What is the “no undercut” policy in the MTCR?

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In the MTCR, as well as the Nuclear Suppliers Group and the Australia Group, there is a “no undercut” policy. This means that if your license is denied because the United States determined it was detrimental to national security or foreign policy, the United States will notify the other members of the regime, who have agreed to consult with the United States before approving an export of the same or similar items to the same end-user. This does not apply to “catch all” denials of items not on the MTCR annex, but in practice many countries take into consideration denials by regime partners when reviewing other license applications.

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