Advisory Opinions From DDTC – What Are They?

The Directorate of Defense Trade Controls (DDTC) that administers and enforces the ITAR also issues Advisory Opinions (AO). What the heck is an AO? If you come from a Customs compliance background you know about Customs rulings and may have applied for some. An AO is sort of like a Customs ruling in that it is a written interpretation of the regulations.

Like other regulations the ITAR is not always clear when applied to certain transactions. In order to stay compliant an exporter may want to seek guidance from DDTC on a particular provision or definition. That's where an AO may come in handy.

Information on AOs can be found in Part 120.22 of the ITAR and at the DDTC website (pmddtc.state.gov). They list circumstances that may be the subject of an AO:

Preliminary Authorization Determinations: Whether DDTC would be likely to grant a license or other approval for an article or defense service to be exported to a particular country. This comes with a caveat that the response may not be binding on DDTC – things can change.

Interpretations of the ITAR: This is an interpretation of the requirements in the ITAR. The response is also not binding on DDTC.

Guidance on Brokering and Brokering Activities: "Brokering" under the ITAR has a broad definition. It includes any activities to facilitate the sale and export of ITAR controlled defense articles and defense services. Given this broad definition issues may arise of whether an activity is considered brokering or whether a person or entity is considered a broker. An AO is a good tool to clarify what is or isn't brokering.

Needless to say, seeking an AO is also evidence of reasonable care and may help you sleep better at night.

At this point we should distinguish between an AO and a Commodity Jurisdiction request. A Commodity Jurisdiction is used to determine if an item is controlled under the ITAR or the Export Administration Regulations of the Department of Commerce. An AO is used to determine if an item is, or is not, subject to an ITAR provision.

To submit an AO a party does not need to be registered with DDTC. If the submitting party has access to the Defense Export Control & Compliance System (DECCS) DDTC recommends submitting via that tool. By doing so the submitting party will receive a faster response. If the party is not on DECCS they can submit in hard copy; however, they will need to complete form DS7786. This form ensures that DDTC will have all pertinent information to adjudicate the request.

If the issue is whether DDTC will approve a license for export of a defense article or defense service to a particular party country, DDTC recommends that the requesting party submit a DSP5 license application in lieu of an AO. This way DDTC will either approve the license or will provide export guidance if the license is not approved.

How long will it take to receive an answer to the AO request? That is difficult to say because it depends on the nature and complexity of the request.

Naturally, the requester is bound by the DDTC response. If it says a license is required start the license application. It is possible to ask for reconsideration; however, the requester would need to provide new information to support it.

An AO can be a useful tool to clarify the provisions in the ITAR and stay compliant. Take advantage of it when necessary.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.