May 26, 2016
On May 23, 2016, President Obama announced a full lifting of the ban on weapons sales to Vietnam during his official visit to the country. Following the President’s announcement, the United States Department of State, Directorate of Defense Trade Controls (“DDTC”) stated that, effective immediately, and pursuant to a decision made by the Secretary of State, the Department of State’s policy prohibiting the sale or transfer of lethal weapons to Vietnam has been terminated. DDTC’s review of applications for licenses to export or temporarily import defense articles and defense services to or from Vietnam under International Traffic in Arms Regulations (“ITAR”) will now happen on a case-by-case basis, and DDTC will soon publish a rule in the Federal Register to implement a conforming change to ITAR Section 126.1.
Background
The DDTC is charged with controlling the export and temporary import of defense articles and defense services covered by the United States Munitions List in accordance with 22 U.S.C. 2778-2780 the Arms Export Control Act and ITAR. In 2007, the Department of State amended Section 126.1 of the ITAR to make it United States policy to consider, on a case-by-case basis, licenses for exports or imports of non-lethal defense articles and defense services destined for or originating in Vietnam, while retaining a general policy of denial on exports and imports of defense articles and defense services destined for or originating in Vietnam.[1] In 2014, the Obama Administration announced a further partial lifting of the weapons ban focusing on maritime security assets and the Department of State accordingly amended Section 126.1 to allow case-by-case review of licenses concerning lethal defense articles and defense services to enhance maritime security capabilities and domain awareness.[2]
Full Lifting of the Vietnam Arms Embargo
During an official visit to Vietnam this week, President Obama focused on the enhancement of relations between the United States and Vietnam. The two countries emphasized deepening their long-term partnership and discussed strengthening political and diplomatic ties, advancing people-to-people contact and economic relations, promoting human rights and legal reform, and addressing regional and global challenges.[3]
Among other initiatives, President Obama announced that after some 50 years, the United States is fully lifting the ban on the sale of military equipment to Vietnam. President Obama noted that “[a]s with all our defense partners, sales will need to still meet strict requirements, including those related to human rights.”[4]
According to DDTC and effective immediately, the Department of State’s policy prohibiting the sale and transfer of lethal weapons to Vietnam, including restrictions on exports and imports from Vietnam for arms and related materiel, has been terminated. DDTC announced that in accordance with the Arms Export Control Act, the DDTC will review on a case-by-case basis applications for licenses to export or temporarily import defense articles and defense services to or from Vietnam under ITAR. DDTC also stated that it will soon publish a rule implementing these changes in the Federal Register.[5]
[1] 72 Fed. Reg. 15830 (Apr. 3, 2007), https://www.federalregister.gov/documents/2007/04/03/E7-6149/amendment-of-the-international-traffic-in-arms-regulations-policy-with-respect-to-vietnam.
[2] 79 Fed. Reg. 66615 (Nov. 10, 2014), https://www.federalregister.gov/documents/2014/11/10/2014-26632/amendment-to-the-international-traffic-in-arms-regulations-policy-on-exports-to-vietnam.
[3] Press Release, The White House, Joint Statement: Between the United States of America and the Socialist Republic of Vietnam (May 23, 2016), https://www.whitehouse.gov/the-press-office/2016/05/23/joint-statement-between-united-states-america-and-socialist-republic.
[4] Press Release, The White House, Remarks by President Obama and President Quang of Vietnam in Joint Press Conference (May 23, 2016), https://www.whitehouse.gov/the-press-office/2016/05/23/remarks-president-obama-and-president-quang-vietnam-joint-press.
[5] Industry Notice, U.S. Department of State, Directorate of Defense Trade Controls, available at http://pmddtc.state.gov/.
The following Gibson Dunn lawyers assisted in the preparation of this client alert: Judith Alison Lee, Adam M. Smith, Kamola Kobildjanova and David A. Wolber.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the above developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following leaders and members of the firm’s International Trade Group:
United States:
Judith A. Lee – Co-Chair, Washington, D.C. (+1 202-887-3591, [email protected])
Ronald Kirk – Co-Chair, Dallas (+1 214-698-3295, [email protected])
Jose W. Fernandez – New York (+1 212-351-2376, [email protected])
Marcellus A. McRae – Los Angeles (+1 213-229-7675, [email protected])
Daniel P. Chung – Washington, D.C. (+1 202-887-3729, [email protected])
Adam M. Smith – Washington, D.C. (+1 202-887-3547, [email protected])
Mehrnoosh Aryanpour – Washington, D.C. (+1 202-955-8619, [email protected])
David A. Wolber – Washington, D.C. (+1 202-887-3727, [email protected])
Nicholas A. Klein – Denver (+1 303-298-5795, [email protected])
Kamola Kobildjanova – Palo Alto (+1 650-849-5291, [email protected])
Lindsay M. Paulin – Washington, D.C. (+1 202-887-3701, [email protected])
Asia:
Robert S. Pé – Hong Kong (+852 2214 3768, [email protected])
Europe:
Peter Alexiadis – Brussels (+32 2 554 72 00, [email protected])
Attila Borsos – Brussels (+32 2 554 72 10, [email protected])
Patrick Doris – London (+44 (0)207 071 4276, [email protected])
Penny Madden – London (+44 (0)20 7071 4226, [email protected])
Benno Schwarz – Munich (+49 89 189 33 110, [email protected])
Mark Handley – London (+44 (0)207 071 4277, [email protected])
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