There are many considerations with regards to the sale or acquisition of a company or business unit of a company including a specific product or product family.
If the sale or acquisition involves an ITAR registered entity or business (i.e. product line) of an entity, the burden is on the seller to provide advance notification to the U.S. Department of State – Directorate of Defense Trade Controls Compliance (DTCC) of this anticipated sale. Barring any issue or objection by DTCC, DOD, or others within the U.S. Government, the sale may proceed. With the purchase, the buyer agrees to obtain a new DDTC registration for the acquiring company, if the company is not already registered, along with transfer from the seller to the buyer of any existing and required ITAR licensing authority for products and activities of the business being purchased. There are different notification time requirements when the sale is to a foreign company.
It is important that any U.S. company selling a business (regardless of products or business activities) to a foreign company obtains, where deemed necessary, clearance from Committee of Foreign Investment in the United States (CFIUS). This U.S. Government interagency committee is authorized to investigate and block any transaction or investment by a foreign company that could present possible national security concerns.
This Blog is made available by Wilmarth & Associates for educational purposes as well as to give you general information and a general understanding of export law and compliance, not to provide specific legal advice. This blog is not legal advice and should not be treated as such. You must not rely on this blog as an alternative to legal advice from your attorney or other professional legal services provider. The information provided on this website is presented “as is” without any representations or warranties, express or implied.
