The U.S. aerospace and defense industry is feeling the impact of the COVID-19 pandemic as individuals and companies are trying to adjust to coronavirus recommendations. While U.S. companies remain operational, many have experienced supply chain disruptions leading to concerns that contractual requirements will not be met. Several international meetings and airshows (e.g., Farnborough, Singapore Air Show, etc.) have been delayed or cancelled and, for those that have decided to continue on, news outlets are reporting lower rates of attendance as major defense companies pulled out at the last minute due to travel restrictions.
Companies are currently adjusting to meeting work-from-home requirements and local quarantine orders versus focusing on work orders from customers. Some companies have even notified employees of furloughs and reductions in operations resulting from coronavirus impacts, but essential activities supporting the defense industrial base continue. As companies are trying to adjust to this ever-shifting landscape, compliance professionals should pay closer attention to upcoming agreement and licensing deadlines in order to ensure continuity of operations and minimize disruptions. As such, we recommend submitting applications earlier than normal, as U.S. government agencies will likely be experiencing delays during these uncertain times. In fact, some governmental agencies, like the U.S. State Department’s Directorate of Defense Trade Controls (DDTC) are explicitly warning of such delays.
On March 18, 2020, DDTC posted a notice to inform industry of the measures the office is taking to continue service during the current COVID-19 pandemic. In accordance with various agency’s guidance, including the U.S. Office of Personnel Management, DDTC will continue to perform its functions of Licensing, Compliance, Policy, and Management; however, delays in processing Licensing, Commodity Jurisdiction and General Correspondence requests are expected due to a reduced staff. According to the DDTC website, Enrollment and Registration requests continue to be accepted and processed on a continuous basis through the Defense Export Control and Compliance System (DECCS) portal. In response to the global pandemic, DDTC has also stated that the office will be accepting disclosures and related information pursuant to ITAR Section 127.12 via email to [email protected], as long as the information is on company letterhead and in PDF format. Also of note, any information sent to DDTC via email in this manner does not need to be sent in duplicate hard copy via mail.
Additional DDTC updates will be published to its website, but you can reach the DDTC Help Desk and Response Team here.
While the Bureau of Industry and Security has not released an update on operational status, the Department of Commerce has made public several messages from Commerce Secretary Wilbur Ross stating that all department employees must continue to telework until further notice. You can find the messages here.