Key Takeaway: DDTC’s proposed rule would shift ITAR Part 130 reporting from a transaction-linked model to consolidated annual submissions. It also proposes raising monetary thresholds for the first time since 1993. By making notifications of political contributions and fees or commissions related to foreign arms sales simpler and clearer, the proposal will make reporting more straightforward for industry while providing better information to the State Department.

On June 15, 2026, the U.S. Department of State’s Directorate of Defense Trade Controls (“DDTC”) published a proposed rule to amend the International Traffic in Arms Regulations (“ITAR”), 22 CFR Part 130, governing disclosure of political contributions and fees or commissions paid in connection with foreign defense sales. The rule is issued in support of Executive Order 14268, which in part directed the State Department to reduce regulatory burdens associated with U.S. arms transfers. The proposed rule applies to applicants, suppliers, and vendors as defined under 22 CFR Part 130. Public comments are due on or before August 14, 2026.

Background: Part 130 of the ITAR requires covered parties to report political contributions and fees or commissions associated with U.S. direct commercial sales (“DCS”) and foreign military sales (“FMS”). Under the existing framework, reports are submitted transaction-by-transaction alongside ITAR authorization applications or within 30 days of FMS contract award. This structure frequently produces estimated figures, inconsistent formats, and duplicate filings that DDTC must reconcile manually before reporting to Congress under Section 36(a) of the Arms Export Control Act (“AECA”). Further, the current reporting thresholds have remained unchanged since July 1993.

Scope of the Proposed Rule: Part 130 reporting for individual ITAR authorizations and FMS contracts would be replaced by an annual report submitted at the time of DDTC registration renewal. The annual report would be signed and certified by a designated senior officer. Structurally, Part 130 statements would be removed from DDTC’s DSP-5, DS-6004, and DSP-85 license application forms.

The proposed regulation would maintain a supplementary reporting requirement and to the extent a company discovers that a payment or offer to pay made in the previous reporting period was not included in the annual report or when a payment actually made is substantially different in amount from a previously reported estimate, the company must submit a supplementary report within 30 days of that discovery. Additionally, in the case of a merger or acquisition, the parent, acquiring entity, or new entity that maintains the DDTC registration would be responsible for reporting all information required under Part 130 not previously reported to DDTC by the absorbed or acquired entity. This report would be required within six months of the acquisition.

The proposed amendments would raise the monetary thresholds as described below: 

• Threshold value: The total value of the ITAR authorization, FMS contract, or furnished defense articles to trigger Part 130 reporting would change from $500,000 to $1,000,000.
• Aggregate political contributions: The aggregate sum of political contributions for the transaction that would require reporting would change from $5,000 to $10,000.
• Aggregate fees or commissions: The aggregate sum of fees or commissions for the transaction that would require reporting would change from $100,000 to $200,000.

Implications for industry: Trade compliance teams should assess whether the proposed threshold adjustments affect their current Part 130 exposure and update internal screening accordingly. Additionally, companies should determine how to adjust their Part 130 compliance practices to reflect an annual instead of a transactional-based reporting structure. Given the obligations related to acquired/absorbed entities, companies should consider if Part 130 diligence is warranted in pre-closing due diligence and/or post-closing integration.

Crowell will continue to monitor DDTC’s proposed rulemaking and any final rule affecting Part 130 reporting obligations under the ITAR.