On July 10, 2023, the State Department released a Fact Sheet with additional details on the AUKUS Trade Authorization Mechanism (ATAM). ATAM appears likely to operate as a license exemption under the International Traffic in Arms Regulations (ITAR), leveraging the existing ITAR §126.4, to authorize transfers of certain approved categories of defense articles and services to previously approved parties in the UK or Australia, for use in enumerated AUKUS-related programs/end uses and subject to recordkeeping requirements. AUKUS is a trilateral security pact between the U.S., the UK, and Australia, and is one of the Biden-Harris Administration’s key national security initiatives from the 2022 National Defense Strategy.
The Fact Sheet follows a preview of ATAM by State and Department of Defense (DoD) officials in front of the House Foreign Affairs Committee in May. In her remarks before the Committee, Assistant Secretary Lewis laid out a three-phased approach for implementing the technology transfers envisioned under AUKUS: (1) the ATAM regulatory innovation to enable immediate streamlined transfers within the current legislative framework; (2) bolder legislative changes to the Arms Export Control Act; and (3) seeking commitments from the UK and Australia on shared standards for protection of defense information and material.
Of note, and unlike the Open General Licenses (OGLs) published last year, the Fact Sheet explains that ATAM will authorize certain transfers of “items that were previously sold as Foreign Military Sales [(FMS)]. . . but may be handled as [Direct Commercial Sales (DCS)] under ATAM.” It further notes that the mechanism “will allow DCS transfers of some items typically transferred only under FMS.” The Fact Sheet also states that per legislative requirements, “the U.S. government would need to notify shipments under this authorization exceeding $100 million at least 15 days prior to the shipment.”
Currently, the interagency is drafting a list of technologies and communities to be covered by ATAM. Assistant Secretary Lewis confirmed in her testimony that certain items would be excluded from the list of eligible items, including items that the U.S. is “prohibited from transferring under treaties, for example, that would violate our nuclear Non-Proliferation laws.” Additionally, it remains to be seen whether ATAM will rely upon the lists of Approved Communities eligible under the OGLs to receive defense articles, or perhaps a broader set of recipients as may be possible under ITAR § 126.4.