Res Communis

by P.J. Blount with the blog faculty

The Directorate of Defense Trade Controls has issued a new set of GUIDELINES FOR PREPARING AGREEMENTS: Technical Assistance Agreements, Manufacturing License Agreements, and Warehouse and Distribution Agreements.

Of note in the document is the Canadian exemption for dual nationals, which applies to the Canadian Space Agency (pg. 19):

Canada. The State Department has concluded an arrangement with the Canadian Department of National Defense (DND), Canadian Communications Security Establishment (CSE), the Canadian Space Agency (CSA), and The National Research Council Canada (NRC) with respect to access to ITAR items by Canadian citizens who are dual nationals. These agencies have agreed to restrict access to ITAR controlled items to its employees who are issued a minimum SECRET-level security clearance by the Canadian Government. They further intend to ensure SECRET-level security clearances are not granted to personnel with ties to known terrorist groups or who maintain significant ties to foreign countries, including those countries to which exports and sales of ITAR controlled defense articles and services are prohibited.

And an entire section on Special Considerations for Space-related TAAs (pg. 63-65 – this has been cut and pasted from a word document so some formatting has been lost):

11.0 Special Consideration for Space-Related Insurance TAAs

The purpose of this section is to discuss the special considerations and allowances made for technical assistance agreements (TAA) involving arbitration matters.

11.1. General Guidance

a. The Technical Assistance Agreement for the provision of technical data/defense services for the purposes of securing satellite or launch insurance permits applicants to conduct meetings with customers regarding insurance concerns on previous and/or potential anomalies that have occurred or could significantly impact product lines. This type of agreement allows applicants to transfer technical data, provide direct answers to technical questions, and discuss with insurers what they can expect regarding system performance during the life of a satellite or during the operation of a launch vehicle.

b. While the format of space-related insurance case submissions is relatively unchanged from those of the standard agreement and amendment applications (see Sections 5.0 and 6.0, respectively), DTCL grants special provisions for these efforts provided they meet certain conditions. These provisions incorporate an “incremental signature” exception—also known as a “rolling signature”–which permits the applicant to execute transfers to insurance parties as they sign, rather than wait until all parties have concluded the agreement.

c. The following is an example of a DTCL agreement proviso that permits certain parties within an Insurance agreement to sign incrementally:

“Export or temporary import of hardware, software, technical data or defense services against this agreement may only take place between signatories at such time as the agreement/amendment has been signed in accordance with the criteria established in Section 11.3 of the Guidelines for Preparing Agreements. In accordance with §124.4(a), submit one copy of the signed agreement/amendment, revised as may be required herein, to this office within 30 days from the date it is signed. As additional signatures are secured, a copy of the signature page is required within 30 days of signature.”

Note: Under this exception, all Major parties (see Section 11.2) must still sign the agreement prior to commencement of insurance-related activities, but parties authorized to sign incrementally need only sign prior to receiving defense services or technical data.

11.2. Parties to Insurance-Related Agreements

Similar to arbitration-related agreements, insurance-related TAAs comprise two separate “classes” of signatories: Major Parties and insurance providers.

a. Major Parties comprise the applicant and any U.S. signatories or foreign licensees who do not qualify as insurance providers. Examples of Major Parties include launch providers, manufacturers and their subcontractors, and purchasers and their subcontractors.

b. Conversely, the insurance provider category, which typically comprises the balance of the parties represented in a given insurance-related agreement, is limited to underwriters, insurance brokers, and their consultants.

Category Signature Status
a. Major Parties
Applicant Must sign
U.S. Signatories Must sign
Foreign Licensees Must sign
Sublicensees No signature
b. Insurance Providers
Underwriters Signs incrementally
Insurance Brokers Signs incrementally
Consultants Signs incrementally
Table 11.1 Signature Rules by Party

11.3 Signature Requirements (Incremental and Non-Incremental)

a. For base agreements, the applicant, and all U.S. and foreign parties (other than those deemed insurance providers and sub-licensees) must sign to formally “conclude” the document. Once these signatures are obtained, exports may be transferred between and among those parties who have signed the agreement as well as any authorized sub-licensees. All other potential signatories (i.e. underwriters, brokers, and consultants) may sign incrementally without further DTCL approval. However, these signatures must be received prior to the “new part(ies)” receiving any technical data or defense services identified in the agreement. Note: upon obtaining each new signature of a previously authorized party, the applicant must provide DTCL a copy of the signature page plus a cover letter identifying all of the current signatories within 30 days.

b. For amendments to Insurance-related agreements, the following apply:

(1) As a general rule, only amendments which change the scope of the effort or modify (i.e., add or delete) Major Parties must be signed by all currently-signed parties. Former parties, whose participation in the effort has been terminated, are not affected. Note: The rules for obtaining incremental signatures, as identified in Section 11.3a above, apply.

(2) Amendments that only add or change the name or address of a foreign person need only be signed by all Major Parties and that subject foreign person.
11.4 Restrictions

The following restrictions apply to Arbitration-related agreements:

a. Insurance parties must represent countries other than those prhibited in §126.1.

b. Defense services (e.g., technical data and /or technical assistance interchange) between or among the insurance parties (except as specifically authorized in the agreement) is prohibited.

11.5. Structure of Agreement Supplemental Material

a. Given the significant distinctions among the various parties of a space-related insurance TAA, the supplemental documents for these agreements should be arranged as follows:

- Attachment A – Technical Data /Defense Services
- Attachment B – Statement of Work
- Attachment C – Insurance Providers

where parties listed in Attachment C should be numbered and include the following data:

- Name
- Country
- Full address
- Role specifics, if warranted

11.6. Other Considerations

Insurance-related agreements generally involve the participation or potential participation of numerous parties, Major Parties, and providers. As a result, in accordance with the packaging rules laid out in Section 17, the applicant should include with each submission a CD-ROM bearing the names, addresses, and countries of each party.