Marking and records for treaty exports

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1. Every item carries the treaty

Under the International Traffic in Arms Regulations (ITAR), treaty items must be marked before they move. That covers every defense article and service exported under a Defense Trade Cooperation Treaty, or moved onto one from a license (22 CFR 126.16(j)(1)). Classified items carry their classification level with the treaty release line. For Australia the regulation’s example for Secret items is "//SECRET USML//REL AUS and USA Treaty Community//" (22 CFR 126.16(j)(1)(i)). Unclassified items are handled in the partner country as "Restricted USML" and marked accordingly (22 CFR 126.16(j)(1)(ii)). The British section uses the same format with its own release line (22 CFR 126.17(j)(1)).

When items come back to an American community member, the restricted marking on unclassified items is removed, and they are treated as unclassified again (22 CFR 126.16(j)(2)). The communities and end uses are set out in how the defense trade treaties work.

2. How marking is done

Articles other than technical data are labeled individually (22 CFR 126.16(j)(3)(i)). Where labeling is impracticable, as with propellants or chemicals, documents such as contracts or invoices must clearly link the articles to the marking. Technical data in any form, including data packages, manuals, presentations and reports, physical, oral or electronic, is labeled individually too (22 CFR 126.16(j)(3)(ii)). Where that is impractical, documents or a verbal notice must link it to the marking. Defense services travel with documents, such as contracts, invoices or bills of lading, clearly labeled with the marking (22 CFR 126.16(j)(4)).

Shipping papers carry a fixed statement (22 CFR 126.16(j)(5)). The exporter must make it part of the bill of lading and the invoice whenever articles are exported. It says the items are authorized under the treaty for export only to the partner country, for approved projects, programs or operations by community members. It adds that they may not be retransferred, reexported or used outside an approved activity, in original form or built into other items, without the State Department’s prior written approval. The British version names the United Kingdom and its community instead, with otherwise identical wording (22 CFR 126.17(j)(5)).

3. Five years of records

Authorized exporters must keep detailed records of treaty exports, imports and transfers, and of any reexports and retransfers approved or otherwise authorized by the Directorate of Defense Trade Controls (DDTC) (22 CFR 126.16(l)(1)). Records are kept for at least five years from the date of each transaction. They must be available to DDTC or its designee, such as the Diplomatic Security Service, and to immigration and customs authorities. Electronic records must be reproducible on paper, legibly and readably.

Record keeping is not only the exporter’s job. An export qualifies only if the required documents are kept by both the exporter and the recipient, and are available when the government asks (22 CFR 126.16(a)(3)(vi)). The same applies to the transferor and transferee whenever a treaty item moves within the community (22 CFR 126.16(a)(4)(v)).

The regulation lists seventeen items each record must hold (22 CFR 126.16(l)(1)). They include the port, date and method of export, the commodity code and description, the value, and the treaty justification. The end user and end use, every American and foreign party, the marking and the classification are also recorded. So are all correspondence with the government, details of any fees, commissions or political contributions, the purchase order or contract, and the technical data actually exported. The transaction number of the electronic export filing, all shipping documents and the exporter’s registration statement complete the list.

4. Filing the export

Every exporter of articles under a treaty must file Electronic Export Information through the customs electronic system, citing one of four codes for each shipment (22 CFR 126.16(l)(2)). Each code matches an authorized end use. Shipments for combined operations, cooperative programs or agreed projects must also name or describe the operation, program or project. Shipments for American government end use must give the contract or solicitation number. They must meet the ordinary filing rules for exports and defense services in section 123.22. The British section uses the same scheme with its own section number (22 CFR 126.17(l)(2)).

5. Fees and commissions

Payments to agents are reported. Where a contract is worth $500,000 or more, authorized exporters must send DDTC a statement on fees, commissions and political contributions for each treaty export, transfer, reexport or retransfer. The statement contains the information part 130 requires (22 CFR 126.16(m)). That reporting rule is covered in reporting fees, commissions and political contributions.

6. Notice to Congress

Some treaty exports must wait for Congress (22 CFR 126.16(o)(1)). An export may not take place until 30 days after DDTC acknowledges the exporter’s written notice, if it involves any of four things. They are a contract for major defense equipment of $25 million or more, or for defense articles and services of $100 million or more. They also include a contract for Category I firearms of $1 million or more, and any contract to manufacture significant military equipment abroad, whatever its value. An amended contract that meets one of these tests counts as well.

The notice gives the item and model number, a general description, the Munitions List category, the value and the quantity (22 CFR 126.16(o)(2)). It comes with the part 130 information, a statement on any offset agreement, and a copy of the signed contract. For firearms, it says what will happen to the weapons in the inventory, such as sale, reassignment or destruction. The 30 days run from DDTC’s acknowledgment of the notice, not from when it is sent. The State Department then notifies Congress (22 CFR 126.16(o)(3)). The British section sets the same thresholds and required content (22 CFR 126.17(o)).

Key terms

Treaty marking	The classification and release line every treaty item must carry before it moves.
Restricted USML	The handling level for unclassified treaty items in the partner country.
Bill of lading statement	The fixed wording on shipping papers limiting use and onward transfer.
Electronic Export Information	The export filing that cites the treaty end use code for each shipment.
Legislative notification	The written notice that holds a large treaty export for 30 days.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

Paperwork and physical custody have to match from origin to end user. Sentfore works at the delivery end of defense programs in difficult environments, providing secure movement, protective security, facilities and life support. Requirements can be sent through the contact page.