April 30, 2018

5 Things You Should Know About ... 126.1 Countries

1. Watch out for the unusual suspects.

Section 126.1 of the International Traffic in Arms Regulations ("ITAR") contains the usual suspects (Syria, North Korea, Iran, etc.); however, it also contains countries that are not quite as intuitive if you are not steeped in foreign affairs, such as Cyprus, Haiti, Somalia, and Zimbabwe.

2. An export license is not impossible.

Just because your end user is located in a Section 126.1 country does not mean that securing an export license is wholly unachievable. It simply means that your license will be subject to a “presumption of denial,” and that the likelihood of success is significantly lower.

Furthermore, with the exception of Belarus, Burma, China, Cuba, Iran, North Korea, Syria, and Venezuela, there are generally circumstances and end uses that will be viewed more favorably (such as defense articles and defense services exported to the DRC for use by MONUSCO or the African Union-Regional Task Force).

3. Proposals and presentations require licenses.

Typically, exports of proposals and presentations do not require licenses unless they contain technical data. However, pursuant to Section 126.1(e)(1), exports of proposals or presentations to 126.1 countries DO require licenses.

4. Brokering likely requires a license.

There are only a limited number of circumstances under which licenses are required in order to broker the sale/export of defense articles or defense services, and Sections 129.5(a) and (b) contain exemptions to these requirements. These exemptions do NOT apply, though, where “[a] country or person referred to in §126.1 of this subchapter is involved in the brokering activities or such activities are otherwise subject to §129.7.”

5. It’s not just end users!

Exporters commonly assume that only END USERS captured under Section 126.1 are subject to heightened scrutiny. This is is a mistake.

Pursuant to Section 126.1(b), exporters must also carefully select their shippers, too, as defense articles otherwise authorized for export “may not be shipped on a vessel, aircraft, spacecraft, or other means of conveyance that is owned by, operated by, leased to, or leased from any of the proscribed countries, areas, or other persons referred to in [Section 126.1].”


About the Authors

Downrange authors Jennifer S. Huber and Adam Munitz are Partners in FH+H's International Trade & Transactions Practice.  Focusing primarily on the defense, security, and intelligence sectors, Jennifer and Adam help businesses translate their domestic successes into overseas growth and assist foreign entities with sensitive investments in, and acquisitions of, U.S. businesses.  

Additional information regarding their capabilities and previous representations can be found here.

 

Select Practice Group: 
Category: 
Grid: Intro Description: 
Exporters commonly assume that only end users captured under Section 126.1 are subject to heightened scrutiny. This is is a mistake.
Connect with Us: Sign Up to Receive Email Updates

Stay Updated and Receive Occasional FH+H Updates