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Export Compliance: Ask The Experts

 

 

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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.