US, UK, Australia Simplify Defense Item Trade Exemptions
Published Date: 12/30/2025
Rule
Summary
Starting December 30, 2025, defense companies in the U.S., Australia, and the UK can trade certain military items more easily without needing special licenses. This new rule cuts red tape, speeds up cooperation, and supports the President’s goal to make defense sales faster and simpler. Exporters will save time and effort, boosting teamwork among these close allies.
Analyzed Economic Effects
6 provisions identified: 5 benefits, 1 costs, 0 mixed.
New AUK–UK–US ITAR Exemption
Starting December 30, 2025, no license or other approval is required under the ITAR for the export, reexport, retransfer, or temporary import of certain defense articles, defense services, or brokering activities between or among Authorized Users located within the physical territory of Australia, the United Kingdom, and the United States, provided the exemption's requirements and limitations are met.
Excluded Technology List Restricts Some Transfers
The rule creates an Excluded Technology List (ETL) listing defense articles and services that are ineligible for the Sec. 126.7 exemption; the Department assessed that about 18% of licensing requests for Australia and the United Kingdom would not be eligible for transfer under the exemption because of the ETL. The ETL will be reviewed annually for the first five years and any future changes will be published in the Federal Register.
Expedited License Processing for Allies
The Department formalized expedited license processing under ITAR Sec. 126.15 for exports to Australia, the United Kingdom, and Canada; statute-established adjudication timeframes of 30 days and 45 days apply per the National Defense Authorization Act for Fiscal Year 2024. The Department also notes it began expediting adjudications for Australia and the United Kingdom on September 1, 2024 and has an average processing time of 16.6 days for certain expedited requests it monitored.
Classified Transfers to Certain Dual Nationals
The Department added ITAR Sec. 126.18(e) allowing transfers of classified defense articles to dual nationals who are citizens of the United Kingdom or Australia and another country, provided all relevant exemption criteria are met; for Sec. 126.18(e) a qualifying UK or Australian dual national must hold a security clearance approved by Australia, the United Kingdom, or the United States that is equivalent to the U.S. SECRET level or above.
DSP-83 Signature Waived for Fully Authorized Transactions
The rule (via amendment to Sec. 123.10(a)) waives the DSP-83 nontransfer and use certificate signature requirement for transactions that rely on the exemptions in Sec. 126.5 and Sec. 126.7; conversely, if any party to a transaction is not an Authorized User, the Sec. 126.7 exemption does not apply and a DSP-83 would be required.
Guidance on U.S. Affiliates and Authorized Users
DDTC will publish a FAQ clarifying that U.S. subsidiaries and affiliates listed in block 8 of the DS-2032 registration form are eligible to self-certify to exemption usage and meet the registration requirement of Sec. 126.7(b)(2)(i). The Department also notes that over 700 entities from Australia and the United Kingdom have become Authorized Users.
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Key Dates
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