The United States’s Directorate of Defense Trade Controls (DDTC) issued a final rule (the rule) on November 7, 2025 that immediately amended the International Traffic in Arms Regulations (ITAR) to lift the defense trade embargo on Cambodia.
The change raises the possibility of new sales of defense articles and services to Cambodia, as well as the option to use previously unavailable license exemptions to share ITAR-controlled technical data with Cambodian dual and third-country nationals employed abroad.
In this alert, we provide a brief overview of the updates and key implications for businesses.
Overview of the rule
The rule explained that the amendments to ITAR § 126.1 were made as a result of the Secretary of State’s determination that Cambodia has made significant progress in its pursuit of peace and security, including renewed engagement with the US on defense cooperation and efforts to combat transnational crime.
The rule removed Cambodia from Table 2 to paragraph (d)(2) of ITAR § 126.1 and eliminates the country-specific defense trade policy for Cambodia previously found in paragraph (o). The defense trade embargo was originally implemented on December 9, 2021 in response to what the State Department described as credible evidence of corruption, human rights abuses, and an exclusive agreement with the People's Republic of China on military expansion in Cambodia by the Cambodian government.
Practical impacts
As a result of the changes, DDTC will now adjudicate requests for authorization to transfer defense articles and services to Cambodia on a case-by-case basis. In addition, exemptions previously unavailable to countries listed in ITAR § 126.1 are now available for Cambodia, provided the relevant criteria are satisfied. Notably, ITAR § 126.18(c) can now be used to transfer ITAR-controlled technical data to authorized Cambodian dual and third-country nationals working on technical assistance agreements, manufacturing license agreements, and warehouse and distribution agreements.
Conclusion
The DDTC’s amendment to ITAR § 126.1 marks a significant shift in US defense trade policy toward Cambodia, opening the door for regulated defense trade activities subject to standard review and compliance requirements. Companies engaged in the export of defense articles and services are encouraged to review their compliance programs and assess new opportunities in light of this regulatory development.
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