"Though we have acheived progress, our work is not over. That is why I support the mission of the Arms Control Association. It is, quite simply, the most effective and important organization working in the field today." 

– Larry Weiler
Former U.S.-Russian arms control negotiator
August 7, 2018
Defense Trade Treaties Stall in Congress

Jeff Abramson

Congress adjourned in October without acting on proposed defense trade treaties inked in 2007 with Australia and the United Kingdom. Other presidentially directed adjustments in how the Department of State administers defense trade did progress, with a new fee structure announced for license reviews.

On Sept. 17, Senate Foreign Relations Committee Chairman and Democratic vice presidential candidate Joseph Biden (Del.) and committee ranking member Sen. Richard Lugar (R-Ind.) delivered a letter to Secretary of State Condoleezza Rice indicating that the committee could not complete its review of treaties with London and Canberra this year. In 2007 the United States submitted to the Senate separate defense trade cooperation treaties with Australia and the United Kingdom that would create licensing exemptions for preapproved defense projects and firms. Proponents argued that the pacts would be especially helpful in developing and deploying counterterrorism technology by making it easier for members of the preapproved communities to work together. (See ACT, September and October 2007.)

The Senate panel heard testimony on the treaties May 21, during which both Biden and Lugar expressed concerns about a lack of detail on how the treaties would be implemented, including changes in the International Traffic in Arms Regulations (ITAR) that might be needed.

John Rood, acting undersecretary of state for arms control and international security, argued that the Senate should not need to review implementing procedures for the treaties. Instead, Rood suggested that the Senate should provide its advice and consent to the concepts outlined in the treaty and allow the administration to implement the treaties in a manner similar to how Congress passes a law and leaves it to the administration to promulgate regulations. Biden argued that the Senate should see more details because once it provided advice and consent, it could not then change the treaty.

In the Sept. 17 letter to Rice, Biden and Lugar indicated that they were still not satisified with how the treaties would be implemented. “While we support the objectives of these treaties…we have reluctantly concluded that there are too many unresolved questions in connection with the treaties to achieve their approval this year,” they wrote. The letter asserted that the delay was caused in part by late and frequently changing proposals for ITAR amendments submitted by the administration to clarify the committee’s implementation inquiries. Biden and Lugar promised to continue cooperation with the administration on the matter so that the committee can act “early” in the next Congress.

Meanwhile, the State Department made some changes to export control procedures governing arms sales. It announced a new fee structure Oct. 1 for entities engaged in the trade of certain defense articles and services. The change follows the mandate of a National Security Presidential Directive issued earlier this year aimed in part at expediting the export license approval process. (See ACT, March 2008.)

Under the presidential directive, the State Department’s Directorate of Defense Trade Controls (DDTC) is to be up to 75 percent self-financed. The State Department has been criticized for understaffing DDTC, which the House of Representatives sought to address in the Security Assistance and Arms Export Control Reform Act of 2008 that it sent to the Senate, but which the Senate failed to approve. Whether the new financing mechanism will support staffing increases remains to be seen.

The DDTC oversees direct commercial sales of items on the U.S. Munitions List and, prior to the new rules, required all persons or entities involved to pay a flat registration fee of less than $2,000. In the new system, all registrants will pay at least $2,250 per year, with those making multiple license applications paying a higher base amount and $250 per application fee in most cases.