Those of you who do business in the ITAR-controlled world should take note of the following long-awaited proposed rule clarifying the 125.4(b)(9) exemption for hand carries of ITAR technical data. Comments are due by January 25, 2010.

On November 24, 2009, the Office of Defense Trade Controls Policy of the Department of State published a proposed rule in the Federal Register to allow explicitly for US employees of US corporations and the US government to hand carry technical data outside the United States for use by US persons employed by those same US corporations or US government. The technical data may be classified (provided the NISPOM requirements are met) and may be in any media or format, thereby confirming the hand carrying of laptops and other electronic media bearing ITAR technical data provided the exemption criteria are met and properly certified.

Under the proposed rule, however, a number of the restrictions will remain, including, most notably that: 

1. The exemption does not apply to exports to proscribed destinations under 22 CFR 126.1, and

2. The technical data may be used outside the United States only by employees of the same US corporation or the US government –  not by US persons employed by foreign subsidiaries or foreign affiliates of the US person.

An unofficial red-line of the proposed rule from the prior rule appears below. Finally, please keep in mind that this is a proposed rule; it is not yet in effect.

Unofficial Redline:

(9) Technical data, including classified information, and regardless of media or format, sent or taken by a US person who is an employee of a US corporation or a US government agency to a US person employed by that US corporation {overseas deleted} or to a US government agency outside the United States. This exemption is subject to the limitations of § 125.1(b) of this subchapter and may be used {only deleted} if:

(i) The technical data is to be used outside the United States solely by US persons;

(ii) If the US person outside the United States is an employee of the US government or is directly employed by the US corporation and not by a foreign subsidiary; and

(iii) The classified information is sent or taken outside the United States in accordance with the requirements of the Department of Defense National Industrial Security Program Operating Manual (unless such requirements are in direct conflict with guidance provided by the Directorate of Defense Trade Controls, in which case the latter guidance must be followed). 

Kay C. Georgi
georgi.kay@arentfox.com
202.857.6293