DEFENSE SECURITY COOPERATION AGENCY 201 12th STREET SOUTH, STE 203 ARLINGTON, VA 22202-5408	3/15/2016

MEMORANDUM FOR :

DEPUTY UNDER SECRETARY OF THE AIR FORCE FOR INTERNATIONAL AFFAIRS
DEPUTY ASSISTANT SECRETARY OF THE ARMY FOR DEFENSE EXPORTS AND COOPERATION
DEPUTY ASSISTANT SECRETARY OF THE NAVY FOR INTERNATIONAL PROGRAMS
DIRECTOR, DEFENSE CONTRACT MANAGEMENT AGENCY
DIRECTOR FOR SECURITY ASSISTANCE, DEFENSE FINANCE AND ACCOUNTING SERVICE-INDIANAPOLIS OPERATIONS
DIRECTOR, DEFENSE INFORMATION SYSTEMS AGENCY
DIRECTOR, DEFENSE LOGISTICS AGENCY
DIRECTOR, DEFENSE LOGISTICS INFORMATION SERVICE
DIRECTOR, DEFENSE LOGISTICS AGENCY DISPOSITION SERVICES
DIRECTOR, DEFENSE THREAT REDUCTION AGENCY
DIRECTOR, MISSILE DEFENSE AGENCY
DIRECTOR, NATIONAL GEOSPATIAL-INTELLIGENCE AGENCY
DEPUTY DIRECTOR FOR INFORMATION ASSURANCE, NATIONAL SECURITY AGENCY

SUBJECT :

Update to the Security Assistance Management Manual (SAMM) Appendix 6 Adding a Mandatory Letters of Offer and Acceptance (LOA) Note Regarding Canadian Embedded Contractors, DSCA Policy 16-16, SAMM E-Change 303

The Canadian Department of National Defence and the U.S. Department of State have agreed that the word "employee" as used in LOA Standard Terms and Conditions entered into between Canada and the United States will include "embedded contractors" working within the Canadian Department of National Defence who meet the specifics of section 120.39 of the International Traffic in Arms Regulations (ITAR).

The conditions of this agreement apply if Canadian "embedded contractors" can be considered, as defined in section 120.39, as:

1. An individual permanently and directly employed by the company, or
2. An individual in a long term contractual relationship with the company where the individual works at the company's facilities, works under the company's direction and control, works full time and exclusively for the company, and executes nondisclosure certifications for the company, and where the staffing agency that has seconded the individual has no role in the work the individual performs (other than providing that individual for that work) and the staffing agency would not have access to any controlled technology (other than where specifically authorized by a license).

"Embedded contractors" are limited only to the day-to-day access to defense articles and are not in policy-level decision-making positions on Foreign Military Sales cases. This agreement does not affect the requirements for complying with U.S. national disclosure policy.

To implement this agreement, effective immediately, the following note will be applied by the Case Writing Division to all new LOAs offered to Canada, and to all Amendments or Modifications of existing cases for Canada that do not include it.

"Embedded contractors working for the Canadian Department of National Defence who meet the definition of "regular employee" in section 120.39 of the International Traffic in Arms Regulations (ITAR), are considered by the United States to be employees under section 3 of the Arms Export Control Act, as amended (AECA) and Section 2.4 of the LOA Standard Terms and Conditions."

For any questions regarding this policy, please contact Mike Slack DSCA/STR/SPI, at (703) 697-9058 or micheal.d.slack.civ@mail.mil. The attached revision to Appendix 6 will be included in the on-line version of the Security Assistance Management Manual (SAMM) found on the DSCA Web Page as SAMM E-Change 303.

Robert Helfant
Principal Director
Strategy

ATTACHMENT : 
As stated

CC :

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