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Maria Alejandra (Jana) del-Cerro is an associate in Crowell & Moring's Washington, D.C. office. She is a member of the firm's International Trade Group. Jana's practice focuses primarily on counseling and defending clients with respect to U.S. export controls, including the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), and the sanctions programs administered by the Office of Foreign Assets Controls (OFAC), as well as the U.S. Antiboycott Laws and the Helms-Burton Act.

On March 22, 2023, the Department of Defense (DoD) issued a proposed rule that would amend the Defense Federal Acquisition Regulation Supplement (DFARS) to require certain contractors to provide export authorizations to the Defense Authorization Management Agency (DCMA).

DCMA performs quality assurance reviews for manufacturing operations to ensure contractors have the appropriate systems in place to meet quality and functionality standards along with contractual requirements regarding testing and validation.  In some cases, DCMA will engage a foreign auditor to perform the quality assurance review.  However, to do so DCMA needs insight into applicable export authorizations to see if engaging the foreign auditor is permissible.      

The proposed rule would require contractors to provide export authorizations to DCMA when the contract requires (i) government quality assurance surveillance oversight and (ii) performance in or delivery to a government quality assurance country (Australia, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Israel, Italy, Republic of Korea, Netherlands, Norway, Poland, Romania, Slovakia, Spain, Sweden, Turkey, and the United Kingdom).  Export authorizations include export licenses, exemptions, exceptions, and other approvals.  The contractor must also provide the contact information for an empowered official or export point of contact.  

Continue Reading Proposed Rule Requires Certain Contractors to Provide Export Authorizations to DCMA

The National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023, signed into law on December 23, 2022, makes numerous changes to acquisition policy. Crowell & Moring’s Government Contracts Group discusses the most consequential changes for government contractors here. These include changes that provide new opportunities for contractors to recover inflation-related costs, authorize new programs for small businesses, impose new clauses or reporting requirements on government contractors, require government reporting to Congress on acquisition authorities and programs, and alter other processes and procedures to which government contractors are subject. The FY 2023 NDAA also includes the Advancing American AI Act, the Intelligence Authorization Act for FY 2023, and the Water Resources Development Act of 2022, all of which include provisions relevant for government contractors.

Continue Reading FY 2023 National Defense Authorization Act: Key Provisions Government Contractors Should Know

On September 15, 2022, the Biden Administration issued a new executive order (“EO”) and accompanying fact sheet, designed to sharpen the current U.S. foreign investment screening process as administered by the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”). [1] This EO is the first to specifically identify certain additional national security factors for CFIUS to consider when evaluating transactions involving foreign investors. 

While the EO does not expand the jurisdiction of CFIUS or establish new requirements, the EO formally directs CFIUS to focus on transactions that could give foreign parties access to U.S. technologies, data, or critical supply chains that the Biden Administration has identified as important for maintaining U.S. economic and technological edge. The EO does not mention any specific country, but underscores the threat posed by inbound investments “involving foreign adversaries or other countries of special concern,” which may appear to be only economic transactions for commercial purposes but could “actually present an unacceptable risk to United States national security due to the legal environment, intentions, or capabilities of the foreign person, including foreign governments involved in the transaction.” [2]

Continue Reading Biden Administration Announces Presidential Directive on Sharpening Foreign Investment Screening by CFIUS