The ITAR Australia and UK Exemptions – Better Read the Regulations Carefully

By: Bruce Leeds, Senior Counsel, Braumiller Law Group and  George Alfonso, Of Counsel Braumiller Law Group, President Reigncore Lobbying

On behalf of our example, we’d like to introduce you to “Joe Compliance.” Imagine Joe Compliance is going through the International Traffic in Arms Regulations (ITAR) and notices license exemptions for Australia and the UK in Part 126.16 126.17.  Joe thinks “this is great” because a business unit at his company is planning exports of defense articles to both countries.

Under the ITAR a license exemption means that the exporter does not need a license or agreement to export or temporarily import defense articles or defense services.  To qualify to use a license exemption, the exporter must be registered with the Directorate of Defense Trade Controls (DDTC), meet all the requirements for use of the exemption, and declare the exemption on the Electronic Export Information (EEI) filed in the Automated Export System.  Exporters should assume that DDTC and US Customs & Border Protection will interpret and enforce ITAR exemptions strictly.

What Joe needs to do is to read Parts 126.16 and 126.17 carefully to determine if his company meets all the requirements to use either of these exemptions. The first thing Joe notices is the titles of these parts. They read “pursuant to the Defense Trade Cooperation Treaty between the United States and Australia (or UK).”   This indicates there are treaties that form the basis for these exemptions, meaning that use of any exemption must be in accordance with these treaties.

The regulations for the two exemptions read in a similar manner.  Let’s look at Part 126.17 for the UK exemption to see what is required.

  • The exporter must be a member of the United States Community. The US Community includes US Government agencies acting in their official capacity, and non-governmental exporters registered with DDTC and eligible to apply for and receive an export license.
  • The exporter will need to be registered for the Defense Export Control and Compliance System (DECCS).
  • The export must be to a member of the United Kingdom Community. The community consists of (1) UK governmental entities identified at the DDTC website (, and (2) non-governmental entities identified as part of the UK Community at the DDTC website. The lists of these entities are located in the Treaty Compliance System in DECCS.
  • The exported defense articles or defense services must be for one of the authorized end uses identified in Part 126.17(e) or the eligible programs listed at the DDTC site.
  • The exported defense articles or defense services must meet the qualifications and restrictions in Part 126.17(g).
  • Any transfers, retransfers or re-exports must meet the conditions in Part 126.17(h).
  • Classified and unclassified articles exported under the treaty and exemption must bear special marking.
  • Any intermediate consignees in the UK, such as customs brokers and freight forwarders, must be identified on the list of Authorized United Kingdom Intermediate Consignees at the DDTC website.
  • The UK exemption must be cited on the EEI filed in the Automated Export System at the time of export. Additional information, such of the name of the program, may also be required on the EEI.
  • The US exporter of defense articles or defense services under the exemption must keep detailed records of each export and make them available to the US Government on request.

Exporters that cannot meet all these requirements cannot use the exemption.

What about Australia?  Other than the name of the country involved, the regulations governing the exemption in Part 126.16 of the ITAR are very similar.  Anyone wanting the use the ITAR exemption for Australia will need to meet many – if not most – of the same requirements. The same goes for Canada and Japan.

What about Joe Compliance?  After reading the regulations and reviewing the requirements, he advised the business unit at his company to either apply for a license or forget about exporting to the UK or Australia.

“When considering the continuing saga of Joe Compliance and ITAR Exemptions, the fact remains, it doesn’t have to be this way.” stated S. George Alfonso, Of Counsel Braumiller Law Group, and President Reigncore, LLC, a lobbying firm. The above tale of Joe Compliance is a story that doesn’t have to end with Joe having wasted hours of his life he’ll never get back, reading the International Traffic in Arms Regulations (ITAR) notices and license exemptions, only to give up on his idea of utilizing the codified “ITAR Exemptions”[1] in order for his company to substantially benefit from these codified and authorized Exemptions, although unfortunately the vast majority of businesses do exactly this.

Instead, as an alternative to simply taking a “pass” based on complexities involved, Joe could’ve retained the services of a lobbying firm focusing on international trade, including ITAR and ITAR Exemptions.

The ITAR Exemptions were created specifically to assist companies planning export defense articles to the identified nations or regions, with the ability to avoid the necessity of obtaining a license or agreement to export, or temporarily import, defense articles or defense services.

However, the opaque language and intertangling references to sections and treaties in reality, has rendered most companies too timid to attempt to undertake the potential benefits to ITAR Exemptions, due in part to:

  • Ongoing self-imposed and self-monitored Exemption requirements;
  • The inherent substantial financial risks in penalties and violations in the event the company is determined subsequently to have failed to satisfy all required Exemption requirements; and,
  • A negative view of potential contractors who desire to deal with companies who state their intention to attempt to operate under ITAR Exemptions.

How would a lobbying firm’s assistance work then? Joe could retain a lobbying firm who would specifically draft for his relevant country, or group of countries, via something similar to “ITAR Exemption for Dummies”.  Joe would therefore be equipped with a plain English, easily understandable roadmap on what will be required to initially satisfy the ITAR Exemption requirements, as well as a checklist for the required ongoing self-monitored ITAR Exemption compliance.  The lobbying firm would also provide ongoing consulting to Joe and his company in order to ensure that the company doesn’t make any subsequent mistake or omission, which would render an otherwise compliant ITAR Exemption Program in violation of the Exemption rules and thereby subject to substantial fines and penalties.

* Reigncore was founded by international lawyers Adrienne Braumiller (Senior Partner of Braumiller Law) and S. George Alfonso (founder of The Law Offices of S. George Alfonso).  This is a uniquely qualified partnership as there are very few lobbying firms that also have expertise in international trade, which in the case of Joe Compliance, is essential. For more information,

[1].          See §§ 123/125/126:

  • Japan [See § 123.9];
  • “NATO Nations” [See § 123.9];
  • Canada [See § 126.5];
  • Australia [See § 126.16];
  • The United Kingdom [See § 126.17]