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Export Compliance: Ask The Experts

 

 

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My company is a manufacturer of piece parts that are often designated as ITAR by our direct customers, for some parts that customer has mandated we use a source that is not registered with the DDTC as the sole source for a finishing process we cannot do in house. We cannot move the part to a DDTC source without our customer's approval, but at the same time the finisher refuses to register with the State Department. If we can get the finisher to certify that they employee no non-US citizens or something along those lines, is that sufficient? We are looking for other options to satisfy ITAR and our customers.

The ITAR does not explicitly prohibit you doing business with an unregistered finisher. 

As a first step I would contact the export compliance people in the customer who is requesting that you use a supplier who is not registered with DDTC.  I would explain to them that their company is asking your company to use an unregistered party for finishing.  I would ask if they plan to disclose in their license applications to export the ITAR items in question that the parts were manufactured/finished by a party not registered with DDTC.  It likely is a material fact that the ITAR would require to be included on applications involving those items.  Knowingly omitting a material fact would be a violation.

If the applicant reveals the material fact that the items were finished by an unregistered party, DDTC likely will RWA the application.  I would assume DDTC likely would contact the finishing company to inquire why it is knowingly manufacturing defense articles without registering with DDTC. DDTC might ask the applicant why it instructed your company to use an unregistered finisher.

Based on the likely chain of events, your customer may choose an alternate course of action.


We have a customer based within the US, but are an international company with headquarters in the Netherlands. An employee from the customer is from the Netherlands and would like to tour our facility. We are an ITAR registered facility, and he stated he does have a work permit for the US. If the company is based within the US, would it be okay for the Netherlands visitor to be given a shop tour?

A person who has a work visa is not a foreign person according to the ITAR.  It sounds like the person in question has a work visa.  You may not visually, orally, or otherwise release ITAR or EAR data that requires a license for the home country(ies) of the person.  You can show the person your shop or anywhere else as long as you make sure the person will not be exposed to any license-required data through means such as observing activities, seeing written data, or receiving oral data.


A university professor received a conference invitation from an Iranian University to be a key note speaker and to present a paper in the field of Civil Engineering for bridges and will pay costs.  The conference will be held in Iran. Can the professor go to the conference?

There are many specific facts that we would have to know to analyze this situation.  The trip might be doable but I recommend that you or somebody else does some detailed analysis of the facts of your situation and the various applicable export controls (OFAC, EAR, ITAR) and not rely on the free advice you can find online.


I am a Search Consultant working with a client who performs a metallurgical surface treatment for customer furnished equipment that will become incorporated into aircraft engines that may be exported for military applications. Does my Client require ITAR registration or will ITAR registration by their customer satisfy the requirements of the regulation?

A lot of information is required to determine if some or all of the items are on the USML.  If any of them are, your client likely needs to register with DDTC.  The fact that another party is registered does not help your client.  Your client may have significant EAR export control issues too.  I recommend somebody do a thorough analysis of EAR and ITAR issues to ensure compliance.


Can a buyer classify a vendor/manufacturer's part for export, if a vendor/manufacturer can not or will not make the determination?

The EAR and ITAR allow anybody to do export compliance classifications.  For certain items that employ encryption or are encryption related, the EAR requires that you register with BIS as one of the steps involved in compliance and classifications.


What is the EU or rest of the world ECCN equivalent for EAR99?

We cannot assume all countries in the world have the same equivalent for EAR99.   In fact, it likely is the case that some countries have more than one classification that could correspond to EAR99.   You have to look at the rules of each country to get the answer for that country.  That said, many EU countries do not have an export compliance classification for many of the things the US classifies as EAR99.


Do you know where I can find a sample ITAR Compliance Manual?

The danger of looking at somebody else's compliance manual is that everybody needs a manual specially designed and modified for their own activities.  Manuals are not one size fits all, or one size fits most.  You can google it and maybe find something to help you.


I have the following questions. Do I need a U.S license to send back to the U.S.(manufacturer) an item controlled by ECL for repair? And do I need a license if I would like to send it anywhere in the U.S. for service or repair?

The EAR does not require a license for the important of 9A101 items into the United States for repair.  Depending on the situation, the US exporter may have to get an export license if an exception or NLR are not available.


I work for a U.S. company that develops software (ECCN 5D992.c mass market encryption).  We have office in China and software can be sold to Chinese aero/def companies (as permitted by Part 744 and all other Parts that control 5D992.c).  BUT, if during a consulting engagement, if a Chinese employee assists a Chinese aero/def customer on how to use software to improve their articles in any way, this would cross the line into providing a defense service and an ITAR violation - what are the parts of the ITAR I can reference - that show a Chinese office of a US company cannot provide defense services.  I've shown management reference to arms embargo on China for ITAR items, but since we are strictly EAR, I need to find where it’s stated that a foreign office/foreign employees of U.S. owned company would also be subject to ITAR.

The ITAR is not clear as to how its controls on defense services applies to foreign parties (including foreign subsidiaries of US companies) providing assistance without the involvement of US persons.  Some companies believe the ITAR does not control such activities.

The ITAR controls on defense services make it clear that parties in the United States including their foreign branch offices  may not provide assistance to a foreign party related to development, etc. of a defense article.

Another issue in your situation is what US export controls are applicable to the technical data or technology that is transferred to the Chinese recipient.


My question has to do with parts that are absolutely not ITAR controlled. The country that wants to possibly have us broker aerospace hardware like rivets, nuts and bolts is not on the list of countries that USA and Canada will not ship to. However, the parts would be put on a US military aircraft where they do sub-contract work. The parts will never enter Canada but we would buy them from our office if we find this is not against any regulations. We have in the past refused to be involved but now I am curious.

Brokering controls only apply to brokering ITAR items.


I am wanting to temporarily export ITAR rough castings from the US to one of our companies in Mexico for an early cleaning process. What export license do I need to apply for?

Most likely the DSP-73 temporary export license is what you need.


Under ITAR 22 CFR 126.5 Canadian exemptions, Canadian certified manufacturer can work with ITAR products. Is Controlled Goods Certificate sufficient foe a Canadian company to work ITAR manufacturers? And if it is sufficient is there any exception for some products?

The ITAR Canadian exemptions require that the Canadian companies receiving defense articles and defense services be registered with the Controlled Goods Directorate to receive eligible defense articles and defense services.  You must prevent the transfer of ITAR technical data to ITAR unauthorized nationals or obtain an license, agreement or exemption approval for such nationals.

You do not have to be registered to receive items under an approved ITAR license or agreement, but you have to make sure you do not retransfer ITAR technical data to foreign persons.


We are a UK calibration company. One of our customers has an ITAR item that has to be calibrated in the United States. What do we need to do to be able to ship this on our customers behalf?

The ITAR controls temporary import into the United States of ITAR controlled items.  Typically, the company in the US that will receive the items is responsible for ITAR compliance, so I recommend you contact the US company and find out how it wants to handle the temporary import into the US.


When I am exporting computers overseas and they are classified as 4A994, are the monitors, cables, power cords, modems , mouses, etc. also considered 4A994, or should they be classified as EAR99?

The other items may have a classification other than 4A994.  A modem might be 5A991.  Cables are normally EAR99.  A monitor could be a classification other than EAR99.


We have a Canadian customer who purchases ITAR regulated goods from us.  We permanently export them on DSP-5 licenses to him.  Occassionally, he drives down from Canada and picks these goods up with the licenses and all required paperwork.  DDTC has now told us that this is a violation, but I'm having difficulty locating what the actual violation is.  Can you point me in the right direction here so I can reference things correctly in my VD?

It is a violation to use a forwarder on your license.  It is not clear if it is a violation to not use a freight forwarder on your license.  In your case, you did not use a freight forwarder.  The Canadian customer is acting like a shipping company/carrier in this case.  Arguably, that fact should have been disclosed in your application.

If your license application said that the Canadian party may pick up the items in the US, it is clearly not a violation.  In is not 100% clear that what happened is a violation. 

You could do a voluntary disclosure saying you do not think you did anything prohibited by the license but the Response Team told you that you have a violation.  You might say that you do not think it is a violation or that you are not sure but that out of an abundance of caution you are disclosing.

In the future, just mention in your license application that the Canadian customer may pick up the items and transport them to Canada, effectively acting as the carrier.


Can a company that is ITAR registered show its ITAR registration number to customers when they ask if we are ITAR registered?

The ITAR does not prohibit you from showing your ITAR registration number or letter to other parties.


A person of Mexican origin (born in Mexico) is employed by a European company subject to items under ITAR regulation. What is the procedure when the person keeps his nationality and holds a permanent residence permit of that European country? The same case if the person obtains the passport of that European country.

Typically DDTC would consider that person to be Mexican, plus whatever European citizenship/passport the person has.


I work for a company that operates US registered aircraft both in and outside of the US used as aerial platforms for third party mapping / survey companies with systems that are classed as controlled / ITAR goods.  My question is if the system is temporarily installed & operated outside of the US, making it part of a US registered aircraft, are there any ITAR requirements for our company (our pilot in command would therefore be "in possession" even though there is the third party's representative on board)?  The systems would have proper export documents from the countries of manufacture specifying the host country of installation & operation.

If you send ITAR systems out of the USA you have an export that requires authorization.  The exact requirements and authorization required depend on many variables which you did not mention.  Export documentation from other countries normally has no bearing on ITAR requirements but it is important to comply with the rules of other countries.


What does a foreign national need to visit an ITAR controlled building other than his passport. The visitor is from France. He will be in an area that will not have ITAR articles.

Being in the building is not the issue. Having access to and being exposed to ITAR technical data is the issue and requires a license, agreement or exemption.


I have an active DSP-73 license that is valid until Feb 2016. My question is must I stop temporarily exporting items identified on the license when I realize there is a risk of them not being returned until after the license expiration date?

You should not export something using a DSP-73, if you see a risk that the item will not be returned within the validity period. Use a DSP-5 instead.


My company is trying to provide a quote for a company who does work with the U.S. government. We found out that the end user of the part is out of the U.S. We are an ITAR-registered company, so can we still provide a quote knowing the end user is not within the U.S.? The customer does have an export license in place.

You do not need ITAR approval to send a quote.  You need approval to export technical data or to send a proposal to an ITAR 126.1 recipient.


Many of our products transitioned from ITAR to EAR 600 Series. When submitting a DOC export license, do I need to include all the sub-licensees from our former TAA on the DOC license?  I have been getting different answers to this question and cannot find an official ruling on this from DOC.

Yes. If you want 600 series items to go to any foreign party or foreign national, you or the foreign party making the reexport or transfer must get that approved unless NLR or a license exception is available. 

It usually is most efficient to get all parties approved on the U.S. export license, but it is acceptable for the foreign party making the reexport or transfer to apply for a reexport license.


If an ITAR part will be shipped within an EAR specially designed shipping container which is considered support equipment, does the entire shipment become ITAR controlled? If so, would the container need to be listed on the Schedule B of the DSP-73?

An EAR controlled container does not have to be listed on a DSP-73.


I am an Italian citizen temporarily in the U.S. for the military. Am I allowed to buy ITAR regulated items such as ammunition magazines or rifle optics and bring them in my checked luggage in Italy for private use?

See ITAR 123.17 for some export license exemptions that authorize specified exports without a license and that may be applicable.  If you are not a U.S. person, there are certain limitations that may prohibit you from exporting without a license.


Can a foreign national be on the manufacturing floor when an ITAR controlled product is being produced?

The ITAR prohibits a foreign person from receiving technical data.  If the foreign person is in a location on the plant floor where he receives, visually or otherwise, an export license is required.  If the person is in a location where he will not receive tech data, there is no export.


I am a U.S. citizen working for a Canadian owned company in Canada.  If I travel to the U.S. to meet with potential defense customers, am I considered a foreign national under the ITAR regulations?

The ITAR definition of foreign person includes companies incorporated outside of the United States. When you are representing your employer who is incorporated outside the U.S., it would be prudent to treat you as a foreign person.


When marking documentation with an "EAR" statement, is it required to state that it is an "EAR99" statement? We have a customer that is demanding that we add "EAR 99" to our EAR export control statement and I am unable to locate any documentation (DFARS, etc.) that states that "EAR99" MUST be included in the export control statement verbiage.

The EAR does not require that you put EAR99 on your documents that you send to the customer, except in a case where you use an ITAR export license/agreement to export EAR controlled items.


We have a TAA in place with a U.S. company. One of our personnel wishes to travel to the U.S. to the company who raised the license for a meeting, taking with him some technical data for the project for discussion. I assume that as we have a license and being that this is going back to the U.S. this will be allowed? Is my thinking correct?

The ITAR does not regulate imports of technical data into the USA.  The ITAR does regulation the export from the United States of U.S. and non-U.S. technical data that is controlled on the U.S. Munitions List when it is in the USA.


I am an independent contractor, and have been asked to procure foreign military aircraft for a second foreign government, acting as a broker. Are there any U.S. compliance issues, other than income tax, that must be considered?

Yes, in our area of expertise, the issue is whether you have issues under the ITAR brokering rules in the International Traffic in Arms Regulations.


Do non-US contractors who do work in an ITAR controlled area, but not on ITAR data, such as general maintenance of equipment, need ITAR clearence? If not, is there something else that covers them?

The release of ITAR technical data in visual, oral, electronic or paper form to the contractors requires ITAR authorization.  So, if a contractor comes in to fix a machine and you make sure they do not receive ITAR technical data through any means, you do not have to get ITAR authorization.  To ensure compliance, you should analyze what the contractors will see, hear, access and receive before they arrive, so you know if you need to take measures to prevent them from getting ITAR data.  In some cases, companies will simply use tarps or screens to shield the contractor from receiving ITAR data.


Good morning. I attended your seminar back in June. I am currently studying ITAR regulation and need additional clarification on paragraph (x) under Category XIX, where it says: Commodities, software, and technical data subject to the EAR used in or with defense articles controlled in this category. If I have an order for shafts, rear compressor forging for T700 engines and the T700 engines can be used in both military aircraft and commercial aircraft. According to 120.41(b)(3), T700 engines would be released from the ITAR to the EAR licensing authority. However, paragraph (x) under Category XIX seems to catch the parts back into ITAR authority. Please kindly clarify if this part would fall under ITAR Category XIX(x), and thus if we need to apply for a license under the ITAR. Please kindly advise on how I should interpret paragraph (x).

Thanks for attending the training.  Paragraph (x) in XIX is there to facilitate license applications.  Paragraph (x) does not actually control anything.

For example, you have an order from a foreign customer to export an engine in XIX (a) and some EAR controlled parts.  Instead of getting an ITAR license for the XIX(a) engine and an EAR license for the EAR controlled parts, you can put the EAR controlled parts on your ITAR application. For the engine line item in your application, you would put XIX(a) as the USML category and paragraph. When you apply for an ITAR license for items the ITAR does not control, the USML Category and paragraph you put on your license application is XIX(x) for engine parts.

Other newly reformed USML categories have (x) paragraphs that serve the same purpose--for example, VIII(x) is the designation you use when you have an order that includes EAR-controlled aircraft parts and USML Category VIII items.

I hope that helps. 


What is the rule for selling an ITAR restricted item to a major airline that's based in Germany but has a repair facility in the USA and is doing the repair at that US location?

The ITAR does not control transfers of ITAR items to foreign owned entities that are located in and incorporated in the United States unless you know or suspect the entity will illegally export the items.


What do I need to have done for an employee who is not a US Citizen that handles material that is shipped to our customer who is ITAR regulated?

Your issue is the foreign person employee may not receive ITAR technical data.  I am not sure what you mean by "handles material," but, for example, if the foreign person holds a box with ITAR items closed inside the box, that is not an ITAR issue.  Not all items that go to an "ITAR regulated" US company are ITAR controlled.  In any event, you need to prevent access to ITAR technical data and train the foreign person and all other involved persons on ITAR issues.


I work for a Motion Control Distributor. We were required by one of our customers to be ITAR compliant, however I am questioning whether or not we truly need to be considering selling this company a component for their machine. Also what are the requirements for having a non-us citizen employed here if we have to be ITAR compliant?

Part 122 of the ITAR requires that all US manufacturers of defense articles be registered with the DDTC in the State Department.  The ITAR definition of export includes the release of ITAR controlled technical data to foreign persons (for example, a foreign national employee with a work visa). You must have prior authorization before giving ITAR technical data to foreign persons.


Our company manufactures various components and tests equipment for a defense company that builds armored ground vehicles for various countries. None of the parts we make have munitions, although some components in the assemblies we make have ITAR controlled parts. We have our controlled goods license as well as our ITAR license, and I was wondering if it is necessary to have a DSP-5? If so, is one required for each end use country?

The US State Dept. issues ITAR registrant codes only to US exporters/brokers and non-US brokers.  I assume you are saying your US parent or subsidiary has the ITAR registrant code or that your Canadian company is registered as an ITAR broker.  The ITAR registrant code does not give anybody any authorization to export, reexport, or retransfer ITAR items.  

The DSP-5 authorizes exports from the United States to other countries such as Canada.  The DSP-5 for the US export will identify the end-use and end-user so it would be possible for a US company to have a DSP-5 that authorizes a part to go from the United States to Canada for incorporation into a Canadian-made item that will be sold to the Government of Canada or to another country.  The first question you should ask is what authorization the US exporter used to export the ITAR items to you in Canada.  Once you know that, you should determine if the export authorization also authorized you to do what you want to do with the ITAR items.  If the US export authorization does not authorize what you want to do and you have the items already in Canada, you should send a General Correspondence ("GC") license application to the US State Department per 123.9 of the ITAR.


I am a US citizen and a retired satellite engineer, both commercial and defense.  I am considering employment at a foreign aerospace company in Turkey.  What are my obligations and risks relative to the controlled US technology that I know?  Am I permitted to apply myself in the Turkish space industry?

Your skills and expertise are not a problem.  The potential problems would be if you were to transfer to a foreign person/entity proprietary ITAR or EAR technical data/technology that was developed in the United States or that was developed using ITAR or EAR controlled technical data/technology. 

The last time I heard, the DDTC does not think that a foreign person employing a US person automatically means the US person is providing an ITAR defense service.  I have not checked with anybody in the DDTC lately on that point.


Is there an issue presenting the Customer and Program names together to a foreign individual?

Neither the EAR nor the ITAR prohibit you from doing so.


Would an EAR 99 transformer be considered an ITAR component? And as far as procuring materials for EAR 99 and ITAR, what are the requirements?

If it actually is accurately classified as EAR99, that itself means it's not ITAR controlled. 

Your second question is very open ended--it is like asking "I am in the US, how much tax do I pay?"  All we can say is you must comply with the ITAR and the EAR. 


I have an item here in the UK that was received as a 9A991.d classification. Since ECR, the classification of that item has changed to 9A610.y.1 (can you guess what it is yet!?). I now need to return the item to the US. Can you advise whether I need a US export authorization to send/return the EAR good to the US?

The EAR generally does not require prior written reexport authorization in your case.


Do ITAR regulations apply to material received from a foreign company with a general ECCN classification designation ("1C007")? We do not know the origins of the material, nor the end use application of the material. We provide engineering services on the material, then return it to the foreign company.

The US export controls applicable in your situation depend on the services you provide and the classification of what you export, in addition to the country, end-user, parties involved and end use activities.  Your question does not provide sufficient details to provide a precise answer.  Typically, something classified as 1C007 at the time of export is controlled by the EAR not the ITAR, but that could change depending on all of the facts of your situation.


Can an ITAR aircraft be worked on in a foreign location by US mechanics?

If you provide assistance to a foreign person involving the repair or maintenance of a defense article, you are providing a defense service for which the ITAR requires prior approval.


I own a small Law Enforcement and Military training company.  I have been requested to provide training to personnel of a private company in a foreign country (Colombia) on subjects of Personal Defense and Kidnapping Awareness. Where do I research if I need any special permissions or licensing to fulfill this request?

It depends on the content of your training.  If you provide training related to the use, repair, maintenance, etc. of any item on the US Munitions List to a foreign person, you are providing an ITAR defense service and must obtain prior approval.


I am developing an encryption device that falls under the EAR commerce control list. I am not going to export the device. What I am concerned about is deemed exports. Are there restrictions on who I can ship it to in the US?  Does special care need to be taken in the manufacturing process?  What about special handling by the shippers?  

The EAR controls those activities that do not involve something leaving the United States: 

1) Release of EAR-controlled technical data/technology to foreign nationals in the United States.

2) Release of EAR-controlled source code to foreign nationals in the United States. 

3) Participation in any activity if you know or suspect a violation of the EAR has occurred or is about to occur.

The EAR also controls the export of EAR-controlled items from the United States.


Please advise if there is a time limit / obligation under the ITAR to report a potential violation involving a product received from the US under a DSP-5, but that had not fully detailed  foreign consignees and foreign interermediate consignees. The product in question was received in the UK during 1999. Our company submitted a detailed GC to the DDTC involving DSP-5s back to 2003, which was as far back as they could go with system information available, and shared the GC with our customer, but now the customer is requesting further info back to 1999. What are our obligations under the ITAR in this type of situation?

If the violation involves the UK and does not involve any country in ITAR 126.1, the ITAR does not require that you disclose.  Your disclosure would be a voluntary disclosure.  If you are going to do a voluntary disclosure, you should do it as soon as possible after you discover the violation.  If you are going to disclose, you normally want to do the disclosure yourself, because if another party, such as your supplier or customer, does the disclosure, then you do not get credit for doing a voluntary disclosure.

Generally speaking, there is a five year statute of limitations for ITAR violations, so if the incidents happened in 1999 or 2003, they are well outside of the statute of limitations, and technically, you may not be penalized, but it will always be something that could impact the DDTC's mood if it ever were to consider what to do about violations that happened inside the limits of the statute of limitations.


I am a surplus parts dealer based in CA. I have a previously Govt owned non-ITAR support assy that a UK based company is asking for a quote. I have no desire for an export license. Am I allowed to ship non-ITAR parts to UK or other EU countries? I've always replied No Quote, but the volume is increasing.

You may not export it if it requires an ITAR export license or an export license under any other regulations, such as the EAR, for example.


I am a UK Citizen and an independent Aerospace Special Process Auditor. Can I carry out Process Audits on US Aerospace products manufactured in the UK, on behalf of a US Organization, by ITAR restricted UK Companies?

You may not have oral, visual, written, electronic or other access to US technical data that requires an export license for the UK.


Our company has been asked to quote testing services of military vehicle driveline components by a Canadian defense contractor. The items we would be testing are not specific to military vehicles and there is not an USML code covering testing services. However, because these parts are being evaluated for installation on military vehicles, we are told we must be ITAR registered. Is this in fact the case, and if so, what is the best way to go about the registration?

You must register before you may export defense articles or defense services, or if you manufacture defense articles in the United States. It is not clear from your question what the export classification (USML vs CCL) of your items and the items you will be servicing are, so we cannot provide further guidance.


Is it necessary to obtain different TAAs for separate U.S. government programs when the defense technology is the same and the foreign parties are the same? It seems that one general TAA could authorize the data exchange between the U.S. company and the foreign parties, regardless of the U.S. customer.

It is not necessary to obtain two separate TAAs.  If you can clearly identify the scope of all activities for both programs, you may apply for one TAA.  Of course, the DDTC always reserves the right to tell you to do something a different way, but I would try a single TAA if that is what you prefer.


I am a US citizen. My company is foreign-owned. For ITAR purposes, am I a foreign individual?

If your company is incorporated in the United States, both you and your company are US persons.


My company has EAR controlled technology/items. Can I allow foreign national visitors on the floor when the product is being manufactured and tested?

The key issue is a foreign national may not obtain technical data that requires a license.  For example, if the foreign national sees documents or observes processes or activities that reveal information that requires a license, you must first obtain a license.


We're establishing an Export Compliance and Due Diligence program, and there have been conflicting thoughts on whether the checking questions (what country, end use, etc...) should take place at the quotation stage or only required if an order is placed. Can anyone offer any feedback on their own experience?

Compliance procedures are not required, they are just optional good practices, so I cannot say when they are required. 

If you are going to review activities for export compliance issues, you should conduct the review before any activities commence.  In addition, the sooner you find a potential export compliance issue, the sooner you can stop everything and investigate so you do not waste your time and commit a violation.  For example, if you receive a RFQ with boycott language prohibited by Part 760 of the EAR, the EAR requires that you take certain actions.  If your quote includes technical data you could have issues. If you provide a quote to, or involving, a party on a prohibited parties list, you could have issues.  If you provide a quote to an embargoed country or to a prohibited nuclear, missile, chemical/biological weapons activity, you could have issues.

In any event, I believe it is prudent to conduct your initial export compliance review at the point of your initial contact in order to avoid inadvertent violations and to avoid wasting your time on a problem transaction.  As you learn additional facts or the transaction/activity changes, you will need to conduct further reviews.


Can you please develop the definition of the following terms: transfer and re-transfer? Can these terms be treated as synonyms to export and re-export terms. Is the meaning the same? Thank you in advance.

In the ITAR context, the ITAR definition of retransfer is:

 

 

§120.19   Reexport or retransfer.

Reexport or retransfer means the transfer of defense articles or defense services to an end-use, end-user, or destination not previously authorized by license, written approval, or exemption pursuant to this subchapter.

There is no definition of transfer, but if you are referring to an activity outside the United States, it would be pretty much the same as retransfer.


If a company is a wholly-owned US Subsidary of a foreign company, can you send them ITAR controlled information?

A company that is in Kansas and is incorporated in the United States is not a foreign entity, regardless of whether it is 100% owned by a foreign company.  Sending ITAR technical data to that US person company in the United States is not an export as defined in the ITAR. 

If you have ITAR technical data and you give it to a individual who is a foreign person (e.g., a person without US citizenship and without US permanent resident alien status) who is in the United States, that is an export.  So, if you give ITAR data to one of your employees who is a foreign person or to a foreign person employee of a Kansas company, that is an ITAR export.

I recommend you transfer your technical data to a US person employee of the Kansas company.  I also recommend you enter into a company to company agreement with the company in Kansas in which that company agrees to comply with the ITAR for the defense articles it receives from you, including having an export license for any your technical data that it will give to its foreign person employees.  You may also ask that the Kansas company tell you who its foreign person employees are so you do not unknowingly transfer ITAR tech data to them without proper authorization.


My company is working with a supplier who has provided us with the following crypto ECCNs for components within their goods (5A992 & 5A002A). We wish to send these goods to Spain. After looking through the CCL list, I believe they are not controlled (only controlled by AT which is not checked for Spain), but we still have some issues surrounding the fact that they are Crypto, and under the Wassenaar Arrangement, there seems to be conditions upon this. What would you do to retransfer these products?

5A992 is eligible for No License Required to Spain but 5A002 is not eligible for NLR to Spain.  I suggest you ask the supplier if it is eligible for License Exception ENC to Spain.  The authorization (e.g., ENC) the supplier used to send it to you in the UK is probably the same authorization you will use to send it to Spain.


Can a US manufacturer of aircraft products (electro-mechanical, hydraulic motors, etc) sell the products to a European military defense company for resale or use on Russian military aircraft?

Many details are required to answer your question. 

You must comply with the International Traffic in Arms Regulations and Export Administration Regulations.  If you do not understand those regulations, participating in the activities you described could be risky.  The fact that you did not provide details might mean you do not understand the regulations well enough to know that nobody could answer your question accurately.


I am a distributor of veterinary equipment. I am selling a diagnostic hand held machine to a University in the U.S. The University is requiring that I fill out an ECC form, even if they don't export, because of the foreign nationals they employ. What happens if I don't fill out the document?

There is no legal requirement that you fill out the form.  The law does not require that you tell them the ECCN. I guess you might lose the business if you do not do what they ask.


When conducting screenings, are you allowed to ask for personal information, such as there home address?

US export control regulations do not prohibit that, but other laws might.


I have a question regarding Dual & Third-Country Nationals. The definitions (FRN7428) for DNs and TCNs both begin with 'An individual who holds nationality...' I understand (for example) that Chinese citizens seeking nationality from a new country of residence must renounce their Chinese nationality, so no longer 'hold nationality' from China. How does this sit with the Option 2 (DDTC Vetting) process, which 'considers country of birth', but when the individual is no longer considered a DN by his former or new country (so will not be declared), but could still have active links and a risk of diversion?

DDTC of course will not answer that question directly and officially.  Past Chinese citizenship increases the risks and is a red flag, but that does not altogether eliminate the person from eligibility.  Since DDTC has continuously refused to amend the ITAR to tell you how to determine a person's nationalities we are forced to rely upon statements such as  country of birth may be a factor.  If you already have that information about a person for which you want to use DDTC vetting, you should disclose that information to DDTC along with all other pertinent information when you request DDTC vetting.


We manufacture a consumer physical fitness product in the USA that contains an off-the-shelf integrated circuit with an ECCN of 3A991a2, which controls the product. If exported as a finished good, would the ECCN of the IC be reported on the export declaration?

If you are exporting the finished product, you use the classification of the finished product and not the classifications of the individual parts in the product.


Regarding material shipped through the Defense Courier Service to an Army Post Office overseas, I understand some countries require documentation from the DOS. Is our facility required to have export licenses in place prior to shipping to any foreign country through DCS?

In past official, written rulings, DDTC has determined that delivery to an APO or FPO is an export the same as delivery to a US military base overseas is an export.  That means you must comply with the export licensing requirements in the ITAR for such deliveries to APO or FPO.


We are purchasing a Satellite from a US based company and have a TAA in place and get technical data delivered. My question is whether our engineers who may travel to the US to attend meetings are permitted to hand carry the ITAR documentation to the US for use in the meetings. In addition, on the TAA, a Spanish company is named and we are permitted exchanges with them under the TAA. Can the engineers hand carry ITAR delivered items to Spain for use at the Spanish company for purposes covered under the TAA? Common sense would seem to say in both cases we are taking documents out of Australia for use on work covers under the TAA.

We cannot answer that question without reading your TAA and the DDTC approval letter. A TAA always authorizes whatever it says it authorizes, minus any provisos and limitations in the DDTC approval letter.  Nothing more and nothing less.

If your TAA says that you will send ITAR data to the United States and to the entity in Spain, you may do so as long as your TAA did not attempt to limit the forms in which you may send the data.  If the TAA and DDTC approval letter do not limit the forms, you may send the data electronically, by hand carry, or by any other means.  I suggest you give your travelers a copy of the TAA to carry with them in case US Customs officials ask questions.

There is a question, however, as to whether the TAA authorizes your company to export ITAR data from the United States after it is hand carried into the United States  Check the TAA.  If the TAA does not authorize your company to export ITAR from the United States, you may have to ask the US TAA holder to export the data back to you after your people carry it into the United States. 

Ultimately, because of security and practical concerns, I would prefer that my travelers not hand carry ITAR data even if it legal to do so.


I work for a company that supports Government contracts. We mark all of our drawings ITAR (WHEN APPLICABLE). We also put a note on our RFQ;s and P.O's stating the ITAR procedure and regulations (quite lengthy). Do we, as a company, have to go to ITAR Registered Suppliers for our Products? Or is this just a method for the government to keep track of who is building miltary products?

First, it may be the case that many of the items you purchase are not ITAR controlled; you did not say.  We will just address ITAR controlled items you purchase.

If you purchase ITAR controlled products from US suppliers, the ITAR requires that the suppliers register with DDTC if they manufacture or export defense articles or services.  A supplier who only resells in the United States does not have to register. 

The ITAR does not say you have to ensure that all of your suppliers are registered, but DDTC wants you to do that, probably because they want you to pressure unregistered parties to register.  How you address this issue is up to you.  Many companies include in their purchase orders or contracts a clause in which the supplier agrees to comply with the ITAR.  If  somebody tells you they are complying with the ITAR, you may believe them unless there is a red flag that makes you think they are not.  Other companies go further and require that suppliers give them an affirmative statement along the lines of "We are registered with DDTC per ITAR Part 122."  You should evaluate your compliance resources you have to spend and determine what is the most prudent use of your limited resources based on the risks you face.


Thank you so much for your presentation on the Tech data.  Our staff found it extremely useful. I do have a question on Tech data for EAR99 classified hardware.  What do you use for the classification code?  Is it also EAR99?

Thanks for taking the tech data training.

Unfortunately, there is not necessarily a one to one correlation between the classification  for a piece of hardware and the classification for the technical data related to that hardware. 

For example, one of clients makes an automobile part that is EAR99.  The drawing for that automobile part is also EAR99.  If superplastic forming is used to make the automobile part (which is true for certain parts), the superplastic forming technical data for that automobile is 2E003 which requires an export license for most countries.

So, you should not take the short cut of saying the hardware is EAR99 therefore the technical data is X.  It is true that frequently EAR99 is the classification for tech data related to EAR99 hardware, but it is not always true.  That means, ultimately, you determine the classification for tech data the same way you determine the classification for hardware.  You compare the data or hardware to the entire CCL.

As a practical matter, you, or a technical expert, could sit down and review the CCL and extract from the CCL the 5, 10, 20, or however many ECCNs that could possibly apply to your tech data and when you classify your data you do not read every ECCN in the CCL, you just compare your data to the predetermined subset of ECCNs that could possibly apply to your data.


If an ITAR part will be implemented into civil/commercial item (aircraft engine) does the whole engine become ITAR controlled?

There have been cases in the past when DDTC has said that putting an ITAR controlled component into a non-ITAR item creates ITAR issues.  One example is the QRS-11 case, in which DDTC sent Boeing a multi-million dollar charging letter.

For that reason, you may wish to avoid doing what you described.  Alternatively, you may wish to send a Commodity Jurisdiction (CJ) determination request to DDTC to get a ruling on the non-ITAR with your ITAR content.


Our parts are moving over to the EAR from the USML as EAR99, because of the changes to the "specially designed" definition. They were Category VIII(h). We are also producing parts that are currently Category XI(c). Does this change affect those parts also? Wouldn't they all become EAR99? They are produced the same as parts available commercially and also currently in production.

Category XI does not use the term "specially designed" and has not yet been changed as part of export control reform.  So it is unlikely that anything currently classified as XI(c) is changing jurisdiction.


My U.S. company needs to ship some coating materials that were developed under a DoD SBIR program to Canada for testing. The SBIR contract has an ITAR clause, however, I cannot find a specific category on the USML that contains "coatings" that are Icephobic (developed for aircraft). Can I then move to the CCL categories, or could this material fall under category XXI of the USML? I am thinking I only need a DSP-73 to temporarily export the coatings for testing and then have them returned to su.

Only DDTC may designate something as Category XXI.  If you are certain the material is not in any other USML Category then the material falls under EAR and CCL jurisdiction.  Most things under EAR jurisdiction are eligible for export as No License Required to Canada.  (We cannot determine your export classification without all of details of the performance and nature of the material.)


Do you normally need a license for the sale of an EAR restricted item to a foreign person within the U.S. if there is no technical data or information included in the sale?

If there is no technical data or source code involved, you do not require EAR authorization unless you know or suspect a violation has occurred or is about to occur.


As a defense contractor, we ship government property (ITAR items) to U.S. entities and USN ships overseas. I understand we would use the DSP-73 to temporarily export of items, but is there a way to file for one license to cover all of the shipping we will be doing over the life of this contract? Or do we need to apply for a DSP-73 each time we go to ship? Additionally, we weren't sure on the level of item description that is needed, i.e. "Ship Self Defense System components" or "harddrives", "racks", etc.

You may request a DSP-73 for multiple shipments.  Without knowing the technical and performance details of your items and your licensing history, it is difficult to say how detailed you have to be.  Generally speaking, you need to use a description so the DDTC understands what you want to export and so that CBP can identify the items you export as being covered by the license.


I work for a U.S.-based company and we do all EAR99 products. Some of the executives of my company also have ownership and hold executive positions in a Chinese company (not a subsidiary of the U.S. company) that works as a partner with the U.S. company. The engineers in the Chinese company have been trained by the U.S. team in product design and manufacturing. However, the knowledge for designing and producing such products can be found in public domain. The Chinese company has its own local R&D and production team, and it has been developing and producing standard and custom products for the U.S. company’s customers as well as for its local customers, including Chinese military customers. From the information I can find, it appears no problem for a U.S. citizen to be employed by a foreign company which serves the foreign military market. Is it a concern for a U.S. citizen to have significant ownership and hold a top management role in a Chinese company that serves Chinese military market?

There usually would not be a problem, however, your question is very open-ended and there is no short-cut approach to addressing potential based on a limited understanding of the situation I got from your message.  For example, there could be EAR issues depending on the types of military items being produced and there could be OFAC issues depending on the parties and countries they deal with.


Do the EAR or ITAR regulations say explicitily or implicitily that the classification of a U.S. item/software/ technology can be done only by a U.S. person (U.S. BAER)? For example, if a non-U.S. site works on U.S. technology and knows the U.S. classification, can he assign it without asking the U.S?

The regulations do not require that only U.S. persons do classifications.  Your citizenship and nationality never preclude you from doing classifications.


We purchase and operate helicopters which have some ITAR controlled components. If we remove any of these components and return them to the helicopter manufacturer for repair, what are our obligations under ITAR?

Most of the requirements would fall on the U.S. importer who must bring them into the United States and then send them back to the U.K. in compliance with ITAR requirements.  To help the U.S. company do this legally, you should notify the U.S. company before you return the items for repair and ask the company to tell you want to do so the temporary import into the U.S. complies with the ITAR.


When purchasing raw material metals for an ITAR controlled part, does this material origin have to be from a domestic source? Are there any type of sourcing restrictions on the raw material origin?

The ITAR does not impose restrictions or requirements on the origin of the materials.  If you export ITAR controlled tech data to procure an ITAR controlled material, that would require ITAR authorization.


We are a foreign-owned company currently utilizing 126.18 exemption for our TCN's. We are party to a TAA with multiple foreign parties which do not utilize 126.18. If a proviso is added that restricts a nationality, does that apply to ALL parties or just the parties not utilizing 126.18 exemption?

It is impossible to know for sure without seeing all of the provisos, but generally that restriction applies to parties not using the 126.18 exemption, unless the provisos explicitly states otherwise.


Please clarify if selling an EAR controlled item domestically to a foreign national is considered an export under the EAR.

The release of technical data to a foreign national in the United States is an EAR export of that tech data.  Giving a piece of hardware to a foreign national in the United States is not an EAR export of hardware unless in giving the hardware you also give technical data.


A client is planning to have a Canadian company upgrade the company IT system. In that system, there is ITAR related technical data, which the Canadian company will not use (there will be a NDA) or disclose, but will have access to. My advice has been that they do not need an export license, but they will need a TAA due to the consequential access to technical data. Am I correct? Does the company need a TAA?

If the technical data qualifies for the Canadian exemption, it may be that neither a TAA nor an export license is required.

If not, a TAA would be required if the U.S. company will provide defense services to the Canadian company.  I would guess that in this case there are no defense services involved so an export license would be required if the exemption is not applicable.


A company manufactures ITAR controlled items (under a DSP5 license) for a customer in France. This item consist of several lower assembled modules. Can an employee from the U.S. company hand carry one of these modules to the foreign company's facility for replacement of a failed module from a previous shipment?

It depends on the export jurisdiction and classification of the items being carried.  Both the ITAR and EAR impose the same requirements on hand carries as on exports by other means.  Assuming the modules are ITAR controlled, the fact that an item is being hand carried just means that the traveler may have to go out of his way to clear the export with CBP.


Can you tell me if DSP 61 and 62 are exempt to paying HMF (harbor maintenance fees) in U.S. ports?

The 61 and 62 are not determining factors for the payment of harbor maintenance fees.  They exist under completely separate regulations.


My company laptop has VPN software that is classified as ECCN 5D002 c.1. I'd like to hand carry it to another country for a business trip, and will only be using the laptop for personal/business use. I won't be providing that software to any foreign persons- it's just on the computer & won't be shared. The software supplier tells me I can use the ENC Exception (in particular EAR 740.17(A) and (B)(3)) to export it and bring it back. Is that true and do I need to do any of the reports, registrations or waiting period when only a U.S. employee will be using it? May I use the TMP exception to capture the software since it's pre-loaded on the computer?

License Exception TMP likely would be easier to use and administer in this situation.


I'm a Canadian-Egyptian working for a U.S. company. I was offered an IT position in Saudi Arabia under the sponsorship of the U.S. company. My IT job doesn't require or authorize me to access any ITAR controlled objects (Hardware- TechData, etc.). Is there a need for my company to apply for getting a DSP-5 license?

Your U.S. employer needs a DSP-5 if your U.S. employer will "export" ITAR-controlled technical data to you.