On August 15, 2024, the DDTC published a final rule to expand the ITAR’s definition of “activities that are not exports, reexports, retransfers, or temporary imports.”  The final rule implements the amendments the DDTC originally proposed on December 16, 2022 with six changes.  The rule is effective on September 16, 2024 and codifies longstanding DDTC policies and clarifies the jurisdiction of the ITAR.

First, the final rule codifies existing DDTC policy that taking a defense article subject to the reexport or retransfer requirements of the ITAR on a deployment or training exercise outside a previously approved country is not a reexport or retransfer provided:

• there is no change in end-use or end-user;
• the defense article is transported by and remains in the possession of the previously authorized armed forces of a foreign government or United Nations military personnel; and
•  the defense article is not being exported from or temporarily imported into the United States.

Second, the final rule clarifies that the transfer of a foreign defense article previously imported into the United States that has since been exported from the United States pursuant to a license or other approval is not a reexport or retransfer provided:

• the foreign defense article was not modified, enhanced, upgraded, or otherwise altered or improved in a manner that changed the basic performance of the item prior to its return to the country from which it was imported or a third country;
• a U.S.-origin defense article was not incorporated into the foreign defense article; and
•  the defense article is not being exported from or temporarily imported into the United States.

While the rule change appears to have fairly narrow implications for industry, it does confirm that foreign-origin defense articles (including technical data) that come within U.S. jurisdiction (for example, transit a U.S. server) do not effectively become U.S. origin, and that ITAR-control over these items, if unmodified, extends only to the import or export from the United States.