On December 26, 2019, the Department of State published an interim final rule amending the International Traffic in Arms Regulations (ITAR) to include a new definition of “Activities that are not exports, reexports, retransfers, or temporary imports.” By combining new text with existing regulations, the updated definition seeks to provide guidance on secured unclassified technical data and to harmonize language with the Export Administration Regulations (EAR), which was implemented by the Bureau of Industry and Security (BIS) in 2016.
In regards to technical data, the interim rule specifically states that the “electronic transmission and storage of properly secured unclassified technical data via foreign communications infrastructure” is not considered an export, reexport, retransfer, or temporary import, and as such, does not require government authorization. In order for unclassified technical data to be “properly secured,” specific standards regarding encryption must be met, as discussed in the new ITAR Section 120.54. For example, the technical data in question must be effectively encrypted using end-to-end encryption, where the data has been encrypted prior to leaving a sender’s facilities and continues to be encrypted until an eventual decryption by the intended recipient or retrieval by the sender occurs. Additionally, technical data cannot be intentionally sent to or from an individual or stored in a country listed in ITAR Section 126.1, such as China, or the Russian Federation. This new rule is an important policy change that will now permit companies to store and send ITAR-controlled technical data using cloud computing solutions with global platforms.
In addition to “properly secured” transfers of technical data, the new definition also includes the following activities: launching items into space; transferring technical data to U.S. persons within the United States or within a single country abroad, so long as there is no release to a foreign person or a person prohibited from receiving technical data; and moving a defense article between the states, possessions, and territories of the United States.
This interim final rule becomes effective on March 25, 2020.
For more information on how these could impact your business, contact:
- Martin Lutz, Partner (firstname.lastname@example.org, 512-495-6024),
- Lindsey Roskopf, Attorney (email@example.com, 713-615-8534), or
- Another member of the McGinnis Lochridge International Trade and Transactions Practice Group