Essential Features of an ITAR Compliance Program
International Traffic in Arms Regulations (ITAR) compliance is a requirement for companies entering markets with defense related applications. To establish an effective ITAR compliance program all segments of a business must be involved. Important features of an ITAR program include the following:
- Registration with the Directorate of Defense Trade Controls (DDTC)
- Establishing an Export Compliance Officer
- An effective and continuous training program for all employees
- Effective Cybersecurity
- Visitor Access Control
- A continuing review and evaluation of the ITAR program
DDTC registration is a requirement for organizations involved with the manufacture, export, temporary import, brokering, provision of technical services, or involved with technical data of ITAR controlled items as defined on the United States Munitions List (USML) Part 121 of the ITAR.
Export Compliance Team
The primary positions for the development and maintenance of a compliance program are the Empowered Official and the Export Compliance Officer.
The Empowered Official is an individual directly employed by an organization who is legally empowered to authorize license applications. The Empowered Official verifies the legality of transactions and has the right to refusal of any license application.
An Export Compliance Officer (ECO) is the appointed individual of an organization who has the prime responsibility and approval authority for the ITAR export compliance program. As such the ECO duties include maintaining DDTC registration, submission of Technical Assistance Agreements (TAA), creation of Technology Control Plans (TCP), ensuring that information and facility security is maintained, filing of Temporary License Exemptions (TLA), record keeping, and submission of Voluntary Disclosures.
Export Compliance Training
Regular training is a requirement for all involved employees in an export compliance program. This is a requirement by both the Bureau of Industry and Security (BIS) and the Department of State Directorate of Defense Trade Controls (DDTC).
The security of classified and Controlled Unclassified Information (CUI) in the the Defense Industrial Base (DIB) has long been a source of concern for the Department of Defense (DoD). In response the DoD has established the Cybersecurity Maturity Model Certification (CMMC) framework, a criteria for cybersecurity requirements and basic cyber hygiene can be established for DoD contractors.
CMMC requirements are largely based on NIST 800-171 Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations. There are however, other requirements including FAR 52.204-21.
Maintenance of site security is essential for the protection of information. This security includes control of facility access, posting of areas of limited access, and visitor badges.
Review and Evaluation of the Export Compliance Program
The export compliance program should be audited and reviewed at regular intervals. This review should be conducted with the participation of upper management.
The Risks of ITAR Violations
Companies attempting to find a quick fix will often overlook the complexities involved in meeting ITAR requirements and place themselves in legal jeopardy. Because of this they place themselves at risk of failing to comply with ITAR and facing severe penalties. These penalties can include civil fines as high as $500,000 per violation or criminal fines of up to $1,000,000 and 10-years imprisonment per violation. They can also include being barred from future exports and a loss of reputation of a business.
Meeting ITAR Requirements Effectively
Meeting ITAR requirements effectively should include by in from the top down. It must involve all employees. It must ensure security of a company’s facilities and maintain control of sensitive data.
A properly established program can continually protect a business by integrating with Quality Management Systems (QMS) to evaluate itself. This allows for a means to detect risks in ITAR Compliance and adjust procedures accordingly.
If you are part of a large corporation or a small company with a part-time compliance person, CVG Strategy has the compliance and training programs to help you meet ITAR requirements. Often smaller businesses often don’t have the bandwidth to dedicate to adequate export compliance. Because of this we offer outsourced Export Compliance Officer services. We also offer signs and accessories to aid in Visitor Access Control on our ITAR Store.
CVG Strategy, LLC is recognized the world over as the premier provider of customized ITAR Consulting and ITAR & Export Compliance Programs and Training that addresses critical U.S. Government regulations, from Export Administration Regulations (EAR), to the International Traffic in Arms Regulations (ITAR) and Office of Foreign Asset Controls (OFAC) and other regulatory agencies and more.