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Export Compliance: Ask The Experts



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We currently have a TAA in place until 2023. Can we use exemption 123.4(a)1)) for repair and overhaul of items previously exported under a DSP5? There will be no enhancements or replacement, just repairs.

Unless your TAA says you may not use the exemption, you may use the temporary import exemption but make sure you comply with all of the requirements of the exemption.

We design items that are categorized under 9A515. Our designs include everything from mechanical piece parts to electrical and electronic designs. We often subcontract out piece parts for fabrication (machining, plating, printed circuit board fabrication and assembly, etc). We use multiple vendors, so the manufacturing of piece parts never comes close to providing the design as a whole to any single vendor, and the manufacturing processes include nothing exotic or export controlled. The manufacturing also includes the full life cycle from prototypes to spaceflight. Our items are no longer on the USML. Do we need to mark our drawings as being under export control IF they are being manufactured in the US (but we don't control whether they employ only US persons)?

The EAR does not require that you mark you EAR controlled technical data/technology. It is a prudent practice to make EAR controlled tech data with its ECCN such as 9E515 in your case in order to help prevent inadvertent violations by other US parties. In the event another US party commits a violation with the data you gave it, it is nice to be able to show the government that you marked the documents even though you did not have to.

What is the best practice for exporting technical data under a license? ITAR 125 does not explain the process. ITAR 123 for hardware speaks to tech data export but says to electronically provide export information using the "system for direct electronic reporting to DDTC" (which I understand does not exist?). We send a letter of initial transfer to DDTC to satisfy. But it also says to return the license to the State when done. Does this mean a scanned copy of the electronic license should be initialed and downloaded back to the license on the DDTC database at the end of the term?

I believe you are on the right track. First notify DDTC of your initial export by uploading a letter into DTrade and then upload the decrement end license to DTrade when it is exhausted or expired.

We intend to export XI(d) technical data loaded onto a COTS computer (classified as 4A994). Should the computer be classified as 3A611.x because it has been modified by the ITAR-controlled data?

If the technical data is merely loaded onto a standard computer that has not otherwise been modified,  the computer does not become 3A611.x. The computer retains its original EAR99, 4A994 or 4A003 classification. The ITAR technical data retains its XI(d) classification.

Are there any specific instructions on scrapping ITAR controlled items in the ITAR regulations? Like, "must not be recognizable as the original item?" In our case, our scrap company is in New Hampshire; they grind it up and sell as scrap. I was wondering if there was an ITAR reference that could be incorporated into procedures.

There are no ITAR issues if there are no exports. The ITAR does not address your issue directly.  
The ITAR does not control something that is not on the USML. So, I assume you are looking at what needs to be done so an item on the USML becomes something that is no longer an item on the USML. First, I will say it depends on the item. While I do not know the exact details of the grinding process, many USML items (examples, pump, printed circuit board, electronic component, radio, rifle, night vision goggles) that are ground up into tiny pieces cease to be USML items. On the other hand, if a certain powder or propellant is USML controlled based on its chemical nature/performance/properties, then I do not think grinding it up would cause it to cease to be a USML item.

I want to establish a transit stock in Germany for my potential customers. I will export software and IT accessories and keep it on my transit stock, until it's delivered to the end customer in former soviet countries. From an export compliance perspective, I do not know my end user when exporting to Germany and just making stock building. No BIS authorization is required when the "ship to" is Germany. But do I still need to report CCL items when they go to other countries from Germany?

Generally speaking, the same US requirements apply to shipping a US item from Germany to X as would apply when shipping the same item from the US to the same X.  So, for example, if I need an export license to export my item from the US to the Crimea region in Ukraine, I need a reexport license to send the same item from Germany to the Crimea region of Ukraine.

I am the owner of a small, contract machine shop located in the US. All my employees are US citizens. We build to customer drawings, many of which fall under ITAR restrictions. My customer assembles my components, along with others we do not supply, into complicated hydraulic valves and then sells them to a “Prime” defense contractor. A local businessman, who is a US citizen, approached me and offered to buy my business. He is a minority shareholder in a local corporation, the majority shareholder is a resident of India, and is not a US citizen. The non-US citizen would not have any responsibilities at the shop, he is basically an investor. My company is not currently ITAR registered. What steps would I have to take to sell my business and ensure ITAR compliance?

If you build ITAR controlled items to customer's ITAR documents and specs, you must register with DDTC per ITAR Part 122. Once registered, ITAR 122 requires that you notify DDTC prior to selling your business to a foreign person.