ITAR Client Alert: New Conventional Arms Transfer Policy
In February 2023, the White House released a revised Conventional Arms Transfer (CAT) policy that gives increased emphasis on human rights when federal agencies review defense-related exports. Under the previous CAT policy, export review prioritized the economic security of the United States and the commercial interests of the defense industrial base when evaluating exports.
Now, U.S. agencies are directed to take a holistic approach to reviewing defense-related exports, which includes evaluating human rights. This new approach considers values, such as the recipient’s human-rights record, the extent of democratic governance, the quality of rule of law, and the likelihood of the items being used to violate international humanitarian norms.
The new CAT policy impacts all companies engaging in commercial sales of U.S.-origin defense-related items overseen by the U.S. Departments of State, Defense, and Commerce, including ITAR exports. In addition to commercial sales, this new CAT policy also applies to international security assistance and government-to-government transfers of ITAR-regulated items and services.
This revised policy comes amid surging defense exports. The U.S. Department of State reports that arms sales rose 49% to $205.6 billion in the latest fiscal year, indicating that the broader economic outlook for private companies exporting defense-related items remains bright.