Export Control Briefing

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					International Traffic in Arms Regulations/
   Export Administration Regulations

          ITAR/EAR Training
             for Auditors

          Required Training for All
             Nadcap Auditors
 The following presentation is required reading for
  all Nadcap Auditors. This information is provided
  here to keep you abreast of Federal regulations
  that may impact your audits. It is essential that
  you be aware of this law to assure compliance.
 Please review the following information, print out
  the training affirmation page of the presentation
  and sign and return to PRI.
 Following review of this information, should you
  have additional questions, contact your Staff
         What is ITAR & EAR?
 International   Traffic in Arms Regulations
   – Code of Federal Regulations Parts 120 – 130
   – Export Administration Regulations

Full text of the Federal Law available at

  “I am an Auditor --
                 Not an Arms Trafficker!”
How Does this Impact Me?
 Job audits and your ability to review blueprints,
  specifications, or other documentation may be
  impacted by this law.
 U.S. Citizens, Registered Aliens, and valid
  Licensees are allowed to review this information,
  but then incur some responsibility under this law.
  These individuals are unrestricted.
 Non-U.S. Citizens (not qualified by above) are not
  allowed to review material covered by this law and
  are considered restricted.
 All auditors shall follow the requirements in
  NIP 7-07.
      What is the Impact to Me?
 Many    Nadcap participating prime contractors,
  are bound by this law and are required to
  assure control and relevant education.
 As you audit their parts, you must be aware of
  the requirements of this law should you
  encounter any ITAR/EAR hardware.
 The law provides for penalties including fines,
  jail, and civil penalties under U.S. criminal

           Technical Data is an
          Exportable Commodity
 Technicaldata is included as an export under the
  ITAR regulations (
  – Information required for the design, development,
    production, manufacture, assembly, operation,
    repair, testing, maintenance or modification of
    defense articles. This includes information in the
    form of blueprints, drawings, process
    specifications, photographs, plans, instructions,
    and documentation.

 The   definition of Export includes
  – Disclosing (including oral or visual disclosure)
    or transferring technical data to a foreign
    person whether in the U.S. or abroad or
  – Performing a defense service on behalf of, or
    for the benefit of, a foreign person, whether in
    the U.S., or abroad

   Nadcap Internal Procedure 7-07

 NIP  7-07 has been issued to address Nadcap
  requirements with regard to ITAR and EAR.
 As defined in NIP 7-07, it is the Supplier’s
  responsibility to identify any auditable material
  that is restricted under ITAR and EAR.
   – The Auditor shall not be held liable for any
     unauthorized transfer of Restricted Data, unless
     such Auditor knew or should have known of
     the restricted nature of the data.
  Nadcap Auditor Responsibilities
 Nadcap   Auditors shall be thoroughly familiar
  with the requirements of NIP 7-07.
 Nadcap Auditors shall comply with the
  requirements NIP 7-07.
 Nadcap Auditors shall to aware of the
  ITAR/EAR regulations and understand the
  impact of these regulations.
 Nadcap Auditors shall know their status as
  restricted or unrestricted and the roles and
  responsibilities of that status.
Nadcap Auditor Responsibilities (Continued)
   Auditable  material restricted by
    ITAR/EAR shall not be posted on
    eAuditNet or removed from the supplier
    facility by the Auditor. Contact the Staff
    Engineer for direction if objective
    evidence is necessary to support audit.

                                        - 10 -
 Recognizing ITAR/EAR Material
 May   be identified as
   – ITAR/EAR Control
   – Export Control
 Identification   may be on:
   – Face of drawing
   – First sheet of specification or embedded in text
   – Purchase Order
 May  not be identified as such, but is on
  the covered Munitions List
                                               - 11 -
 Applicable at Non-U.S. Suppliers
 Suppliers located outside of the U.S. may be
  licensed under this legislation and may be
  processing ITAR/EAR material
 As Auditors for PRI and Nadcap, Restricted
  Auditors must be especially vigilant to comply
  with this U.S. law and avoid review of any
  ITAR/EAR material.

                                          - 12 -
           Overview of ITAR/EAR
 An overview of the ITAR/EAR Law follows. This
  overview was originally presented at the NASA Export
  Control Program website at
  and has been modified for purposes of relation to
  Nadcap. While the examples given relate to NASA
  activities, all items on the U.S. Munitions List are
  covered by this law.
 Following review of this information and NIP 7-07 at
  the end of this presentation please print out the
  following page, sign and return via fax to the Auditor
  Staffing & Training Dept., +1 724/772-1699.

                                                - 13 -
Unrestricted Auditors – Citizens of the
USA, Registered Aliens (Green Card Holders)
and valid licenses issued to non-US citizens
who are permitted access to information
restricted under ITAR and EAR Guidelines.
Restricted Auditors – Non-US citizens who
are not qualified to have access to information
restricted under ITAR and EAR Guidelines.

                                          - 14 -
                                     Affirmation of
                                   ITAR/EAR Training
  I have read the ITAR/EAR Overview and NIP 7-07 and I understand
  my role and responsibilities under this law. I understand that I am
  considered a

   Restricted or Unrestricted Auditor
          Circle the Appropriate

   and will act in accordance with the requirements.
   I understand that penalties for violation include fines, jail, civil
   penalties under U.S. criminal statutes.
   If, during the course of a Nadcap Audit, I should knowingly come into
   contact with ITAR/EAR material, I shall act in accordance with NIP 7-07.
       Please fax to +1 724/772-1699 – Auditor Staffing & Training Dept.

                                                                     - 15 -

  This material is intended only as an overview tool and does
   not provide all substantive information needed to make a
   responsible export decision. Please contact your Center
   Export Administrator or Counsel for assistance in
   interpreting and applying U.S. export control laws and
   regulations to your specific export or import requirement.

 Bob Tucker
Director, Assessments and Technology Division,
Office of External Relations
                                                         - 16 -
and NASA Export Administrator
Just What Is An Export Anyway?
   A Simplified Definition
    – The transfer of anything to a “FOREIGN
      PERSON” by any means, anywhere,
      anytime, or the knowledge that what you
      are transferring to a “U.S. PERSON”,
      will be further transferred to a

                                        - 17 -
U.S. Export Laws and Regulations
 AECA    and ITAR (USML) - 22 CFR 120
  – covers items such as Space Launch Vehicles (e.g.,
    the Space Shuttle), rocket engines, certain
    spacecraft (including all remote sensing satellite
    systems), missile tracking systems, etc. (both the
    hardware and the technology)
 EAA   and EAR (CCL) - 15 CFR 730
  – covers what is commonly referred to as “dual-use”
    items, including the Space Station (the hardware
    and certain technology)

                                                 - 18 -
   STATE                              WHITE HOUSE
   COMMERCE                            – Office of Science &
    – Bureau of Export Affairs            Technology Policy
                                        – National Security Council
                                        – U.S. Trade Representative
    – Defense Threat Reduction
    – Joint Chiefs of Staff (JCS)      IC
    – Others                           TRANSPORTATION
   Arms Control &                      – Federal Aviation
    Disarmament Agency
   TREASURY                           JUSTICE
                                        – Federal Bureau of
    – Customs
    – Office of Foreign Assets
      Control                          ENERGY

                                                              - 19 -
U.S. Export Laws and Regulations
 Examples of Other U.S. Government
 Players, Laws & Regulations
  –   Drug Enforcement Administration (21 CFR 1311)
  –   Food and Drug Administration (21 USC 301)
  –   Department of Interior (50 CFR 17.21,22,31,32)
  –   Department of Treasury (31 CFR 500)
  –   Department of Energy (10 CFR 205.300, 10 CFR 110 & 810)
  –   Others

                                                         - 20 -
    Reasons Certain Exports are
 National Security (NS)
 Foreign Policy (FP)
 Proliferation (MT, NP, CB)
 Short Supply (SS)
 Anti-Terrorism (AT)
 Crime Control (CC)
 High Performance Computer (XP)
 Regional Stability (RS)
 UN Sanctions (UN)
                                   - 21 -
The International Traffic in Arms
       Regulations (ITAR)
22 CFR 120-130
 Administered by the Department of State (Office
  of Defense Trade Controls)
 The United States Munitions List (USML)
    – 21 categories of “Defense Articles/Services”
    – If an item is listed, it is subject to the ITAR
         Example: Category IV - Launch Vehicles, Guided
          Missiles, Ballistic Missiles, Rockets, Torpedoes,
          Bombs and Mines
         Example: Category XV - Spacecraft and Associated
                                                    - 22 -
The United States Munitions List
   I - Firearms                               *XIII - Auxilary Military Equipment
   II - Artillery Projectors                  XIV - Toxicological Agents and
   III - Ammunition                            Equipment and Radiological Equipment
   *IV - Launch Vehicles, etc.                *XV - Spacecraft Systems and
   *V - Explosives, Propellants,               Associated Equipment
    Incendiary Agents and Their                XVI - Nuclear Weapons Design and
    Constituents                                Related Equipment
   VI - Vessels of War and Special Naval      XVII - Classified Articles, Technical
    Equipment                                   Data and Defense Services Not
   VII - Tanks and Military Vehicles           Otherwise Enumerated
   VIII - Aircraft and Associated             XVIII - Reserved
    Equipment                                  XIX - Reserved
   IX - Military Training Equipment           XX - Submersible Vessels,
   X - Protective Personnel Equipment          Oceanographic and Associated
   XI - Military Electronics
                                               XXI - Miscellaneous Articles
   *XII - Fire Control, Range Finder,
    Optical and Guidance and Control
                                                                          - 23 -
 Important   ITAR Definitions
  – “Defense Article” - any item on the USML,
    including “technical data”.

                                         - 24 -
 Important      ITAR Definitions
  – Public Domain - information which is
    published and which is generally accessible or
    available to the public:
      through   sales at news stands and bookstores;
      through subscriptions which are available without
       restriction to any individual who desires to obtain or
       purchase the published information;
      through second class mailing privileges granted by
       the U.S. government

                                                     - 25 -
 Important   ITAR Definitions
  – Public Domain (cont’d)
     at libraries open to the public or from which the
      public can obtain documents;
     through patents available at any patent office

     through unlimited distribution at a conference,
      meeting, seminar, trade show or exhibition,,
      generally accessible to the public, in the United

                                                   - 26 -
 Important     ITAR Definitions
  – Public Domain (cont’d)
     through  public release (i.e.., unlimited distribution)
      in any form (e.g., not necessarily in published form)
      after approval by the cognizant U.S. government
      department or agency.
     through fundamental research in science and
      engineering at accredited institutions of higher
      learning in the U.S. where the resulting information
      is ordinarily published and shared broadly in the
      scientific community.

                                                     - 27 -
 Important   ITAR Definitions
  – Public Domain (cont’d)
     Fundamental   research is defined to mean basic and
      applied research in science and engineering where
      the resulting information is ordinarily published
      and shared broadly within the scientific
      community, as distinguished from research the
      results of which are restricted for proprietary
      reasons or specific U.S. government access and
      dissemination controls.

                                                  - 28 -
 Important   ITAR Definitions
  – Public Domain (cont’d)
               research will not be considered
     University
      “fundamental research” if:
       – the University or its researchers accept other restrictions
         on publication of scientific and technical information
         resulting from the project or activity, or
       – the research is funded by the U.S. government and specific
         access and dissemination controls protecting information
         resulting from the research are applicable.

                                                          - 29 -
 Important   ITAR Definitions
  – Technical Data - information which is
    required for the design, development,
    production, manufacture, assembly, operation,
    repair, testing, maintenance, or modification of
    “defense articles”; classified information
    related to “defense articles”; information
    covered by an invention secrecy order; software
    directly related to “defense articles”.

                                             - 30 -
 Important   ITAR Definitions
  – Technical Data (cont’d) - does not include
    information concerning general scientific,
    mathematical or engineering principles
    commonly taught in schools, colleges and
    universities or information in the “public
    domain”. It also does not include basic
    marketing information on function or purpose
    or general system descriptions of “defense
                                           - 31 -
 Important    ITAR Definitions
  – U.S. Person - a natural person who is a lawful
    permanent resident as defined in 8 U.S.C. 1101(a)(20)
    or who is a protected individual as defined by 8 U.S.C.
    1324b(a)(3). It also means any corporation, business
    association, partnership, society, trust, or any other
    entity, organization or group that is incorporated to do
    business in the U.S. It also includes any governmental
    (federal, state or local), entity.

                                                     - 32 -
ITAR DEFINITIONS - Foreign Person,
  Important    ITAR Definitions
   – Foreign Person - opposite of U.S. Person.
   – Export - sending or taking a “defense article” out of
     the U.S. in any manner, except by mere travel outside
     of the U.S. by a person whose personal knowledge
     includes “technical data”; or transferring registration,
     control, or ownership to a “foreign person” of any
     aircraft, vessel, or satellite covered by the USML,
     whether in the U.S. or abroad; or

                                                      - 33 -
 note for
             ITAR DEFINITIONS - Export
 Export (cont’d) - disclosing (including oral
     or visual disclosure) or transferring in the
     United States any “defense article” to an
     embassy, any agency or subdivision of a
     foreign government (e.g., diplomatic
     missions); or disclosing (including oral or
     visual disclosure) or transferring
     “technical data” to a “foreign person”,
     whether in the U.S. or abroad; or performing a
     “defense service” on behalf of, or for the benefit of, a
     “foreign person”, whether in the U.S. or abroad. -
                                                     - 34
 Proscribed     Countries - 22 CFR 126.1
  – If a country appears on this list, it is (generally) U.S.
    policy to deny licenses, or other approvals, associated
    with exports and imports of defense articles and
    defense services, destined for or originating in that
  – ITAR License Exemptions are trumped if a “foreign
    person” from any of these counties is involved; i.e., a
    license must be applied for.

                                                      - 35 -
        LIST (22 CFR 126.1)
   ANGOLA           NIGERIA
   BELARUS          RWANDA
   BURMA            SOMALIA
   CHINA (PRC)      SUDAN
   CYPRUS           SYRIA
   CUBA             TAJIKISTAN
   HAITI            VIETNAM
   INDIA            YEMAN
   IRAQ              YUGOSLAVIA
   LIBERIA            – SERBIA
                       – MONTENEGO
                     ZAIRE

                                            - 36 -
    The Export Administration
        Regulations (EAR)
 Administered by the Department of Commerce
  (Bureau of Export Administration)
 The Commerce Control List (CCL)
  – Divided into ten (10) categories (0 to 9)
  – Complete listing of items controlled by the
      Example: Category 9- Propulsion Systems, Space
      Vehicles and Related Equipment

                                                - 37 -
The (New) Export Administration
       Regulations (EAR)
                      15 CFR 730-774
Category 0 - Nuclear Materials, Facilities and Equipment and Misc.
Category 1 - Materials, Chemicals, Microorganisms and Toxins
Category 2 - Materials Processing
Category 3 - Electronics
Category 4 - Computers
Category 5 - Communications, telecommunications
Category 6 - Optics, Cameras, Lasers, radar
Category 7 - Guidance, navigation, altimeters, avionics
Category 8 - Submersible systems, scuba, marine equipment
Category 9 - Propulsion Systems, space vehicles,
                                                               - 38 -
 Important   EAR Definitions
  – Export - an actual shipment or transmission of
    items subject to the EAR out of the United
    States; or release of technology or software
    subject to the EAR to a foreign national in the

                                             - 39 -
 Important   EAR Definitions
  – Controlled Technology - specific information
    required for the “development”, “production”,
    or “use” of a product which is itself
    “controlled”. The information takes the form
    of “technical data” or “technical assistance”.

                                            - 40 -
EAR DEFINITIONS - Technical Data
 Important   EAR Definitions
  – Technical Data - May take forms such as
    blueprints, plans, diagrams, models, formulae,
    tables, engineering designs and specifications,
    manuals and instructions written or recorded on
    other media or devices such as disk, tape, or
    read-only memories.
  – Technical Assistance - may involve transfer of
    “technical data”

                                            - 41 -
      Publicaly Available Information
 Important   EAR Definitions
  – Reexport - shipment from one foreign country
    to another foreign country
  – Publicly Available Information - information
    that is generally accessible to the interested
    public in any form and, therefore, not subject to
    the EAR

                                              - 42 -
    Available Technology and Software
 Important   EAR Definitions
  – Publicly Available Technology and Software
    - that technology and software that are already
    published or will be published; arise during, or
    result from fundamental research; are
    educational; or are included in certain patent
    applications (see 15 CFR 734)

                                             - 43 -
EAR DEFINITIONS - Items subject to
                   the EAR
 Important   EAR Definitions
  – Items Subject to the EAR - items listed on the
    Commerce Control List (CCL) and those
    items designated as EAR 99

                                           - 44 -
 ExportControl Classification Number
 (ECCN) - a five character, Alpha-numeric
 symbol; e.g., 9A004
  – First Character (Digit)- identifies CCL category; e.g.,
    9 is Propulsion Systems, Space Vehicles and Related
  – Second Character (Letter)- identifies which of five
    “groups” the item is associated with; e.g., A is
    Equipment, Assemblies and Components

                                                    - 45 -
 ExportControl Classification Number
 (ECCN) - a five character, alpha-numeric
 symbol; e.g., 9A004
  – Third through Fifth Characters (Digits)-
    identifies the type of control(s)

                                               - 46 -
 Classification   Requests
  – If an exporter is unable or uncomfortable in
    determining the “classification” of the item to be
    exported, a “classification” can be requested from
    BXA. BXA is obliged to “classify” an item or advise
    an exporter that an item is not subject to the EAR (and
    may be subject to the jurisdiction of another agency).
  – Typically takes 10 working days from receipt at BXA

                                                    - 47 -
 License   Exceptions - 15 CFR 740
  – Examples
      TMP   (use for certain temporary exports up to one
      GOV (U.S. gov’t official use and use by gov’t
       agencies of cooperating countries in their national
      BAG (your right to take your personal belongings
       out of the country on a trip)
  – CAUTION - Use exceptions with care and
    read all conditions/provisions.
                                                    - 48 -
 Scope
 Foreign   Policy controls requiring individual
  validated license (IVL) if U.S. exporter knows
  or is informed that Commodity is destined to a
  missile activity
 Origin
 Executive order 12735, Nov 16, 1990
 Interim rule announced, Aug 15, 1991

                                          - 49 -
          Nadcap Procedure NIP 7-07
   1.0    PURPOSE
      – This procedure provides requirements for ensuring compliance with the International Traffic in
        Arms Regulations (ITAR) and Export Administration Regulations (EAR). This pertains to the
        assignment of Nadcap Approved Auditors who are not citizens of the United States of America
        to audits and audit review by Task Group and NMC Members.
   2.0 SCOPE
      – In the area of technical audits, specifically ISO9000, QS9000, AS/EN/JISQ9100, Nadcap etc.,
        information regarding audit results are exchanged and accepted routinely. These audits are
        performed by US and non-US citizens and data from these audits are discussed and accepted by
        international customers. Caution must be taken in obtaining audit information, including
        technical drawings that are evaluated by the auditor.
      – The Supplier is responsible for identification of conditions which require protection in
        accordance with ITAR and EAR. Scheduling is responsible to ensure that proper auditor
        resources are scheduled in accordance with identified restrictions. Auditors are responsible to
        identify and report any conditions which my violate controls required by ITAR and EAR. All
        parties shall protect data that is restricted under the ITAR and EAR.
   4.0    DEFINITIONS
      – See Quality Manual for definitions.

                                                                                         - 50 -
Nadcap Procedure NIP 7-07 Cont’d.
   5.0 Guidelines for Restrictions
     5.1 Suppliers Responsibility
          Prior to and at the beginning of the audit, the Supplier shall identify
           specifications, processes, and drawings (referred to as “auditable
           material”) which are restricted under the ITAR and EAR. The
           Supplier shall contact the owner of any information for clarification
           when unsure about whether information is export controlled under
           ITAR or EAR.
          The Auditor should remind the Supplier of this obligation. The
           Auditor shall not be held liable for any unauthorized transfer of
           Restricted Data, unless such Auditor knew or should have known of
           the restricted nature of the data.
          In the event auditable material is under the ITAR and EAR, the
           supplier can either:
              – Request an Unrestricted Auditor, or
              – Work with PRI Staff (Unrestricted Staff per 2.0) to provide and
                discuss appropriate auditable material, so that the PRI staff can
                provide appropriate direction to Restricted Auditors or
              – Limit the audit to auditable material not restricted under the
                ITAR and EAR.
                                                                         - 51 -
Nadcap Procedure NIP 7-07 Cont’d.
   5.2 PRI/Nadcap Responsibility
     – Appropriate guidelines and documentation is essential for conformance to the
        ITAR and EAR. Therefore, the following items shall be included in the business
          a. Supplier agreements notifying applicants of ITAR and EAR
              requirements/concerns shall be signed when scheduling an audit.
          b. The supplier shall be notified by the Scheduling Staff when the auditor is
              assigned whether their scheduled auditor is Restricted or Unrestricted.
          c. No auditable material, restricted by the ITAR and EAR shall be posted on
          d. Auditable material, identified as export controlled and/or otherwise restricted
              by the ITAR and EAR, shall not be removed from the supplier’s property.
          e. Auditors shall be provided appropriate counseling as to the ITAR and EAR
          f. Staff will be provided training as to the intent of these regulations. Training
              will be listed on h-frm-02 “PRI New Nadcap Employee Checklist”, or the
              Affirmation of ITAR/EAR Training sheet, as applicable.
          g. In the event that information covered under the ITAR or EAR are inadvertently
              witnessed by a Restricted Auditor, the auditor shall note this event in their
              Cover Letter in eAuditNet and inform the Supplier. This event shall also be
              formally reported to PRI via telephone call to the appropriate Staff Engineer
              within 1 calendar week following the close of the audit.
                                                                                - 52 -
Nadcap Procedure NIP 7-07 Cont’d.
5.2 PRI/Nadcap Responsibility Continued –

     h. NMC/Task Groups members who are Restricted per
        Section 2.0 shall not review auditable material
        restricted by the ITAR and EAR.
     i. Any exceptions, deviation or non-compliance to
        these guidelines shall be duly noted in an incident
        report (i-frm-37) initiated by the appropriate Staff
        Engineer. The Prime Members of the Task Group
        shall be notified and consulted to determine any
        additional actions required. (i.e. Notification of
        Appropriate Personnel, Organizations, etc.)

                                                   - 53 -
Nadcap Procedure NIP 7-07 Cont’d
   6.0    REFERENCE
   Quality Manual
   7.0     DOCUMENT

Effective Date         Summary

17 Aug 2005            Conversion with minor formatting
                       changes from prior document NIP -016
                       which is cancelled and superseded by this
                       document. No change in content.

                                                         - 54 -

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