What is ITAR Compliance and why is it important to me? Many companies ask themselves this question every day.
ITAR Compliance is based on the ITAR (International Traffic in Arms Regulations) and the EAR (Export Administration Regulations) are export control regulations run by different departments of the US Government. Both are in place to give the government a tool to ensure that restricted technologies do not get into the wrong hands. An export license may be required for both ITAR and EAR controlled items if the parties involved are non-US citizens or involve non-US charted corporations.
ITAR – International Traffic in Arms Regulations
The more stringent of the two sets of regulations was written for articles that are developed for defense-related applications. Articles specifically designed or otherwise intended for military end-use are enumerated on the United States Munitions List (USML) or the Missile Technology Control Regime (MTCR) Annex and are therefore controlled by International Traffic in Arms Regulations (ITAR). The ITAR is administered by the Directorate of Defense Trade Controls (DDTC) at the U.S. Department of State (DoS). ITAR Restricted articles include products / systems, services, and information (technical data).
Significant Military Equipment (SME) articles are those which have “capacity for substantial military utility or capability” including tanks, high explosives, naval vessels, attack helicopters (and more) which are noted on the USML with an asterisk.
An export license is required to exchange technical emails, teach how to repair an ITAR restricted article and shipping the ITAR controlled item to a non-US Person (Foreign citizen or foreign chartered corporation) whether they are inside they United States or outside the United States.
All companies must self-classify their products and services in order to determine the degree of necessary control on restricted articles subject to the International Traffic in Arms Regulations (“ITAR”) per USC 22 CFR 120.6. ITAR Compliance requires the control of restricted technical articles by manufacturing, service providers, distributors, engineering companies as well as freight forwarders and brokers.
ITAR Compliance Program
The DDTC requires that a company who has restricted articles or performed restricted services to control their company with procedures in accordance with the DDTC Compliance Program Guidelines.
EAR – Export Administration Regulations
All other items not specifically listed in the USML are controlled under the Export Administration Regulations (EAR), administered by the Bureau of Industry and Security (BIS) at the U.S. Department of Commerce (DoC). The Commerce Control List (CCL) lists items by category and each entry has its own Export Control Classification Number (ECCN). ECCNs include specific controls for Chemical & Biological Weapons, Nuclear Nonproliferation, National Security, Missile Technology, Regional Stability, Firearm Convention, Crime Control, and Anti-Terrorism. The level of control depends on the nationality of the parties involved in the transaction, country being exported to, destination party, and end-use. In addition, there are “500 Series” and “600 Series” items that are more strictly controlled than the rest of the CCL, but less strictly controlled than the articles on the USML. These “500 Series” and “600 Series” align with the international Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, a multilateral export control regime with 41 nation members, including the United States.
All companies must self-classify their products and services in order to determine the degree of necessary control on restricted articles as they are listed in the Commerce Control List (“CCL”) USC 15 CFR 736.2 (General prohibitions and determination of applicability) under the Export Administration Regulations (“EAR”). These regulations require the control of restricted technical articles by manufacturing, service providers, distributors, engineering companies as well as freight forwarders and brokers.
EAR Compliance Program
BIS requires that a company who has restricted articles or performed restricted services to control their company with procedures in accordance with the BIS Core Elements of an Effective Export Management and Compliance Program.
ITAR & Export Compliance Program
CVG Strategy offers a program that combines both the ITAR Compliance Guidelines from the DDTC and the EAR Compliance Elements from BIS.
Here is how it maps out: