TECHNOLOGY TRANSFER / EXPORT CONTROL

U.S. defense company sales of defense articles and services are controlled by the Arms Export Control Act; its implementing regulations require an export license for every transaction, except where specific exemptions have been granted.  

DoD Instruction 2040.02 defines “articles” as “any articles, materials, supplies, or manufactured products, including inspection and test equipment. This includes all commodities and products considered as ‘munitions’ and governed by the Department of State’s International Traffic and Arms Regulations (ITAR), as well as all “dual use” commodities and products governed by the Bureau of Industry and Security within the Department of Commerce.

Often, foreign governments seek to produce part or all of the U.S.-developed defense equipment. Generally speaking, U.S. defense companies accommodate co-production with appropriate licenses to the foreign governments or foreign firms. Such licenses also require U.S. Government approval through the export licensing process. In some cases, the DoD transfers through FMS technical data packages that relate to such licensed coproduction programs.