ITAR_EAR The Short Overview

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The Short Overview
  The Security Summit
       Bob Ketts
    22 March 2011
• Disclaimer
• ITAR overview
     –   Basis in law
     –   Registration with State Dept.
     –   What is governed
     –   Types of State Dept. authority to export
• EAR overview
     – Licensing
     – ECCN – SNAP R
•   Compliance programs
•   Violations/Sanctions
•   Export reform
•   Sources of training and help
•   Summary
•   Q&A
                  ITAR - basics
• International Traffic in Arms Regulation - The
  regulatory implementation of the Arms Export
  Control Act
   – Administered by U.S. Dept of State
   – Importance to US foreign policy
   – Defense Technology Security Administration (“DTSA”)
• Registration with State Dept. - Any person who
  engages in the US in the business of either
  manufacturing or exporting defense articles or
  furnishing defense services is required to register
  with DDTC.
            ITAR – basics (cont’d.)

• What is covered
   – Defense articles – Hardware designed/developed for a defense
      • US Munitions List (“USML”) in ITAR -21 categories of defense articles
      • Significant Military Equipment (“SME”)
   – Technical Data – Information used to describe defense articles
   – Defense Services – Usually training or maintenance performed
     for benefit of a non-US person
• US Person
   – US citizen
   – Permanent resident of US
   – Granted special asylum by US
             ITAR – basics (cont’d.)
• Types of State Dept authority to export
   – License
      •   Technical data license (DSP-5)
      •   Permanent export license (DSP-5)
      •   Temporary export license (DSP-73)
      •   Temporary import license (DP-61)
   – Agreement
      • Technical Assistance Agreement (“TAA”)
      • Manufacturing License Agreement (“MLA”)
      • Warehouse Distribution Agreement (“WDA”)
   – Exemption to ITAR
      • Mock up
      • Repair of item of US origin
• Export Administration Regulation administered
  by the Bureau of Industry and Security, U.S.
  Department of Commerce
• Export Classification Control Number (“ECCN”)
  – Significantly different approach from State
     • Positive identification of item and assignment of ECCN
  – Basis for determining if license is required
  – Most articles do not require license
  – SNAP R – Means of getting USDOC to validate ECCN
          Compliance Programs
• Required for both ITAR and EAR
  – Culture of Export Compliance
  – Written organization
  – Training
  – Technology Control Plan
  – Subject to review by US Depts. of State and
     • State Dept. visit of Cubic
• Suspected violations must be reported to either
  State or Commerce
  – Voluntary (self) disclosure
  – State and Commerce different approach
• Sanctions
  – Civil/Criminal Fines
  – Imprisonment
  – Debarment
• Consent agreements
  – BAES $400M
  – ITT $100M
                        Export Reform
• Defense Trade Advisory Group
• Administration seeking to establish five singles
    –   Single list vice USML and CCL
    –   Single agency vice State, Commerce and Justice
    –   Single regulation vice ITAR and EAR
    –   Single enforcement vice 22 agencies
    –   Single IT system vice 1 paper system and 2 electronic that don’t talk to
        one another
• Important features of new system
    –   “Bright line” separating defense and commercial items
    –   Tiered list of items
    –   Positive identification
    –   Align USML and CCL
• “Higher fences around fewer things”
      Sources of Training and Help
• DDTC and BIS websites
• BIS training classes
• DDTC Response Team 202-663-1282 or
• Society for International Affairs (“SIA”)
   – Spring conference various locations (May – Long Beach)
   – Fall (Nov.) conf in Washington, DC
• San Diego Trade Compliance Group
• ITAR boot camp
• Strategic Shipping, UK
•   Ignorance is no excuse
•   USG expects culture of export compliance
•   Personal commitment of top company officers
•   Help is available but have to work for it
• Any and all welcome

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