u.s. department of state – defense article ◦ international traffic in arms regulations (itar)...
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U.S. Department of State – Defense Article◦International Traffic in Arms Regulations
(ITAR)◦United States Munitions List (USML)
U.S. Department of Commerce – Dual Use Commercial Items◦Export Administration Regulations (EAR)◦Commerce Control List (CCL)
Regulatory Environment
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Sending or taking a defense article out of the U.S
Transferring ownership of USML items Disclosing or transferring tech data Performing a defense service Sale, transfer, or proposal to sell or transfer
articles or services in certain countries
What is an ExportAccording to the ITAR, an Export is…
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Export occur in multiple ways◦Faxes/emails◦Collaborative environments◦Casual conversation◦Travel / trade shows◦Meetings / site tours◦Translation services
What is an ExportAccording to the ITAR, an Export is…
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U.S. Person vs. Foreign PersonForeign Persons also include Overseas Locations
U.S. Person Foreign Person
A U.S. citizen Lawful permanent
resident alien ◦ Form I-551 (green card)
U.S. Government entity Any corporation, business
association, partnership, society or any other entity, organization or group that is incorporated to do business in the U.S.
Foreign national Foreign corporation /
business not organized in the U.S.
International government / agencies
Representative of a Foreign Interest (RFI)
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Information that is required for design, development, production, manufacture, assembly, operation, repair, testing, maintenance, or modification of defense articles…engineering “know-how”◦Blueprints • technical drawings •
photographs◦Plans • instructions • proposals◦Specifications • statements of work◦Test procedures / results◦“How-to” information
U.S. Controlled Technical Data
ITAR requires a record of ALL exports
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Software directly related to defense articles Classified information relating to defense
articles and defense services
ITAR requires a record of ALL exports
U.S. Controlled Technical Data
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Publicly available information◦Newsstands • unrestricted subscriptions◦2nd class mail • libraries
Publicly released by USG◦DOD Statement A
Basic marketing information on function or purpose
General scientific, mathematic, and engineering principles, or fundamental research◦Schedules • parts lists • top-level drawings
Public DomainWhat is Not Technical Data
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Defense Article◦Any item or technical data listed on the USML
See 22 CFR 121 (ITAR) Defense Service
◦Furnishing assistance (incl. training) to a foreign person, whether in the U.S. or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, processing, or demilitarization, destruction, processing, or use of defense articles
◦Furnishing technical data to a foreign person
Defense Article / Service & SME
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Significant Military Equipment (SME)◦Special export controls◦Capacity for substantial military use and / or
capability
Defense Article / Service & SME
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Commercial items are subject to the Export Administration Regulations (EAR) from the Department of Commerce (DoC)
According to the EAR◦A commercial export is the actual shipment
or transmission of items subject to the EAR out of the U.S.
◦The release of technology or software subject to the EAR to a foreign nation in the U.S.
Commercial Items
Commercial items are CONTROLLED
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The Bureau of Industry and Security (BIS) is responsible for implementing and enforcing the EAR◦BIS maintains the Commerce Control List
(CCL) within the EAR and includes items subject to the export licensing authority of BIS E.g. commodities, software, technology
Commercial Items
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◦Dual use items are those which have both commercial and military or proliferation application May require a commodity jurisdiction from
the DoC to determine which agency ultimately controls them
Exporting a commercial item may require a DoC export license or exception
Commercial Items
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SSEALS Request Initiated
Export Prepares Package
Corporate Export Office Reviews
Staffed to DoS & Agencies
Approval from DOS
Application Process
Cycle Time Varies (2-4 Months)Be Smart; Apply Early!
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Technical Assistance Agreement (TAA)◦Similar to a contract; authorizes the
performance of defense services or the disclosure of technical data to a foreign person
Manufacturing License Agreement (MLA)◦Similar to a contract; grants a foreign person
the authorization to manufacture defense articles abroad
Licenses◦Permit the export or temporary import of a
specific defense article or technical data
AuthorizationsAll Authorizations are Subject to Limitations and Provisos
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ITAR exemptions◦Certain pre-defined conditions which allow
relief from obtaining an export license or other written approval from the DDTC to export defense articles or defense services Applicable on a case-by-case basis Each use requires meeting a unique set of
specific criteria
AuthorizationsAll Authorizations are Subject to Limitations and Provisos
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All exports to foreign persons must be authorized◦Third-country • dual nationals◦Subcontractors • sub-licensees
All authorizations are country, product, and purpose specific◦There is no blank check
Limitations and provisos are cumulative◦They do not go away without an official
request for relief
Authorization Considerations
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Prior approval / notification depends on many variables
All classified authorization is always transferred government to government and is limited to specific information◦There is no overall classification for
authorization Subcontractor vs. sub-licensee – See next
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Authorization Considerations
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Sub-Licensee◦Sub-licensing arrangements occur when the
foreign party of an MLA or TAA provides technical data to another foreign party in order to fulfill the requirements of the agreement
Authorization ConsiderationsIn-Country Sub-Contractors vs. In-Country Sub-Licensees
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All sub-licensees Must be approved by the DoS Must execute a Non-Disclosure Agreement
(NDA) which incorporates all the provisions of the basic agreement which refer to the USG and DoS
Sub-licensing authorizes a foreign-to-foreign transfer LMC cannot provide information to a sub-
licensee
Authorization ConsiderationsIn-Country Sub-Contractors vs. In-Country Sub-Licensees
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Sub-Contractors (◦Contracting by a prime contractor of specific
support to a third party to aid in the execution of a program or project
◦ITAR data is not transferred to an in-country subcontractor
◦Do not need to be approved by the DoS
Authorization ConsiderationsIn-Country Sub-Contractors vs. In-Country Sub-Licensees
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Export, attempt to export, re-export, or provide◦Defense article / service, or tech data
without prior authorization from DOS◦Transmit tech data electronically or hand-
carry◦Commercial or dual-use item with an
appropriate license or authorization from the DOC
ViolationsIt is Unlawful to…
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◦Violate any terms or conditions of licenses or approvals
◦Make a false statement, misrepresent, omit material facts
ViolationsIt is Unlawful to…
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Individuals may be◦Fined up to $1M◦Imprisoned up to 10 years
Company may be◦Denied export privileges◦Fined $1M for EACH occurrence◦Denied the privilege of doing business with
the USG◦Incur substantial negative publicity
Cost of Ignoring Regulations