Standard Licensing

Controls on Proposals

  Anyone meeting with foreign persons needs to understand the ITAR definition of a "proposal" to sell SME. Providing a proposal may require an export license or prior notification to DTC. SME proposals are defined by the ITAR (Section 126.8(b)). "The communication of information in sufficient detail that the person communicating that information knows or should know that it would permit an intended purchaser to decide either to acquire the particular equipment" by export license or agreement (TAA or MLA). As discussed earlier, it is important to understand if your business deal requires prior approval or notification before you undertake the effort. Consider the State Department definition that says you have made a proposal if someone can decide they want to purchase your product. Simple marketing may be going too far in some situations.

What exactly are we talking about when we warn that prior approval on proposals must be obtained? The conditions above outline the U.S. Department of State Requirements on when something must be pre-notified. The value and the end user country are the two biggest factors. If your sale does not involve high dollar values or a country outside of NATO, Australia, New Zealand, South Korea or Japan then you will most likely not meet the requirements for having to do prior notification or authorization.

The safest path is to always discuss with your compliance professional. They will know the correct thresholds and if the countries that are currently waived have changed. Country authorizations will change with U.S. Foreign Policy, so it is important to be aware of current Foreign and National Security Policies when considering doing business with a foreign party.