Technology Transfer Challenges Lesson Objectives Plan and modify
Technology Transfer Challenges
Lesson Objectives Plan and modify technology development and acquisition strategies to incorporate international considerations – Differentiate between the reasons for, the types of, and the legal authorizations of export control – Formulate the need for ITAR exemptions – Compare and contrast U. S. Government and industry views of export control planning and their subsequent challenges
“The World Today” • • • Advances in technology Foreign availability vs comparability U. S. national/military security strategies Economic pressures and imperatives International harmonization of export controls • Non-traditional ‘partners’ • Balancing benefits and risks
Arms Export Control Act (AECA) • Encourages restraint in exports but recognizes that nations have valid defense requirements • Recognizes most nations need help in acquiring defense capabilities and the need for defense cooperation among U. S. friends & allies • Authorizes arms exports under direction of the President; Secretary of State shall administer or control • Recipients must adhere to U. S. terms regarding: – Transfer – Use – Protection
Common “Exports” • Shipment to Foreign Destinations (Including Canada) • Shipment to Foreign Entities in U. S. (e. g. , Embassies) • Computer Networks (Internet, Intranet, Web Sites) … Laptops • Conversation • Business Meetings • Foreign Travel • International Mail • Hand-carry • Telephone Conversations • Technical Services • Electronic Transmission • Foreign Visitors: Facility Tours Meetings • Symposia Presentations • Foreign Employees • Published Articles • Trade Shows (U. S. & Overseas)
Export Authorizations • License • Executed Agreement • Exemption (self-executing or triggered) There’s also … • Third Party Transfer (TPT) • Transfer / End Use
Licensing Process Applicant Do. S/ DDTC Do. D DTSA Services JS, NSA Others MTEC Other Agencies Do. S/ Internal Human Rights PM Do. S/ DDTC – Directorate of Defense Trade Controls DTSA – Defense Technology Security Administration MTEC – Missile Technology Export Committee PM – Bureau of Political Military Affairs NASA Regional Bureau Applicant
Do. S Licenses and Related Forms DSP-5* Permanent export unclassified articles or data (Amended by DSP-6) DSP-61* Temporary import of unclassified articles (Amended by DSP-62) DSP-73* Temporary export of unclassified defense articles (Amended by DSP-74) DSP-83 Non-transfer and Use Certificate – for SME, exports of classified articles/data DSP-85* Permanent/temporary export/import of classified articles/technical data DSP-94 Foreign Military Sales (FMS) shipments * Denotes a License
Agreements Parts 120. 21, 120. 22, 120. 23 § Manufacturing License Agreement (MLA): An agreement or contract whereby a U. S. person grants a foreign person an authorization to manufacture defense articles abroad § Technical Assistance Agreement (TAA): An agreement between a U. S. person and a foreign person for defense services or recurring disclosure of technical data as opposed to agreement granting a right or license to manufacture § Distribution License Agreement (DLA): An agreement to establish a warehouse or distribution point abroad for defense articles exported from the U. S. for subsequent distribution to entities in an approved sales territory
ITAR Licensing Exemptions • Exemptions can save considerable time and money • They are covered in multiple places in the ITAR (Parts 123 [Defense Articles], 124 [Agreements and Services], 125 [Technical Data], or 126 [General]) • Some exemptions are self-executing; others must be approved or “triggered” by a Do. D Authorized Exemption Official (AEO) or Exemption Certifying Official (ECO) who are at flag officer or SES level • Exemption must be in support of: USG sales, cooperative agreements, personnel exchange agreements, combined military ops, or unilateral U. S. military ops abroad
Exemptions – Part 123 (Defense Articles) No license required for unclassified exports: • For temporary import and subsequent export of U. S. articles for repair or overhaul (does not include modifications or upgrades) (Part 123. 4(a)(1)) • For exports of U. S. articles in support of an approved MLA, TAA, or Distribution Agreement (Part 123. 16(b)(1)) • For spare parts for previously approved exports up to $500 per shipment (no more than 24 per year; can’t enhance capability) (Part 123. 16(b)(2)) • For temporary exports to trade shows or exhibitions if same article previously approved for export (Part 123. 16(b)(5))
Exemptions – Part 124 (Agreements and Services) No agreement or license required: • For provision of training in basic operations and maintenance of classified and unclassified defense articles exported to same recipient ( does not include intermediate and depot levels) (Part 124. 2(a)) • For provision of additional maintenance training and information to NATO nations, Australia, Japan, and Sweden for unclassified defense articles (may include some technical data beyond basic; limited to inspection, testing, calibration, or repair, including overhaul, reconditioning and one-to-one replacement of defective items; not upgrades, modifications, or alteration) (Part 124. 2(c))
Exemptions – Part 125 (Technical Data) No license required: • For classified or unclassified technical data at the written request or direction of a Do. D official (Part 125. 4(b)(1)) – Triggered • For unclassified or classified technical data pursuant to an approved MLA or TAA (Part 125. 4(b)(2)) • For unclassified technical data provided to nationals of NATO nations, Australia, Japan, and Sweden at Do. D’s request to respond to a quote or bid proposal (RFP) (Part 125. 4(c)) – Triggered
Exemptions – Part 126 (General Policies & Provisions) No license required: • For temporary transfers of unclassified and classified articles and technical data by/for a USG agency in support of a lawful and authorized international program (may be permanent if in support of a foreign assistance or cooperative program or for USG use) (Parts 126. 4(a) and (c)) – Triggered • For transfers of unclassified and classified articles and technical data pursuant to an approved LOA (Part 126. 6(c)) • Canadian ITAR exemption (Part 126. 5) • Special DTSI Authorizations (Part 126. 14) • Australia Treaty exemption (Part 126. 16) + Supp. 1 • UK Treaty exemption (Part 126. 17) + Supp. 1
How Do Violations Occur? • Non-compliance with limitations and provisos on approved licenses • Defense services and technical data provided to foreign companies that are not signatories to MLA/TAA/Distribution Agreement • Documents or electronic media containing defense technical data carried on international business trips without proper license/authorization • Marketing presentations, made in the U. S. or abroad, containing defense technical data without proper license/authorization • Foreign national employees … • International trade show displays … Remedial Action ? ?
Strategic View (USG) International programs will involve the required disclosure or release of export controlled information • Many “moving parts” 3 Committees, 6 major processes, 23 agencies, 45+ offices • Numerous laws, executive orders, policies, regulations apply • There is no single USG official or agency responsible for overall management of foreign disclosure and export control requirements • Processes usually do not run concurrently • Competing / conflicting equities involved • May take several months to complete / reach consensus Key to success is PLANNING Disclosure and export control requirements must be integral parts of overall program planning
Strategic View (Industry) • Complicated regulations • Multiple bureaucratic processes • Involves many USG agencies which handle a high volume of both electronic and hardcopy license requests • Some products are controlled more stringently than others • Time consuming review cycle • Severe penalties for noncompliance • Industry gets involved by: – Identifying licensing requirements in a timely manner – Developing relationships with reviewing USG agencies – Briefing international technology transfer issues to cognizant USG agencies – Identifying select urgent requirements and facilitating expedited review by the USG – Complying with regulations and maintaining an ethical and responsible reputation
Issues Impacting Info Sharing • • • Need to know versus Need to share Types of information (CMI, CUI, etc. ) Over-classification Improper markings (NOFORN) Information technology tools (AISs) Multiple authorities (NDPC, AT&L, NGA, NSA, DNI, etc. ) • Lack of policy on information sharing with non-traditional partners • Education and training
Tech Transfer Realities • U. S. Government often makes policy on a regional basis, not just a bilateral basis • More participants = different equities & priorities • Cultural differences = misunderstandings • Lack of interagency consensus on tech release • FCPA is not the standard in some countries • More countries shifting demand from ‘offsets’ to ‘industrial footprint’ & long-term partnerships
Tech Transfer Challenges – 1 • Building partner capacity vs protecting U. S. capability • Technology Security and Foreign Disclosure processes are “consensus-based” • Requests that are not well defined are more difficult to work – requirements vs systems • U. S. and foreign industry cooperation • U. S. Government systems at different acquisition stages present different challenges • Legacy – Recently fielded – Developmental or future
Tech Transfer Challenges – 2 • What are the rules that apply? • Is it urgent? (Real or perceived) – Speed + ITAR = Oil + Water • Am I torn between “Share and Protect? ” • RFP – Is it releasable to foreign entities? • Planning – Did I determine that there is CPI in the system and have I protected it? • Authorization – Do I have authorization to release the technical data and technology requested?
Tech Transfer Challenges – 3 • Supports U. S. Foreign Policy and U. S. Military and Security Objectives • Does not jeopardize U. S. military security • Foreign recipient has the intent and capability to provide the equivalent degree of protection • Results in clearly defined benefits to the U. S. • Information is limited to satisfy authorized purpose • Avoids false impressions
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