22 C.F.R. § 126.7

Exemptions for defense trade and cooperation among Australia, the United Kingdom, and the United States

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(a) By U.S. persons, government departments or agencies, or Authorized Users. No license is required for the export, reexport, retransfer, or temporary import of defense articles, furnishing of defense services, or engaging in brokering activities as described in part 129 of this subchapter, between or among parties described in § 126.7(b)(2), subject to the requirements and limitations in paragraph (b) of this section.

(b) Requirements and limitations. The exemption described in paragraph (a) of this section is subject to the following requirements and limitations:

(1) The activity must be to or within the physical territory of Australia, the United Kingdom, or the United States;

(2) The transferor, recipient, or broker must each be:

(i) A U.S. person registered with the applicable Directorate of Defense Trade Controls (DDTC) registration pursuant to §§ 122.1 and 129.3 of this subchapter, and eligible under § 120.16 of this subchapter;

(ii) A U.S. Government department or agency, United Kingdom national-level government department or agency, or Australian federal government department or agency; or

(iii) An Authorized User identified through the DDTC website and, if engaging in brokering activities, registered with DDTC pursuant to § 129.3 of this subchapter;

(3) The defense article or defense service is not identified in supplement no. 2 to this part as ineligible for transfer under the exemption in paragraph (a) of this section;

(4) The value of the transfer does not exceed the amounts described in § 123.15 of this subchapter and does not involve the manufacturing abroad of significant military equipment as described in § 124.11 of this subchapter; and

(5) Transferors must comply with the requirements of § 123.9(b) of this subchapter.

Note 1 to paragraph (b):

The exemption in paragraph (a) of this section does not remove other applicable U.S. statutory and regulatory requirements. For example, for U.S. parties, transfers of classified defense articles and defense services must still meet the requirements in 32 CFR part 117, National Industrial Security Program Operating Manual (NISPOM), in addition to all other applicable laws. Australian Authorized Users must, for example, meet the requirements in the Australian Protective Security Policy Framework, including appropriate security risk management for contracted providers. United Kingdom Authorized Users must, for example, meet the requirements in the Government Functional Standards GovS 007: Security.

(c) Reexports, retransfers, or temporary imports in support of the armed forces of Australia, the United Kingdom, or the United States. No license is required for the reexport or retransfer of defense articles among parties described in § 126.7(b)(2) or temporary import of defense articles into the United States, subject to the requirements and limitations in paragraph (d) of this section.

(d) Requirements and limitations. The exemption described in paragraph (c) of this section is subject to the following requirements and limitations:

(1) The defense article was originally exported pursuant to a license or other approval;

(2) To the extent that any party described in § 126.7(b)(2)(i) or (iii) is a party to the reexport, retransfer, or temporary import into the United States, such party is under contract with and either directly embedded with the armed forces of Australia, the United Kingdom, or the United States or operating alongside and in support of such forces; and

(3) The purpose of the reexport, retransfer, or temporary import is for:

(i) The provision of on-site support to the armed forces of Australia, the United Kingdom, or the United States, or

(ii) The return to Australia or the United Kingdom, or the United States of defense articles used in on-site support of the armed forces of Australia, the United Kingdom or the United States; and

(iii) The reexport, retransfer or temporary import is subject to paragraphs (b)(3) through (5) of this section.

[89 FR 67290, Aug. 20, 2024, as amended at 90 FR 61061, Dec. 30, 2025]

Notes of Decisions

Cited in 5 cases, 1996–2020 · leading case: Def. Distributed v. United States Dep't of State, 838 F.3d 451 (5th Cir. 2016).

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Def. Distributed v. United States Dep't of State, 838 F.3d 451 (5th Cir. 2016). · cites it 2× “” 22 C.F.R. § 126.7 (a)(1). There is a nominal 60-day deadline for a licensing decision, which is riddled with exceptions, and denial of an export license is expressly exempt from judicial review.”

Stagg, P.C. v. U.S. Dept. of State, 983 F.3d 589 (2d Cir. 2020). “” 22 C.F.R. § 126.7 (a)(1). 18 The ITAR further provide that the administration of the AECA, including 3The text of the ITAR’s civil penalty provision says nothing with respect to whether the exporter must have acted with any particular mental state, 22 C.”

B-West Imports, Inc. v. United States, 75 F.3d 633 (Fed. Cir. 1996). · cites it 2× “” 22 C.F.R. § 126.7 (a). The appellants are therefore incorrect in contending that they were entitled to continue importing munitions from China, pursuant to their previously issued permits, after the embargo became effective.”

Bernstein v. United States Dep't of State, 945 F. Supp. 1279 (N.D. Cal. 1996). “22 C.F.R. § 126.7 (a)(1). While the court is mindful of the problems inherent in judicial review of ODTC licensing decisions regarding cryptographic software, both with respect to the sophistication of the technology and the potentially classified nature of the licensing…”

Robert Thorne v. Dos (9th Cir. 2020). “DOS 5 that “[p]ursuant to 22 CFR 126.7 . . . U.S. persons are accorded an opportunity to present additional information requesting reconsideration of an adverse decision; however we have determined that new permits would not overcome the presumption of denial for these…”

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