Forwarders cut off from ITAR license process
In an abrupt change of policy, the U.S. State Department’s Directorate of Defense Trade Controls (DDTC) will no longer approve export licenses for freight forwarders that have traditionally managed international shipments for American shippers of military technology.
“Many of the nation’s largest defense contractors have come to rely extensively on freight forwarders’ licensing to simplify and accelerate their DOD (Department of Defense) export programs,” said Carlos Rodriguez, a Washington-based attorney who represents forwarders.
“DDTC’s action is not just unfair, but it rises to the level of an arbitrary and capricious violation of the registered freight forwarders’ due process rights,” he added.
Rodriguez said he contacted DDTC officials late last week to confirm the change in policy. Even those forwarders that are currently registered with the DDTC will be denied export licenses in the future.
The DDTC’s policy will now only allow shippers to obtain export licenses for their shipments regulated under the country’s International Traffic in Arms Regulations (ITAR).
According to a letter from the DDTC, an applicant “must be the entity who is selling the defense article to the designated recipient foreign company, thus making an ‘export’ as defined by ITAR, Section 120.17.” Rodriguez said this section of ITAR “merely defines the term ‘export.’ It says nothing concerning the identity of the entity which can ‘make’ the export.”
He also noted that the DDTC’s registration process, even for forwarders, is time consuming and requires the applicant to pay heavy fees. “It is intended to assure that licenses are only granted to qualified applicants,” Rodriguez said.