DDTC Announces Policy for Non-US Entity Name Changes

2009/02/02

By: Danielle McClellan

A DDTC has issued a policy decision that is intended to “regularize” the process for addressing foreign entity name changes for ITAR authorizations. Currently these changes often require a replacement DSP authorization or DSP-119 and amendment to an agreement. This often impacts a large number of authorizations and involves a lot of work for the Government and a “little” for the applicant.

The goal is for General Correspondence (GC) requests from the foreign entity to the government to be used to document and acknowledge the changes on the ITAR authorizations. It sounds easy enough, but DDTC is requiring much more than just a letter, the following documentation will be required:

• An organizational matrix/flowchart showing the current structure of the entity that is seeking authorization from DDTC regarding the name change
• A copy of the press release announcing the name change and/or the circumstances that led to the name change
• The GC letter with the following requirements:
  • Subject line must state “General Correspondence Notification of Foreign Entity Name Change and/or Merger, Acquisition, or Reorganization”
  • The first paragraph must be an explanation of the name change, the reason for the change, including a summary of the merger/acquisition/reorganization activities leading to the change and the role of the acquiring company in the day-to-day operations of the foreign entity seeking authorization for the name change.
  • The following questions must be answered in detail:
    1. Why is the name of the entity changing? What is the estimated effective date of the change?
    2. What is the role of the acquiring company in the day-to-day operations of the entity seeking this authorization
    3. What will be the role of the acquiring company or merger partner in regards to currently held ITAR authorizations-in the form of a declarative statement
    4. If access is not to be granted to the acquiring company regarding ITAR-controlled defense articles and/or technical data what mechanisms are in place to protect these articles from unauthorized access?
    5. Is there any ownership and/or control of the effected foreign entity by a 126.1 entity? (see 122.2(c))
    6. The GC letter must also include the following statement: “[New name/foreign entity seeking authorization for name change from DDTC] now assumes all rights, responsibilities, liabilities and obligations that existed, exist or may develop regarding transferred ITAR-controlled defense articles and/or technical data. [New name] must adhere to all limitations and provisos associated with any DDTC-issued authorizations.

Based on the answers to all of the above mentioned questions DDTC will either give guidance that DSP-119’s are not required for the DSP authorizations/minor amendments for agreements or they will advise that replacement authorizations must be obtained/formal amendments to agreements must be submitted.

More information:

DDTC’s Guidance Document (DOC)