Major Kris Eggehorn Agreements Analyst Directorate of Defense Trade Controls Licensing

1. U.S. Department of State Electronic AgreementsConcepts and Processes Major Kris Eggehorn Agreements Analyst Directorate of Defense Trade Controls Licensing

2. Purpose Provide an Introduction to the Electronic Agreements Process

3. Agenda • Overview • Summary of Changes • Benefits • Preparation and Submission • Agreements • Required Entries • Amendments/Re-Baselines • Required Entries • Example Submission • Approvals – What to Expect • Post Approval Actions • Current Trends

4. Overview • Directed by NSPD 56 –January 22, 2008 (Provide a means for industry to submit agreement proposals electronically) • Utilizes the D-Trade 2 System to submit proposals • Therefore, available to only those companies with digital certificates • Submission accomplished on a DSP-5 application • Serves only as a vehicle for transitioning the proposal throughout the process • Attached Transmittal Letter and Agreement/Amendment is still the primary focus of review by the Agreements Officer • Issuance of the DSP-5 vehicle is simply the mechanism for providing the DDTC position on the agreement and not an authorization

5. Overview (cont) • The following statement will be applied to all agreements adjudicated through the electronic process: • “The issuance of the subject DSP-5 does not grant any export rights or privileges, and its related DSP-5 case number may not be cited as an authorization or used as the basis for an exemption.” • “The Department of State approves the proposed agreement/ amendment as attached subject to the following limitations, provisos and requirements. The agreement or amendment may not enter into force until the agreement/amendment has been signed and the stated requirements have been satisfied.”

6. Summary of Changes Overview (cont) • Case “ID-of-Record” 9-digits vice 6-digits • Sequential amendments to have unrelated ID’s, but searchable • Check status on Ellie and Elisa Net using 9-digit DSP-5 number • Attachments provided during initial submission restricted to 35 MB in total size • If size of all files combined exceeds 35 MB, then upload Transmittal Letter, Proposed Agreement, Certification Letter and Positive Part 130 only on initial submission • Additional supporting documents to be uploaded after 9-digit ID applied • Keep attachments to the agreement/amendment within the same pdf document

7. Overview (cont) Summary of Changes • Separate Certification Letter no longer required • Provided DSP-5 vehicle is certified by the Empowered Official • …And no previous violations • Separate Approval Letter no longer issued by DDTC • Revised and classified letters are the exception • Amendments must be submitted as “complete/conformed” documents • Bold Changes • Address summary of changes in proposed amendment “Whereas Clauses” • Minor amendments do not need to be conformed and are loaded into the most recently approved case

8. Summary of Changes Overview (cont) • First-time submissions in D-Trade 2 must be Re-baselined • Required to establish DTC baseline of provisos • Only electronic agreements will be eligible for electronic amendments • Approvals cite all active/current provisos • If revised, annotated in Bold; states “Revised” in parenthesis • No longer relevant – states “Proviso Rescinded” in parenthesis • Proviso Reconsiderations Submitted as Major Amendments • Complete DSP-5 Vehicle required • Attachments consist of the same documents currently required for a paper reconsideration, i.e., General Correspondence Letter and 126.13 Certification Letter, if applicable

9. Benefits Overview (cont) • Reduced processing time • Submission • Adjudication Processing • Issuance • Elimination of hard-copy approval letters • Revised and Classified Letters are the exception • Eliminates: • “3:00 pick-ups” • “15-or-more party” disks • Reduces “Paper Copy” processing costs (Toner, paper, Fed Ex costs, binder clips, etc.)

10. Overview (cont) Benefits • Minimizes risk of “lost” cases (“I don’t see my case in DETRA yet—sent it in over a month ago…”) • Provides all active/current provisos for amendments (Reduces potential for conflicting guidance) • Option to upload data after-the-fact • During Adjudication – Additional supporting documentation; Missing documentation • After Approval – Executed Copies, Notification of Initial Export; Minor Amendments; Sales Reports; DSP-83s, etc.

11. Preparation and Submission Agreements

12. Preparation and Submission (cont) Agreements

13. Preparation and Submission (cont) Agreements

14. Preparation and Submission (cont) Agreements

15. Preparation and Submission (cont) Agreements

16. Preparation and Submission Amendments/Re-Baselines

17. Preparation and Submission (cont) Amendments/Re-Baselines

18. Preparation and Submission (cont) Amendments/Re-Baselines

19. Preparation and Submission (cont) Amendments/Re-Baselines

20. Preparation and Submission (cont) Amendments/Re-Baselines

21. Example DSP-5 Vehicle • AFAS Technical Assistance Agreement • Related to the sale of the “Search and Finder” Radar for the Australian DOD • Includes request for TCNs and Sublicensees • Transmittal Letter and Agreement completed as normal • Open up DSP-5 on our website http://www.pmddtc.state.gov/

22. Example DSP-5 Vehicle (cont)

23. Example DSP-5 Vehicle (cont)

24. Example DSP-5 Vehicle (cont)

25. Example DSP-5 Vehicle (cont)

26. Example DSP-5 Vehicle (cont) Additional Commodities Additional Documentation to be Uploaded 2 1 1 Remember 35 MB Total Document Size Limit

27. Example DSP-5 Vehicle (cont) List all Foreign Licensees to the Agreement - Click on Add to include more List all Sublicensees - Click on Add to include more. If no sublicensees, enter “No Sublicensees” in the name block, with “none” or “N/A” in the address blocks, and the primary foreign country of the transaction in the country box List all Third Country/ Dual Nationals/Sales/Distribution/ Marketing Territory here. DO NOT list 124.16 countries here, but include these countries in Block 20 List all U.S. Signatories. If only you, check “Same as Block 5” U.S. Sublicensees and U.S. End Users do not need to be identified in DSP-5 Concise Narrative of agreement to include 124.16 TCN requests

28. Example DSP-5 Vehicle (cont) Almost Done! Check the appropriate 126.13 statement Check the appropriate Part 130 statement Digitally signed by an Empowered Official Upload any additional documents as necessary after you receive your nine-digit DSP-5 ID number. Remember to let us know in the Commodity field.

29. Approvals – What to Expect • DSP-5 valid for 48 months • Disregard DSP-5 validity date—it is just the vehicle. Proviso #1 addresses the agreement duration • Revised Preamble to approval letter • If classified or congressionally notified, permanently retained proviso is identified in preamble • Approvals cite all active/current provisos • If revised, annotated in Bold; states “Revised” in parenthesis • No longer relevant – states “Proviso Rescinded” in parenthesis • Actions completed from previous proviso direction will be changed to “Complied With”

30. Post Approval Actions • Read the Provisos and ensure they are adhered to! • Problem with provisos? • Call the Agreement Officer • Contact the Response Team • Submit a Proviso Reconsideration Request • Proceed with Execution • Post-approval documents uploaded to D-Trade 2 • Executed agreements/amendments; Termination letters; Minor amendments; Sales reports; DSP-83s, etc. • If it’s not there, you didn’t provide it!

31. Current Trends • Most common issues: • Failure to add “AG-” to Trans-ID upon submission • Result – Up to five day delay in processing • Failure to include all Foreign Signatories or Foreign Sub-licensees in Blocks 14 and 16 (Foreign End Users and Foreign Consignees) • Result – Applicant directed to remove parties • Failure to address third country nationals, sales territories, marketing territories in Block 18 (Foreign Intermediate Consignees) • Result – May result in direction to remove • Incorrectly identifying uploaded documents in accordance with Sections 17.1, 17.2 of the Guidelines • Result – Slows down DDTC review

32. Way Ahead • September 1, 2010 – Projected date for elimination of paper agreement/amendment submissions • Electronic agreement submissions only • What do you need to do? • Get your Digital Certificate NOW! • Submit one to make sure it clears DDTC before submitting more!