DDTC Updates Part 130 Guidelines - Export Compliance Training Institute

The State Department has updated its written guidelines on its ITAR Part 130 rules for payment and reporting of political contributions, fees and commissions.  These guidelines are a hand reference guide that help exporters sort through the complex Part 130 rules.  Here is a quick look at the guidelines.

The revised Part 130 guidelines say that license applications for exports of defense services or articles valuing $500,000 or more to or for the use of foreign military forces must inform the DDTC as to whether they or their vendors have paid, offered or agreed to pay political contributions of $5,000 or more or fees and commissions of $100,000 or more. The applicant must obtain the same information from any party that provided the applicant with more than $500,000 worth of defense articles or services for the application.

In addition, the reporting requirement does not end with the submission of the application.  Applicants are required to provide supplementary reports detailing any related substantial political contributions ($2,500 or more) or fees and commissions ($50,000 or more) agreed upon or paid after the initial license is submitted (within 30 days, to be exact).

Part 130 reports must contain:

• The total contract price of the sale to the foreign purchaser. Contract name and/or description of the export should be incorporated into the Subject header. Subject should also include agreement number, if applicable, and license number at a minimum.
• The name, nationality, address and principal place of business of the applicant or supplier. Note, all four items must be provided. Additionally, if the name of the applicant/supplier’s employer differs from the above, then this information, as well as the employer’s title must be provided.
• The name, nationality, address and principal place of business for each foreign purchaser, to include the ultimate end-user (to be identified as such). Again, if the name of the employer for any of these parties differs from the party itself, then this information, as well as the employer’s title must be provided.

Supplementary reports should contain:

• The amount of each payment, offer, or payment agreed upon. These entries should reflect the individual transactions, and not total or aggregate figures.
• The date or dates on which each reported amount was paid, or offered or agreed to be paid. This requirement applies to each entry made in response to the previous paragraph.
• The recipient of each such amount paid, or intended recipient if not yet paid. Reference item (b)(2) below for additional requirements.
• The person who paid, or offered or agreed to pay such amount.
• The aggregate amounts of political contributions and of fees or commission.
• With respect to each payment reported, state whether such payment was in cash or in kind. If in kind, it must include a description and valuation thereof. In the example matrix provided below, these data have been combined with the “Amount Paid or to be Paid” figure. Should a transaction be input as “paid in kind,” then the related description and valuation data should appear immediately following the entry.

With respect to each recipient, state its name, nationality, address and principal place of business, its employer and title, and its relationship, if any, to the applicant, supplier, or vendor, and to any foreign purchaser or end-user. For reasons of efficiency, these data may be merged with the response to (a)(4)(iii) above.

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