ITAR Registration Fee Increase Update

After over 15 years of maintaining the same fee structure for International Traffic in Arms Regulations (ITAR) registration, the U.S. State Department has proposed amendments to increase the fees required for Directorate of Defense Trade Controls (DDTC) enrollment. As a reminder, the export regulations require registration for those engaged in manufacturing, exporting, temporarily importing, or brokering of any defense articles or services.

Formerly, there was a registration fee update back in 2008, with the previous changes occurring in 2004, 1997 and 1985. Currently, the proposed rule is seeking final interagency review and DDTC already published it for public comment last month.

Some may wonder why the increase in cost, especially those new to international trade and complying with the ITAR.  Overall, the increase makes sense from the government’s perspective based on growing DDTC operational costs and to support enhancements for the provided services. There is already a tiered approach to fees with the revisions to Tier 1 and 2 related to inflation.  However, the revisions to Tier 3 include not only the inflation cost, but also because Tier 3 registrants receive greater benefits from recent DDTC improvements.  Specifically, the Defense Export Control and Compliance System (DECCS), the online system developed to replace existing platforms (DETRA, DTRADE, EFS, ELLIE and MARY) to provide users access to several DDTC applications through a single, cloud-based portal.  Currently, DECCS is utilized for Registration, Licensing, Advisory Opinions and Commodity Jurisdiction applications with Disclosures on the horizon.  DECCS produces export-derived revenue through approved export license applications. For example, in 2022, DDTC issued authorizations valued at just over $153.7 billion (from over 22,000 license applications).

Increased Fees and Revised Tier Criteria:

Tier 1: From $2,250 to $3,000 ($750 increase)

This applies to first-time registrants and renewals for those that had not received approvals from DDTC during the twelve-month period ending 90 days prior to the expiration of their current registration (note – Registrations are valid for 1 calendar year). It also applies to brokers, regardless of the authorizations submitted or determinations received.

Tier 2:  From $2,750 to $4,000 ($1,250 increase)

This applies to registration renewals of those that have received five or fewer approvals in the twelve-month period ending 90 days before their current registration expires.

Tier 3: From a base fee of $2,750 to $4,000 ($1,250 increase) with an additional charge of $1,110 for each approval beyond the initial five.

This applies to renewals who have received more than five approvals in a twelve-month period ending 90 days before their current registration expires.

Ultimately, the takeaway from the increase in fees is that inflation affects everyone – even the US Government!  All joking aside, like with all things compliance-related, raising the fees is a reminder that exporting is a privilege while emphasizing the magnitude of the significance of registration and licensing procedures for those participating in ITAR work. Stay tuned as more information becomes available.

Do you need more help in determining if ITAR applies to your business? Schedule a no-charge consultation with one of our team members today.