Registering as a manufacturer or exporter

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1. Registration comes before any license

Almost every American company in the defense trade has to register with the Directorate of Defense Trade Controls before it can apply for anything. The duty falls on "Any person who engages in the United States in the business of manufacturing or exporting or temporarily importing defense articles, or furnishing defense services" (22 CFR 122.1(a)).

Two points in that rule catch companies out. One occasion is enough to be in the business. And exporting is not the trigger on its own: "A manufacturer who does not engage in exporting must nevertheless register" (22 CFR 122.1(a)). A domestic supplier making parts for American programs is covered even if it never ships abroad.

2. Who is exempt, and what registration does not do

Four groups are exempt (22 CFR 122.1(b)). They are government officers and employees acting officially, and persons whose relevant business is limited to producing unclassified technical data. Persons whose manufacturing and exports are all licensed under the Atomic Energy Act are exempt too, as are those fabricating articles only for experimental or scientific purposes, including research and development.

The exemption is from registration only. A person in the technical data or research groups still needs licenses for exports and cannot receive one without registering (22 CFR 122.1(b)).

Registration itself gives nothing to export. It is primarily a means of telling the government who is involved in manufacturing and exporting. "Registration does not confer any export rights or privileges" (22 CFR 122.1(c)). It is generally a precondition to any license or approval unless the Directorate grants an exception.

3. The statement and who signs it

Registration is made on Form DS-2032, filed electronically with the Office of Defense Trade Controls Compliance (22 CFR 122.2(a)). It may include subsidiaries and affiliates that are majority owned or otherwise controlled. "Registrants may not establish new entities for the purpose of reducing registration fees" (22 CFR 122.2(a)).

A manufacturer or exporter registration needs the signature of an empowered senior officer, who must be an American person. It must include proof that the registrant is incorporated or otherwise authorized to do business in the United States (22 CFR 122.2(a)). The signing officer certifies whether any listed company or its leadership has faced export-related criminal charges or ineligibility. The officer also certifies whether the registrant is foreign owned or controlled, and if so by whom (22 CFR 122.2(b)).

4. Annual renewal and the fee tiers

Registration is renewed every year with a fee, and the request is due at least 30 but no earlier than 60 days before expiry. The Directorate sends notice of the next fee at least 60 days before expiration (22 CFR 122.2(d) and 22 CFR 122.2(e)). A company that lets registration lapse and later returns pays for any part of the gap in which it was in the business (22 CFR 122.2(f)).

The fee depends on activity, measured over the 12 months ending 90 days before expiry (22 CFR 122.3(a)).

• Tier 1 is $3,000 a year, for new registrants and for renewals with no favorable determinations in that period.
• Tier 2 is $4,000, for renewals with five or fewer favorable determinations.
• Tier 3 is $4,000 plus $1,100 for each favorable determination over five.

Discounts for tax-exempt organizations and for low-value Tier 3 exporters or temporary importers are described on the Directorate’s website (22 CFR 122.3(b)).

5. Changes and foreign ownership

Certain events must be reported in writing within five days, signed by a senior officer (22 CFR 122.4(a)). They are criminal charges, convictions or ineligibility affecting the people covered by the registration certification, and changes to the registrant’s name, address, legal structure, ownership or control, or leadership. Establishing, acquiring or divesting an affiliate engaged in manufacturing or exporting is also reported within five days.

A foreign sale needs earlier notice, by registered mail. The registrant must notify the Directorate at least 60 days before any intended sale or transfer of ownership or control of the registrant, or of any of its entities, to a foreign person (22 CFR 122.4(b)). The notice lets the Directorate decide whether to invoke its statutory authority over licenses for such transfers, and it does not replace the approval needed to export or disclose technical data to the new owner.

After a merger or acquisition, the surviving entity reports its names, surviving and discontinued registration numbers, and the licenses whose unshipped balances will move to it. Licenses left off that list lose force, since "any license not the subject of notification will be considered invalid" (22 CFR 122.4(c)(3)). Approved agreements must be amended to change the party name within 60 days, signed by the new entity, the former licensor and the foreign licensee (22 CFR 122.4(c)(4)).

6. Records kept for five years

Registrants keep records of the manufacture, acquisition and disposition of defense articles and technical data, defense services, brokering, and political contributions, fees and commissions (22 CFR 122.5(a)). Electronic records must be reproducible on paper, legible, and stored so that no entry can be altered without recording the change, who made it and when.

"All records subject to this section must be maintained for a period of five years from the expiration of the license or other approval" (22 CFR 122.5(a)), including exports under exemptions. The records must be available at any time for inspection and copying by the Directorate, a person it designates, or the customs agencies, with the equipment and staff needed to read them (22 CFR 122.5(b)).

7. What this means for a supplier

Registration is a condition of doing business, not a license, and it applies to manufacturers that never export. The fee grows with licensing activity. The practical risks sit in the notices: a missed five-day report, a foreign investor arriving without the 60-day notice, or a merger that leaves licenses off the list. Broker registration, which follows a similar pattern, is covered in broker filings, guidance and annual reports.

Key terms

Registration	The annual filing on Form DS-2032 that is generally a precondition to any license or approval.
Favorable determination	An approved license or authorization, counted to set the renewal fee tier.
Sixty day notice	Advance notice by registered mail of any intended transfer of ownership or control to a foreign person.
Five year rule	The period for keeping export records, counted from license expiry or the transaction date.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

How Sentfore supports this

Registered manufacturers still need their equipment moved and protected once programs reach the field. Sentfore works at the delivery end of defense programs in difficult environments, providing secure movement, protective security, facilities and life support. Requirements can be sent through the contact page.