The U.S. Department of State has finalized an increase in International Traffic in Arms Regulations (“ITAR”) registration fees, with the higher rates effective January 2025, pursuant to a final rule issued on December 10.
The Directorate of Defense Trade Controls (“DDTC”) stated: “This increase is necessary because DDTC’s operations are primarily funded by fees. Without sufficient growth to meet operating costs that have increased significantly since 2008, DDTC will face difficulty sustaining budget deficit and was forced to reduce its services.
The new three-tier structure increases the base fee for Tier 1 enrollees to $3,000 per year, an increase of 33.1%. Level 2 registrants will pay $4,000, while Level 3 registration fees will be calculated as “$4,000 plus $1,100 multiplied by the total number of more than five favorable decisions.”
The department said it recognizes and understands the concerns raised by stakeholders commenting on the new rule and announced a one-year initiative to allow eligible Tier 1 registrants to spend $3,000 on expenses exceeding 1% of their gross income. Apply for a $500 discount. DDTC expects the new fee structure to generate approximately $67.2 million in annual revenue, up from $33.8 million in fiscal 2023, to support its projected $60 million operating budget and cover “contract labor support, IT services, personnel payroll, field exhibitions and travel.”
The rule states, “The Department has concluded that Tier 3 registrants benefit most from, and are best positioned to benefit from, DDTC improvements, specifically the Defense Export Control and Compliance System (DECCS) and customer service improvements. Contribution to export derived income” states.
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