Today, the United States Government has released its proposal for the much-anticipated ITAR Exemption for Australia. This exemption is a once-in-a-generation step-change for Australian-United States defence industrial base collaboration and cooperation.
The aim of the exemption is to alleviate the common regulatory challenges associated with defence capability collaboration and technology sharing between the AUKUS countries. In doing so, it supports the AUKUS countries in efforts of deterrence, especially in greater power contested areas like the Indo-Pacific, through technological advantage.
According to the interim rule published today by the United States Department of State on the United States Federal Register:
"the exemption is designed to foster defense trade and cooperation between and among the United States and two of its closest allies. It is reflective of our nations’ collective commitment to implement shared security standards on protecting defense technology and sensitive military know-how.
The Department proposes to amend the ITAR to include an exemption to the requirement to obtain a license or other approval from the Department’s Directorate of Defense Trade Controls (DDTC) prior to any export, reexport, retransfer, or temporary import of defense articles; the performance of defense services; or engagement in brokering activities between or among authorized users within Australia, the United Kingdom, and the United States. The Department also proposes to add a list of defense articles and defense services excluded from eligibility for transfer under the proposed new exemption; add to the scope of the exemption for intra-company, intra-organization, and intra-governmental transfers to allow for the transfer of classified defense articles to certain dual nationals who are authorized users or regular employees of an authorized user within the United Kingdom and Australia; and revise the section on expediting license review applications by referencing new processes for Australia, the United Kingdom, and Canada."
The exemption as anticipated to be published on 19 April, to coincide with the United States NDAA FY24 legislated time. Its late publication, several days after the promised date, in no way affects its efficacy and practical value for the Australian defence and R&D industry. In fact, it appears to deliver what was promised – a majority licence free defence trade environment for the AUKUS partners.
While ECAG will undertake comprehensive analysis of the exemption in due course, the critical aspects of it are listed below:
Initial export, re-export, re-transfer, brokering and services are eligible under the proposed exemption
An intra-company and intra-governmental dual-national screening option will be available
there will also be a mechanism for self-screening access for dual-nationals holding security clearances at the level of secret and above, including proscribed country dual-nationals.
There will be an Excluded Technologies List, made up of only the most sensitive defence and advanced technologies, such as those on the MCTR.
Despite the Excluded Technologies List, the vast majority of defence technology and goods are eligible under the exemption.
ECAG welcomes this Australian ITAR exemption and recognises the hard work and dedication of AUKUS country officials and industry stakeholders to make it a reality.
Australian Government officials will also be presenting on the exemption next week at this Conference, and in the following weeks embarking on a national roadshow with AUKUS partners to support Australian industry understand and maximise opportunities under the new exemption.
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ECAG stands by to bring more information and insights in the coming days and weeks.