Understanding the Difference Between TAAs and MLAs Under ITAR

Introduction

Under the International Traffic in Arms Regulations (ITAR), U.S. companies that export defense articles, technical data, or defense services must obtain authorization from the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC). When a transaction involves sharing technical know-how or working with foreign partners, simple export licenses are often insufficient. Instead, ITAR requires formal written agreements — most commonly, B'Technical Assistance Agreements (TAAs)' and Manufacturing License Agreements (MLAs).

While both serve as mechanisms to authorize transfers of controlled defense technology or services to foreign parties, they have distinct purposes. Understanding the difference between a TAA and an MLA is critical for ensuring compliance and avoiding severe export violations.

Key Details About TAAs and MLAs

1. Technical Assistance Agreements (TAAs)

A Technical Assistance Agreement (TAA) authorizes a U.S. company to B'provide defense services or technical data' to a foreign person or entity.
TAAs are required when the foreign recipient will receive assistance related to the design, development, engineering, or use of a defense article listed on the U.S. Munitions List (USML), but where manufacturing or production is not authorized.

Examples of activities requiring a TAA include:

• Providing technical drawings or blueprints to a foreign partner for integration or maintenance purposes.
• Training foreign engineers or technicians on the operation or repair of U.S.-origin defense systems.
• Sharing controlled technical information to support system upgrades or testing.

In short, TAAs allow know-how and expertise' to be shared, but they B'do not permit manufacturing of the defense article abroad.

2. Manufacturing License Agreements (MLAs)

A Manufacturing License Agreement (MLA) goes a step further. It authorizes a foreign entity not only to receive technical data but also to manufacture defense articles covered by the ITAR.

MLAs are required when a U.S. company intends to allow a foreign partner to:

• Produce or assemble defense articles abroad using U.S.-origin technology.
• Incorporate controlled U.S. components into defense systems manufactured overseas.
• Transfer manufacturing know-how, tooling, or production techniques.

MLAs typically include detailed terms regarding production rights, quality control, retransfer limits, and export authorization for the manufactured items. They are therefore more complex and sensitive than TAAs and undergo heightened DDTC scrutiny.

3. Key Differences Between TAAs and MLAs

Although both agreements involve the transfer of controlled technical data or services, several major distinctions set them apart:

In essence, a TAA covers “assistance,” while an MLA covers “manufacturing.”

4. DDTC Approval Process

Both TAAs and MLAs must be submitted to DDTC under ITAR Part 124 and approved before any controlled data or services are shared.

The process involves:

• Drafting the agreement using DDTC’s required structure and clauses.
• Identifying all U.S. and foreign parties involved.
• Describing the scope of technical data or manufacturing activities.
• Submitting the application through the Defense Export Control and Compliance System (DECCS) portal.

Once approved, the agreement becomes legally binding. Any modifications, extensions, or additional parties must be submitted as amendments and approved by DDTC prior to implementation.

5. Compliance and Ongoing Obligations

Companies with approved TAAs or MLAs must maintain rigorous compliance controls throughout the life of the agreement. This includes:

• Recordkeeping: Keeping detailed logs of all transfers and communications.
• Annual reporting: Submitting reports to DDTC on the status of activities.
• Security measures: Ensuring only authorized individuals access controlled data.
• Termination procedures: Returning or properly disposing of ITAR-controlled data at the end of the agreement.

Violations — even inadvertent — can result in severe civil fines, debarment, or criminal penalties.

Conclusion

While both TAAs and MLAs are essential tools for enabling lawful collaboration with foreign partners under ITAR, the scope and purpose of each differ significantly. TAAs authorize the sharing of defense services or technical data, while MLAs authorize foreign manufacturing based on that data.

Understanding these distinctions ensures that U.S. companies can engage internationally without breaching export control laws. By carefully determining whether an activity involves assistance or production, exporters can select the correct authorization path, maintain compliance, and uphold the integrity of U.S. national security interests.