Once the agreement is fully implemented by all parties, a copy of the ITAR agreement must be filed electronically with DDTC/DTCL within 30 days of its entry into force. [9] Note that this is one of the ITAR agreement notifications that L3Harris has not concluded. In particular, L3Harris “was unable to submit the TAA and MLA agreements signed with DDTC.” [10] The L3Harris Agreement serves as a reminder to companies involved in the production or export of defence equipment, that their export compliance programs should be holistic and that all potential regulations regarding the trade of the agencies concerned, including, but not limited, are, DoD, DDTC, BIS, the Treasury Office of Foreign Assets Control, which manages U.S. sanctions rules, and the U.S. Census Bureau, which manages U.S. trade regulations. What is an approval agreement and why is it important? An approval agreement outlines “measures to improve compliance programs.” [2] This is not an admission of guilt, but a comparison between the government and the company. Each approval agreement is different, depending on the dissemination of the alleged violations committed by the company and whether the entity has compliance programs. But any approval agreement involves charges of gross negligence and often wilful or conscious breaches. Approval agreements are also relatively rare: as a general rule, DDTC does not conclude a very large number of approval agreements per year, if any, and the L3Harris agreement is only the second one in 2019.

Once permission has been granted for the ITAR agreement, several compliance tasks must be performed, including: rule implementation, enforcement of agreements, file notifications and reports with DDTC/DTCL, balance management, file changes and record management. The L3Harris agreement with DDTC offers five valuable takeaways for all defence exporters: [2] Defining Consent Agreements, Penalties and Oversight Agreements, Directorate of Defense Trade Controls, www.pmddtc.state.gov/ddtc_public?id=ddtc_kb_article_page&sys_id=384b968adb3cd30044f9ff621f961941. Among the penalties for its 131 alleged violations, L3Harris faces a civil fine of $13 million, of which $6.5 million may be suspended if the company puts the money into corrective compliance fees in accordance with the agreement. It is important to note that the penalties in the agreement apply to the “agents and successors” of the business, which means that the terms of the approval agreement apply to the buyer, even if the business is sold or is part of a merger.