- "The Song Remains the Same" - DFARS Removes and Replaces Restrictions on Export Controls
- July 24, 2013 | Author: David S. Gallacher
- Law Firm: Sheppard, Mullin, Richter & Hampton LLP - Washington Office
Earlier this month, we wrote about a new proposed rule from the Department of Energy imposing new and onerous requirements relating to compliance with the U.S. export control laws. DOE claimed that this proposed rule was modeled on a prior rule included in the Department of Defense Federal Acquisition Regulation Supplement (DFARS) at DFARS Subpart 204.73 and DFARS 252.204-7008, promulgated originally in 2008 (and discussed here). But be aware that those DFARS rules were recently removed. Kind of. In case you were not paying attention, the DFARS export restrictions were recently moved to DFARS Subpart 225.79 and DFARS 252.225-7048. See 78 Fed. Reg. 36108. So, even though the citations may have changed, the song remains the same.
Since 2011, DOD and other agencies have been trying to implement trade cooperation treaties between the United States, the United Kingdom and Australia. While the treaties were originally signed in 2007, they were not ratified by the U.S. Senate until 2010. Rulemakings by the DOD and Department of State to amend the DFARS and to update the International Traffic in Arms Regulations (ITAR) eventually followed. The main purpose of the treaties was to streamline export restrictions between the countries by facilitating unlicensed exports of defense articles and technical data.
The DFARS was amended in 2012 via an interim rule to implement the treaties, adding DFARS Subpart 225.79, Export Controls - which was different from DFARS Subpart 204.73, Export-Controlled Items, which was added in 2008. Recognizing, we suppose, that there is some inevitable overlap between these two subsections, the DFARS has tried to simplify things a bit through consolidation - first, by rescinding Subpart 204.73 (as well as the contract clause at 252.204-7008), and second, by combining the export-related requirements in DFARS Subpart 225.79 (which is probably a better fit, logically speaking, given how the DFARS is organized). The new contract clauses can be found at 252.225-7046 and 252.225-7047 (implementing the UK and Australian treaties), and the new ubiquitous 252.225-7048, Export-Controlled Items (replacing the now defunct 252.204-7008 and requiring Defense contractors to comply with U.S. export laws as one of the many terms and conditions under their contract).
What does this mean to you? In the end, not much. But, if you find yourself looking through the DFARS, and you see that the export-control clause in your contract, 252.204-7008, has been removed from the regulations, please do not get your hopes up. It has not gone away; it has just moved to a new home. You still have to comply with the export laws. Sorry.