TradePost Archives > October 1, 2008 > this article

New higher registration fees for exporters of defense items

September 25, 2008
World Trade\Interactive

Exporters of defense articles or services who are required to register with the State Department’s Directorate of Defense Trade Controls will face higher annual registration fees beginning Sept. 25. State has issued a final rule amending the International Traffic in Arms Regulations to adopt the following three-tier registration fee schedule. It should be noted that these fees are based on the number of license applications acted upon by the DDTC, not the number submitted by the registrant as had been proposed.

• Registrants who are renewing a registration and for whom the DDTC has not reviewed, adjudicated or issued a response to any license applications during the 12-month period ending 90 days prior to the expiration of their current registration (the 12-month period) will pay a registration fee of $2,250. This fee will also apply to those registering for the first time.

• Registrants for whom the DDTC has reviewed, adjudicated or issued a response to between one and ten license applications during the 12-month period will pay a registration fee of $2,750.

• Registrants for whom the DDTC has reviewed, adjudicated or issued a response to more than ten license applications during the 12-month period will pay a registration fee of $2,750 plus an additional fee that will be determined by multiplying $250 times the number of applications over ten on which the DDTC has acted during the 12-month period.

For each registrant, registration fees will be capped at three percent of the total value of license applications the DDTC has reviewed, adjudicated or issued a response to during the 12-month period or $2,750, whichever is greater. Fees for universities and other income tax-exempt registrants may be reduced to $2,250 provided that proof of such status is submitted with the registration package.

State notes that it received a number of comments opposing either the registration fee increase specifically or the collection of such fees in general (see the Sept. 4 issue of WorldTrade\INTERACTIVE for details on some of these concerns). In response to those comments, the department states that:

• this rule does not address recommendations for actions that could be taken by the DDTC to reduce its licensing workload, although the DDTC will review its budgetary requirements on a regular basis as it continues to reform the export control process, which could result in revised registration fees in the future;

• ten alternate funding schedules for registration fees were suggested but none were accepted;

• it will contemplate reconsidering multi-year registrations, which have been discontinued, after it has experience with a single-year fee structure;

• only those registration packages that are materially incomplete will be returned;

• license amendments have a material impact on the authorized activity and require the DDTC to review, adjudicate and respond to the applicant and will therefore be counted when determining the registration fee;

• activities not requiring the DDTC to respond to the applicant (e.g., annual submission of sales reports, prior notifications, provision of documents required by proviso and submission of purchase orders to support offshore procurement) will not be counted as part of the registration fee;

• certain activities that require the DDTC to respond to the applicant (e.g., commodity jurisdictions and disclosures) will not be counted in determining registration fees; and

• denied licenses will not be considered when determining registration fees.