No person may engage in the business
of brokering activitiesdescribedinsubclause
(I) without a license, issued in accordance
with this Act, except that no license shall be
required for such activities undertaken by or
for an agency of the United States Govern-
ment --

(aa) for use by an agency of the United
States Government; or

Page 4

_Detense Trade News, Volume 8, Number 1, March 1997



Identification of Submitted Documents

How Industry Can Help

DTCis attempting to streamline its handling
of documents and, in the process, expedite
responses to requests and inquiries made by
industry. Part of this effort involves centraliz-
ing the initial processing of many types of
documents received by DTC. Therefore, we
ask that you follow the following guidelines:

-- Unless otherwise directed by DTC person-
nel or the ITAR, most correspondence will
continue to be addressed to the DTC Director
(William J. Lowell).

-- License applications are generally easily
identifiable. Please, however, do not include
in the same submission other correspondence
or documents not directly related to the appli-
cations.

-- If the license application or request for ap-
proval requires a transaction exception (e.g.
when a party to the transaction is subject to a
Department of State policy of denial), please
ensure a transmittal letter clearly states this.

-- Other documents submitted to DTC should
be clearly marked, preferably in bold letters
near the top of the document or in a subject
line, to indicate their nature (e.g., TRANSAC-
TION EXCEPTION, VOLUNTARY DISCLO-
SURE, ADVISORY OPINION).

-— Ifa previously-assigned DTC number (e.g.,
license number or DTC registrant code) is
related to the material being submitting,
please indicate it prominently on the docu-
ments. @

Pick-Up of Completed Export Authorizations

Check ROBB First

The Office of Defense Trade Controls (PM/
DTC) currently permits companies to arrange
to pick-up their completed licenses, agree-
ment approval letters, and other
correspondence in person versus having
them returned via First Class or overnight
mail. However, due to time and personnel
constraints and to optimize our electronic
assets, PM/DTC is no longer providing tele-
phonic status of availability of export authori-
zations at the receptionst’s desk. This in-
cludes identifying if a particular request has
been completed and is ready for pick-up. If
that information is required before you come
to DTC, please take advantage of DTC’s Re-
mote Online Bulletin Board (ROBB) which is
available 24 hours a day. ROBB is used to
track each company’s pending applications,
other requests, and any cases completed

within the last 30 days. In addition to provid-
ing the date of DTC’s final action, ROBB also
identifies the officer assigned to the case,
where the case was sent in the interagency
review process, the dates of those responses,
the date of the licensing officer's final action,
and what the final action taken was (e.g., ap-
proved, denied, etc.).

We appreciate your using our electronic ser-
vices and understanding our need to more
appropriately use our personnel to better
serve the entire export community. @

If you need more information... contact Jim
DePalma, System Manager of the Office of
Defense Trade Controls for guidance on
ROBB.

Defense Trade News, Volume 8, Number 1, March 1997

__ Page 15



Dr. Kaminski concluded by discussing DOD’s
Defense Export Loan Guarantee Program.
The new DOD program can issue up to $15
billion of loan guarantees, would be sup-
ported entirely by users’ fees, and would not
duplicate FMS or commercial arms transfer
procedures.

Various parts of DOD and other agencies are
discussing how the program will be imple-
mented. Regarding offsets, he prefers a com-
mercial model, noting that teaming arrange-
ments are set up all the time.

Working Group Reports: DTAG
Officers

DTAG Policy Working Group (PWG)-projects
may include studies on facilitating interna-
tional arms cooperation, the policy and regu-
latory aspects of consolidation of the defense
industry, advanced aircraft sales, and U.S.
arms transfer policy towards Southeast Asia
and the Middle East. The Technical Working
Group (TWG) is defeloping Terms of Refer-
ence for examining software source code,
teaming arrangements, and provisos on li-
censes. The DTAG Secretariat is working
towards establishing a DTAG Homepage on
the Internet.

U.S. Arms Transfer Policy Issues

Deputy Assistant for Export Controls Martha
C. Harris discussed evolving U.S. arms trans-
fer policy towards Central Europe (CE), the
New Independent States (NIS), Latin
America, and ASEAN. Political and eco-
nomic changes in these countries have re-
quired the Administration to review USG
export policies towards these regions. She
noted that, over the last several years, the CE
countries have made significant progress in
meeting our standards on receiving U.S.-ori-
gin arms transfers. Second, the CE states
have implemented democratic and market
reforms. Last, CE countries have a good
record overall on pursuing nonproliferation
objectives, the Czech Republic, Hungary, Po-
land, Slovakia, and Romania having pro-

gressed enough to become members of the
Wassenaar Arrangement. These reforms have
led the United States to revise its arms trans-
fer policy towards Central Europe. Since Feb-
ruary 1994, there is no longer a presumption
of denial for arms sales to all CE states except
the former Yugoslav Republics, which are
under a UN arms embargo. All proposed
transfers of defense equipment and requests
to incorporate U.S. technology into foreign-
origin equipment are considered on a case-by
case basis.

December 5, 1996 DTAG Plenary

The Defense Trade Advisory Group held a
plenary session at the Department of State,
Washington, DC. William Schneider, Jr., the
DTAG chairman, opened the meeting.

Ms. Ramona Hazera, the Vice Chairman,
summarized several DTAG activities for the
year and commented that 1997 would be a
year of change for the DTAG, not only in its
structure, but increase in activity. Important
issues which the DTAG will address include
the clarification of certain regulations regard-
ing the export of defense services in support
of FMS programs; review of technology trans-
fer in terms of protecting US intellectual prop-
erty rights; continuing review of reporting
requirements related to agents and consult-
ants fees; and monitoring regional policy (e.g.
Latin America and China); and review of the
regulatory impacts on defense industry acqui-
sitions and mergers.

Regulatory Working Group

It was noted that the Regulatory Working
Group was working in several areas. Off-
shore Procurement, part 130 of the ITAR, rec-
ommendations to the US Customs Service on
the Automated Export System, and the re-
quirement to obtain Technical Assistance
Agreements for services provided under the
Foreign Military Sales (FMS) program.

Defense Trade News, Volume 8, Number 1, March 1997

Page 17



Editor’s Note

The previous “Special Edition” to the Defense Trade News
and Export Policy Bulletin focused on the Office of Defense
Trade Controls’ performance in our service to Industry. This
issue continues DTC’s conumitment to serve Industry by focusing on new and
admended legislation which will help assure compliance with the law.

We are concerned with what matters to you. If you have questions use the Question
and Answer Forum (page 20) and fax it back to us.

It is important that we hear from you with your Feedback!

New, ImprovedPhone System

DTC has installed a new telephone system, employing a new exchange or returned
directory. We believe that the system will be more efficient and, ultimately, will
allow us to be more responsive.

The automated directory may be reached by dialing (703)875-6644. This familiar

number is the main office number but has new features and should be used to gain :

access to information and to personnel. Please listen carefully to the directory
menu. The case status line may be reached by dialing (703)875-6652. The number
for ALISS remains (703)875-7374. The numbers for facsimile

messages have not been changed: the Compliance Division and the Computer
Support Staff may be reached at (703)875-5663; the Office of the Director, Defense
Trade News and the Licensing Division at (703)875-6647. See the back of this issue
for a more complete listing.

Defense Trade News, Volume 8, Number 1, March 1997

Page 3



Contacting the Office of Defense Trade Controls

Postal Address

Office of Defense Trade Controls
Bureau of Political-Military Affairs
SA-6, Room 200

U.S. Department of State
Washington, D.C. 20522-0602

Express Mail/Courier Delivery Address
Office of Defense Trade Controls

Bureau of Political-Military Affairs

SA-6, Room 200

US. Department of State

Washington, D.C. 20522-0602

(Deliver to Main Department of State Bldg.
2201 C Street, NW

Use 21st Street "Joggers' Entrance")

Fax Numbers
Director; Licensing Division;

Defense Trade News. (703) 875-6647
Compliance Division;
Computer Support Staff: (703) 875-5663

General Telephone Numbers

General Information: (703) 875-6644
Office Director & Deputies: (703) 812-2567
Defense Trade News: (703) 875-5671
Licensing Division: (703) 875-6644,
Press 3
Registration / Compliance: (703) 875-6650,
Press 4
Commodity Jurisdiction: (703) 812-2576

Status Inquiry Telephone Numbers
Case Status Inquiries: (703) 875-6652
Congressional Case Status: (703) 875-6641
Automated License
Status System (ALISS):
Remote On-Line
Bulletin Board (ROBB):

(703) 875-7374

(703) 875-6650

Contacting the Deputy Assistant
Secretary for Export Controls

Deputy Assistant Secretary for Export Controls
Bureau of Political-Military Affairs

PM, Room 7325A

U.S. Department of State

Washington, D.C. 20520-7325

Contacting the Office of Arms Transfer
and Export Control

Office of Arms Transfer

and Export Control Policy

Bureau of Political-Military Affairs
PM/ATEC, Room 2242

US. Department of State
Washington, D.C. 20520-2242

Telephone —_ (202) 647-4231
Fax (202) 647-4232

Ordering Forms and Regulations

To order license application forms, write the Office of Defense Trade Controls or fax (703) 875-6647.
Please mark your message “Attn: Forms.” Specify the type and quantity of forms needed, and
provide a phone number and point of contact along with your address. To order a copy of the
International Trafficin Arms Regulations, call the Government Printing Office at (202) 783-3238 from
8:00 - 4:00 EST; cite stock number 069-001-000-58-1. Please note that DTC doesnot distribute the ITAR

and GPO does not carry application forms.

Department of State Publication 10440
Bureau of Political-Military Affairs
Revised January 1997


Secretary of State
Madeleine K. Albright

Assistant Secretary
of State for
Political-Military
Affairs
Thomas E. McNamara

Deputy Assistant
Secretary for
Export Controls
Martha Caldwell Harris

Executive Editor
Lana C. Chumley

Managing and
Production Editor
Nadia L. Brown

Internet Editor
John Sonderman

Layout Design
Paula M. Lorfano

Graphics Design
Richard E. Florence

Defense Trade News (ISSN 1051-2845) is a bi-annual publication
(January, April, July, October) of the Bureau of Political-Military Affairs,
U.S. Department of State. Its purpose is to provide American industry,
the public, and Congress with information on defense trade policy,
licensing practices, and compliance issues. Contents include official
policy statements and other official documents. Special features, articles,
and other materials (such as maps, charts, graphs, tables, and photo-
graphs) provide additional information on current issues but should not
necessarily be interpreted as official U.S. policy statements. The
Secretary of State has determined that the publication of this periodical
is necessary in the transaction of public business required by law.

Subscription and Address Changes: DTC Registrants — Every firm
registered with the Office of Defense Trade Controls as a manufacturer
or exporter should automatically receive this publication at its registered
address in the name of the registrant in Block 14 of Form DSP-9. To
change a mailing address, a registrant must notify the Office of Defense
Trade Controls in writing, citing its applicant code and amending Form
DSP-9 (see ITAR §122.4).

Non-Registrants — Defense Trade News is also available to U.S. govern-
ment agencies, foreign governments, non-registrant firms, and other
interested parties. To subscribe or to submit an address change, write to
Editors, Defense Trade News, PM/DTC, SA-6, Room 200, Department of
State, Washington D.C. 20522-0602, or fax (703) 875-5663.

Copyright: Unless otherwise marked, this publication’s contents are in
the public domain and are not copyrighted. Such items may be
reprinted; we would appreciate citation of Defense Trade News as the
source. You must obtain permission to reproduce any copyrighted
material (including photographs) from its original source.

Limited Reprint Authorization: DTC registrant companies may
reproduce this entire edition (excluding postal mailing label) for internal
distribution. This permission is given to ensure proper distribution
throughout firms with multiple locations, and to reduce mailing costs.

Corrections, Contributions, and Correspondence: Address to Editors,
Defense Trade News, PM/DTC, SA-6, Room 200, Department of State,
Washington, D.C. 20522-0602.

Postmaster: Send address changes to Defense Trade News, PM/DTC,
SA-6, Room 200, Department of State, Washington, D.C. 20522-0602.

Postage: Third-class postage paid in Washington, D.C. 20522-0602.



OPERATIONS

ITAR Distribution
Where It Can be Found

The Office of Defense Trade Controls, due to
budgetary constraints, will no longer distrib-
ute copies of the International Traffic in Arms
Regulations (ITAR) upon request. Copies of
the current ITAR will be provided as part of
the DTC registration packet to new regis-
trants and persons seeking to renew expiring
registrations.

Please note that the Code of Federal Regula-
tions, which includes the ITAR, can be found
in a variety of libraries. We expect the ITAR
to be featured in the near future on the DTC’s
“home page” of the Internet. In addition,
hard copy editions can be purchased from the

Superintendent of

Documents, Government Printing Office
(GPO), Washington, D.C. 20402-9325. (If
seeking a current copy of the ITAR from
GPO, request 22 C.F.R. rather than the notice
reprinted in the Federal Register on July 22,
1993 (” Amendments to the International
Traffic in Arms Regulations”). The latter has
not been updated to reflect subsequest ITAR
modifications.)

While the only official version of the ITAR is
the U.S. Government printed version of 22
C.F.R. Parts 120-130, various commercial ven-
dors also publish “working” copies, some of
which have handy reference aids not found in
the official version of the ITAR. @

So You Want to Export to Pakistan

Assurance of Timely Processing

More and more companies have expressed
interest in exporting commodities controlled
under the United States Munitions List to
Pakistan. Here are two things to that, if fol-
lowed, will assist in the timely processing of
your application.

(1) In the transmittal letter for the agree-
ment or the export license identify if the com-
modity is currently in the Pakistani inventory.

(2) If the article is in the inventory,
identify the increase in capability that will
result from this export.

In light of the Department’s Policy which
closely monitors exports of defense articles
and services to Pakistan, an extensive review
is required for all applications and other ap-
provals, a minimum of 65 working days is
necessary to process an application of 40 days
is necessary to complete interagency coordi-
nation. @

Defense Trade News, Volume 8, Number 1, March 1997,

Page 13



DTAG Developments

The Defense Trade Advisory Group (DTAG)
convened its semi-annual plenary session on
May 16, 1996 at the Department of State.
Highlights from the session:

Keynote Speaker:

Dr. Paul Kaminski, Under Secretary of De-
fense for Acquisition and Technology, sug-
gested that increased defense cooperation can
help resolve problems which have arisen in
the post-Cold War period.

Countries face limited defense budgets and a
growing number of regional conflicts requir-
ing coalition interventions. Because de-
creased resources limit U.S. involvement in
coalition actions, partnerships with other na-
tions have become more important to achieve
multilateral objectives. Advancing command
and control interoperability and mutual !ogis-
tics support has the added benefit of encour-
aging better economic cooperation.

Economic changes are especially apparent in
the Partnership for Peace (PFP) nations. Since
U.S. defense companies welcome additional
sales opportunities for their products, the
United States has strong economic incentives
to strengthen (industry-to-government and
industry-to-industry) ties with the PFP. There
are also important political reasons for col-
laboration: military and industrial ties com-
prise strong security relations.

DOD has taken action to facilitate collabora-
tive efforts. It has changed its requirements
for unique military specifications. Second, it
has reviewed its procurement policies to en-
sure that limited resources are used most ef-
fectively to advance the national interest.
Lastly, DOD is working to remove bureau-
cratic barriers and streamline procedures on
international defense cooperation. For ex-
ample, a 1994 directive has shortened the re-
view period for draft memoranda of under-
standing (MOUs) from 130 days to 30 days.

DOD’s Armaments Cooperation Security
Comunittee (ACSC) has identified new oppor-
tunities for cooperative. Three International
Cooperative Opportunity Groups have been
established since October 1994: the United
States and its allies are developing lists of
programs for cooperation in major weapons
systems, S&T programs, and advanced con-
cept technology demonstrations. In addition,
the ACSC is examining how Defense Coop-
eration Armaments ODCA) resources in U.S.
embvassies can best be utilized in the Post-
Cold War era.

The NATO Cooperative R&D Program en-
sures that all partner nations get involved at
the outset of a development program. Under
it contributions from our allies would match
US. funds. In the FY’97 budget, the program
was adjusted to place more emphasis on
enhancing coalition operations, including
ways to reduce friendly fire incidents.

Page 16

Defense Trade News, Volume 8, Number 1, March 1997