When reviewing parties to an export transaction, it is important to also review any U.S. parties to the transaction against the U.S. government sanctioned parties lists.

Section 38(g)(4) of the AECA, 22 U.S.C. 2778(g)(4), restricts the Department of State from issuing licenses for the export of defense articles or defense services where the applicant, or any party to the export, has been convicted of violating the AECA or certain other statutes, enumerated in section 38(g)(1) of the AECA, subject to a narrowly defined statutory exception. This provision establishes a presumption of denial for licenses or other approvals involving such persons. The Department refers to this restriction as a limitation on ‘‘export privileges’’ and implements this presumption of denial through section 127.11 of the ITAR.

In addition, section 127.7(b) of the ITAR provides for ‘‘statutory debarment’’ of any person who has been convicted of violating or conspiring to violate the AECA. Under this policy, persons subject to statutory debarment are prohibited from participating directly or indirectly in any activities that are regulated by the ITAR. Statutory debarment is based solely upon conviction in a criminal proceeding, conducted by a United States court, and as such the administrative debarment procedures outlined in part 128 of the ITAR are not applicable.

Debarred parties to the transaction, including U.S. parties to the export, may not, without disclosure to and written approval from the Directorate of Defense Trade Controls, participate, directly or indirectly, in any ITAR-controlled transaction where such ineligible person may obtain benefit therefrom or have a direct or indirect interest therein.