DDTC Introduces New Electronic License Reporting Requirements

by: Derrick Kyle, Associate

It is easy to think of the various U.S. government agencies with trade control responsibilities as operating entirely separate from one another. Often, that can be the case. Industry professionals have learned through the process of Export Control Reform that many trade procedures are not at all synchronized amongst the respective agencies. A final rule published by the Department of State this year serves as a reminder that, in many ways, certain functions of the various trade agencies are inextricably linked, and these agencies rely on one another to perform certain tasks.

The final rule, published on January 3, 2017, amends the International Traffic in Arms Regulations (“ITAR”) to enable U.S. Customs and Border Protection (“Customs” or “CBP”) to implement the International Trade Data System (“ITDS”).[1] ITDS is an interagency submission system created pursuant to the Security and Accountability for Every Port Act of 2006 (“SAFE Port Act”). Implementing ITDS constitutes a shift in the way the Department of State Directorate of Defense Trade Controls (“DDTC”) will process imports and exports that are made pursuant to a DDTC license. For example, before ITDS, the re-importation of a repaired defense article originally exported for repair abroad under a DDTC license would require notification by the license-holder to both CBP and DDTC. With ITDS, the license-holder inputs data relevant to DDTC in CBP’s system, eliminating the need for a redundant notification.

Specifically, submission via ITDS relates to the endorsement and decrementation by CBP of the five types of DDTC licenses: DSP-5 (permanent export), DSP-73 (temporary export), DSP-61 (temporary import), DSP-85 (classified transactions), and DSP-94 (goods controlled under the Foreign Military Sales program). License exemption claims are also submitted through ITDS. Within ITDS, the actual electronic submission is conducted through the DDTC Partner Government Agency (“PGA”) message set. A CBP Notice published on January 11, 2017, provided important information regarding the actual entry of information for submission: “the PGA message set can only accept the data for one DDTC license or license exemption per one commodity line on the entry. That commodity line’s entered value will be used as the DDTC endorsement value. So filers are required to ‘split the commodity entry line’ to associate a single entry line with a single license whose entered value will represent the DDTC value” [emphasis in original].[2]

The new procedures related to implementation of the ITDS will most noticeably affect the processing of DSP-61 and DSP-73 licenses, i.e., licenses that involve the import of defense articles. The amended ITAR no longer require physical, paper DSP-61 or DSP-73 licenses to be presented to CBP officers for decrementation at the time of import. Additionally, in the event that a DSP-61 or DSP-73 license was issued before the publication of the final rule, CBP requests that the license-holder submit a letter to Mr. Robert Rawls, CBP Outbound Enforcement and Policy Branch Chief, providing the following information: the license number, the total value of all prior import shipments incremented against the license, and the date when this information was recorded.[3] Mr. Rawls can be reached via email at

Importantly, if an import pursuant to a DSP-61 or DSP-73 is made without submitting the required information in ITDS, then a correction can be made within 10 days of entry. However, if entry occurred more than 10 days before discovery of the error, the license-holder should consider submitting a voluntary self-disclosure (“VSD”) to DDTC disclosing the error, which would constitute a violation of the ITAR rules concerning the proper processing of imports subject to a DDTC license. After submission of an initial VSD, the license-holder should contact CBP to correct the error within the ITDS. The point of contact at CBP for these corrections is also Mr. Rawls. Questions about the new policy can be directed to Mr. Rawls, via email at, or phone at (202) 344-2847.

If you require assistance understanding or conforming to these new electronic reporting requirements, or if you discover a related error that may require disclosure via the VSD process, please do not hesitate to contact us.


[1] International Traffic in Arms Regulations, International Data System, Reporting, 82 Fed. Reg. 15 (Jan. 3, 2017) (to be codified at 22 C.F.R. pts. 120, 133, and 126).

[2]Pipeline – Department of State Import and Export Electronic Filings for Licenses and License Exemptions, U.S. Customs and Border Protection (Jan. 11, 2017), available at

[3] Id.