What is ITAR compliance? The International Traffic in Arms Regulations (ITAR) are, as the title indicates, rules governing trade in munitions. While that summary is accurate, it leaves many open questions. What are “munitions”? How is trade in munitions defined? Who is engaged in such trade, what authorizations are United States exporters and foreign re-sellers required to obtain and how do they get them? What procedures are required for ITAR compliance?
Not all munitions are subject to the ITAR, and certain items that are would not be considered munitions in the popular sense of the term. For ITAR purposes, qualifying items are identified on the United States Munitions List (USML). The USML is divided into 21 categories, each of which covers broadly similar articles (for example, military aircraft and designated sub-assemblies). Each USML category also describes technical data – that is, controlled information relating to munitions – in its purview.
One feature of the ITAR that caused much confusion among exporters was the “catch-all” coverage of parts and components specially designed or modified for another USML article. This description caught many items that may have been adapted for use as munition parts, but were not weapons in themselves and indeed may have been nearly indistinguishable from parts for civilian applications.
Due to implementation of Export Control Reform changes, the ITAR now has a less restrictive definition of when parts and components are “specially designed” for USML articles. In tandem with this change, the majority of parts and components have been moved from the USML to Commerce Department jurisdiction. Even after these reforms were put into place for most USML categories; however, a substantial number of parts remains subject to ITAR compliance.
The ITAR impose strict requirements on transactions involving USML hardware and technical data. With limited exceptions, State Department authorization is required for exports and temporary imports of USML items. Defense trade treaties with Australia and the United Kingdom resulted in special rules for those countries. Another area of ITAR coverage is provision of defense services, which can include military training and other assistance. U.S. exporters of USML items also must register annually with the State Department, and non-exporting producers are required to as well. The ITAR also govern trade in munitions that are not of U.S. origin, when engaged in by United States persons and their foreign affiliates.
Legal Assistance with ITAR and USML Issues
My ITAR practice has involved me in nearly all aspects of the regulations. I provide USML classification guidance regarding both hardware and technical data, and recently have been called upon to address changes resulting from Export Control Reform. Where appropriate, I have obtained Commodity Jurisdiction determinations as to whether an article is covered by the ITAR. In addition, I assist companies to obtain authorization for exports and post-export retransfers of ITAR items. I have particularly extensive experience with technical data issues, and have obtained or revised dozens of technical assistance agreements and prepared manufacturing license agreements and DSP-5 technical data license applications. Also, I assist clients in establishing or improving ITAR compliance programs and technology control plans, ensuring their registrations are prepared correctly and addressing compliance issues. Companies have enlisted my regulatory experience in conducting audits of their compliance programs and due diligence of potential acquisitions, as well.