J.E. Bartlett: “Is it Time to Change the ITAR Definitions of U.S. Person and Foreign Person?”

J.E. Bartlett: “Is it Time to Change the ITAR Definitions of U.S. Person and Foreign Person?”

(Source: Full Circle Compliance, 22 Jan 2018.)

* Author: James E. Bartlett III, Partner at Full Circle Compliance, JEBartlett@JEBartlett.com, +1 202-802-0646.

The definitions in the International Traffic in Arms Regulations (ITAR) of “U.S. person” and “foreign person” could be better worded without changing the legal effect of the regulations.  “U.S. Person” is currently defined in the ITAR as:

• 120.15 U.S. Person.  U.S. person means a person (as defined in § 120.14 of this part) who is a lawful permanent resident as defined by 8 U.S.C. § 1101(a)(20) or who is a protected individual as defined by 8 U.S.C. § 1324b(a)(3). It also means any corporation, business association, partnership, society, trust, or any other entity, organization or group that is incorporated to do business in the United States.  It also includes any governmental (federal, state or local) entity.  It does not include any foreign person as defined in § 120.16 of this part.

Although U.S. citizens are defined as U.S. persons by the Immigration and Nationality Act (INA), in 8 U.S.C. § 1324b(a)(3)[F/N], the status of U.S. citizens is not mentioned in the current ITAR § 120.15 definition of U.S. person except by reference to the INA section.  A better definition of U.S. person would include the words “U.S. citizen or national of the United States ” in ITAR § 120.15.  The proposed new definition of ITAR § 120.15, U.S. Person, adds “who is a citizen or national of the United States,” and limits governmental entities to those in the United States, as follows:

• 120.15 U.S. Person. U.S. personmeans a person (as defined in § 120.14 of this part) who is a citizen or national of the United States, a lawful permanent resident as defined by 8 U.S.C. § 1101(a)(20), or who is a protected individual as defined by 8 U.S.C. § 1324b(a)(3).  It also means any corporation, business association, partnership, society, trust, or any other entity, organization or group that is incorporated to do business in the United States, and any United States governmental (federal, state, or local) entity.  It does not include any foreign person as defined in § 120.16 of this part.

The definition of “foreign person” in ITAR § 120.16 could also be improved by changing the name of the term to “non-U.S. person”.  The definition would remain the same except for adding “not a citizen or national of the United States.”  The term “foreign person” is defined in the Arms Export Control Act (AECA), at 22 U.S.C. § 2778(g)(9)(C), as “any person who is not a citizen or national of the United States or lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act, and includes foreign corporations, international organizations, and foreign governments.”  Changing the AECA definition would not be possible unless Congress amended the law, but a change of the AECA is unnecessary, because the ITAR could implement the requirements of the AECA regarding foreign persons equally well  by substituting the term “non-U.S. person” for “foreign person”.  “Foreign Person” is currently defined in ITAR § 120.16 as:

• 120.16 Foreign Person.Foreign personmeans any natural person who is not a lawful permanent resident as defined by 8 U.S.C. 1101(a)(20) or who is not a protected individual as defined by 8 U.S.C. 1324b(a)(3). It also means any foreign corporation, business association, partnership, trust, society or any other entity or group that is not incorporated or organized to do business in the United States, as well as international organizations, foreign governments and any agency or subdivision of foreign governments (e.g., diplomatic missions).

The proposed new definition substitutes “non-U.S. person” for “foreign person”, clarifying that the term does not include U.S. citizens or nationals:

• 120.16Non-U.S. personmeans any natural person who is not a citizen or national of the United States, not a lawful permanent resident as defined by 8 U.S.C. § 1101(a)(20), and not a protected individual as defined by 8 U.S.C. § 1324b(a)(3).   It also means any foreign corporation, business association, partnership, trust, society, or any other entity or group that is not incorporated or organized to do business in the United States, as well as international organizations, foreign governments, and any agency or subdivision of foreign governments (e.g., diplomatic missions).

Changing the name “foreign person” to “non-U.S. person” will make it easier for persons in other countries, where U.S. citizens are regarded as foreign persons, to understand the ITAR definition.

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[F/N]  8 U.S.C. 1324b(a)(3) states:

“Protected individual” defined.  As used in paragraph (1), the term “protected individual” means an individual who—

(A) is a citizen or national* of the United States, or

(B) is an alien who is lawfully admitted for permanent residence, is granted the status of an alien lawfully admitted for temporary residence under section 1160(a) [Special Agricultural Workers] or 1255a (a)(1) [Timely Application] of this title, is admitted as a refugee under section 1157 [Annual admission of refugees and admission of emergency situation refugees] of this title, or is granted asylum under section 1158 of this title; but does not include:

(i) an alien who fails to apply for naturalization within six months of the date the alien first becomes eligible (by virtue of period of lawful permanent residence) to apply for naturalization or, if later, within six months after November 6, 1986, and

(ii) an alien who has applied on a timely basis, but has not been naturalized as a citizen within 2 years after the date of the application, unless the alien can establish that the alien is actively pursuing naturalization, except that time consumed in the Service’s processing the application shall not be counted toward the 2-year period.

* Definition of “national of the United States”:  The U.S. State Department, in the annotation titled “Certificates of Non-Citizen Nationality”, available here (undated; last viewed Jan. 20, 2018), states in part:

As defined by [Section 341(b)of the Immigration and Nationality Act (INA), 8 USC 1452(b)], all U.S. citizens are U.S. nationals, but only a relatively small number of persons acquire U.S. nationality without becoming U.S. citizens. Section 101(a)(21) of the INA defines the term “national” as “a person owing permanent allegiance to a state.” Section 101(a)(22) of the INA provides that the term “national of the United States” includes all U.S. citizens as well as persons who, though not citizens of the United States, owe permanent allegiance to the United States (non-citizen nationals).  Section 308 INA confers U.S. nationality but not U.S. citizenship, on persons born in “an outlying possession of the United States” or born of a parent or parents who are non-citizen nationals who meet certain physical presence or residence requirements. The term “outlying possessions of the United States” is defined in Section 101(a)(29) of the INA as American Samoa and Swains Island. No other statutes define any other territories or any of the states as outlying possessions. In addition to Section 308 of the INA, Section 302 of Public Law 94 – 241 provides for certain inhabitants of the Commonwealth of the Northern Mariana Islands, who became United States citizens by virtue of Article III of the Covenant, to opt for non-citizen national status.