State Department finalises ITAR registration fee increases for 2025

The US State Department has finalised increases to International Traffic in Arms Regulations (‘ITAR’) registration fees, with higher rates taking effect in January 2025, according to a final rule published on 10 December.

The Directorate of Defense Trade Controls (‘DDTC’) said, ‘This increase is necessary because DDTC operations are primarily funded by fees. Without a sufficient increase to meet operational costs that have significantly risen since 2008, DDTC would be faced with untenable budget deficits and would be forced to reduce its services.’

The new three-tier structure raises the base fee for Tier 1 registrants to $3,000 annually, a 33.1% increase. Tier 2 registrants will pay $4,000, while Tier 3 fees will be calculated as ‘$4,000 plus $1,100 times the total number of favourable determinations over five.’

The Department said it acknowledges and understands concerns by stakeholders who sent in comments to the new rule, announcing a one-year initiative allowing qualifying Tier 1 registrants to petition for a $500 discount if the $3,000 fee exceeds 1% of their total revenue. DDTC expects the new fee structure to generate approximately $67.2 million annually, up from $33.8 million in fiscal year 2023, to support its projected $60 million operational budget covering ‘contract labor support, IT services, personnel salaries, outreach, and travel.’

‘The Department has concluded that Tier 3 registrants have benefited the most from DDTC’s improvements, specifically the Defense Export Control and Compliance System (DECCS) and customer service improvements, and that they are best positioned to contribute from their export derived revenue,’ the rule states.

https://public-inspection.federalregister.gov/2024-29032.pdf