The U.S. Department of State (“State”) has decided to lift the defense trade embargo against Cambodia.  Accordingly, the Directorate of Defense Trade Controls (“DDTC”) will publish on November 7, 2025, a final rule amending the International Traffic in Arms Regulations (ITAR) at § 126.1 to remove Cambodia from the proscribed countries list. 

For countries included on the proscribed countries list in § 126.1 (“126.1 countries”) DDTC’s policy is to generally prohibit all exports or imports of defense articles and defense services destined for or originating in these countries; certain exemptions are not available for 126.1 countries and any involvement of 126.1 countries in ITAR regulated activity without authorization trigger mandatory notification requirements to DDTC.   

As a result of this rule, license requests for defense articles and defense services to Cambodia will now be evaluated individually, and exemptions previously unavailable under ITAR § 126.1 will be accessible for Cambodia (provided exemption criteria are met).   

Justifying the shift in policy, State cited Cambodia’s “diligent pursuit of peace and security, including through renewed engagement with the United States on defense cooperation and combating transnational crime.”  The decision to remove prohibitions on Cambodia follows a series of meetings and trade deals President Trump made during his trip to the region at the end of October.  In a fact sheet, the White House explained that the United States and Cambodia agreed to provide U.S. exporters “unprecedented access” to Cambodia’s market, including ending the “competitive disadvantages” U.S. exporters face compared with other trading partners with Cambodia; though no specific mention was made about defense trade.  China has historically been the main supplier of arms to Cambodia, according to the Stockholm International Peace Research Institute (SIPRI).

Crowell & Moring LLP will continue to monitor defense trade developments and the potential impact to industry.