U.S. and Australia Announce Plans to Reduce Arms Licensing Requirements Under AUKUS Pact

The U.S. State Department and Australia's Department of Defence on Tuesday announced plans to reduce arms licensing requirements for military gear and sensitive technology transfers among the United States, Australia, and Britain under the AUKUS pact. The proposed changes will remove the need for 900 export permits valued at A$5 billion a year from Australia to the U.S. and 200 permits from Britain to Australia.

The rule change proposed by the U.S. Department of State will allow the Department's Directorate of Defense Trade Controls (DDTC) to no longer require licensing or approval for certain defense articles, reducing administrative burdens for companies seeking to manufacture defense products in Australia or the UK. The exemption is designed to encourage defense trade and cooperation between the three countries, allowing their defense industries to work in a seamless, license-free environment.

Why this matters: The proposed changes under the AUKUS pact aim to strengthen defense industry collaboration and encourage innovation in defense technology across international borders. This collaborative effort highlights the shared commitment of the United States, Australia, and Britain to bolster their security and promote global stability.

However, the State Department said the new rule would still generate an excluded items list, requiring approval for certain articles with national security import, such as those governed by the Missile Technology Control Regime (MTCR) and inputs for nuclear devices and some landmines. The U.S. Commerce Department also announced it was scaling back export control requirements for Australia and the United Kingdom earlier this month.

Stakeholders across industry, higher education, and research sectors, as well as those from the UK and the US, are invited to provide feedback on the draft arrangements through a public consultation process that will run until May 31, 2024. "This exemption is designed to encourage defense trade and cooperation between the U.S. and its closest allies, the AUKUS countries," the State Department said in a statement. The changes are aimed at enabling "license-free trade" for more than 70% of defense exports subject to ITAR from the U.S. to Australia and 80% of defense trade subject to Export Administration Regulations.

Key Takeaways

• AUKUS pact to reduce arms licensing requirements between US, Australia, Britain
• 900 export permits from Australia to US and 200 from Britain to Australia to be removed
• Exemption aims to encourage defense trade and cooperation among AUKUS countries
• Certain articles with national security import still require approval, e.g., MTCR, nuclear inputs
• Public consultation on draft arrangements open until May 31, 2024