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Frequently Asked US Export Controls Questions

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View past FAQ's in our 2010 Archive    2011 Archive    2012 Archive

If an ITAR part will be implemented into civil/commercial item (aircraft engine) does the whole engine became 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.

We are a distributor of electronic components, we have 80% EAR99 parts and the rest are military parts. I would like to know if for the ITAR annual report we need to report all brokering activities for all of our customers (military and non-military)? Are only transactions performed with military/aerospace customers or only transactions for military end use required for reporting purposes?

You have to report all brokering activities involving items on the US Munitions List.

A NATO country manufacturer wants to ship a scrap NATO military turbine engine part (cold section) to our company in the States for us to apply a protective coating to it. We intend to apply the coating and ship it back for them to test and evaluate its properties. Is a DSP-5 license sufficient for this purpose or do we also need to get a TAA? We do not intend to tell them anything about how we applied the coating.

Your activity appears to be a "defense service."  Check to see if you qualify for the 123.4 exemption.  If not, then you will need a DSP-5 and a TAA.

To what encryption level does email need to conform to be ITAR compliant?

The ITAR does not require encryption of email. 

Even though you do not have to encrypt email, it may be prudent for you to encrypt email.  An industry standard encryption would be reasonable.

We are suppliers of custom machined components.  Potential customers and current customers from all different industries will send us their drawings for us to quote.  We do not manufacture anything in house.  We have domestic and foreign companies that we work with that will produce the products.  We do not forward customer drawings to them.  We take the customer drawings and cut and paste part dimensions and information onto our own template.  This template/drawing is what we would then send forward to our partners to quote.

We have an export compliance system in place.  As soon as a request is received- we show our due diligence and inquire with the potential customer-- is this part ITAR controlled, government regulated or EAR-99?  We find that many companies are not aware of what these requirements are and/or what they mean.

An example of what we may receive: a print for a simple pin which contains no notations with regards to ITAR etc. However, when we inquire about the end use it may be used in a sensor for a military component.  

Even if you do not know that your drawing requires a license, if it does and you do not get a license, it is your violation. That means to ensure you are compliant, you need to find out or determine the export control classification.

I certainly understand the difficult situation you are in and have worked with other companies who face the same problem, including dealing with customers who do not have a clue about ITAR and EAR classifications.  There is no easy way to deal with the situation but you are on the right track by inquiring with the customer so as to determine the export classification and licensing requirements.  Sometimes it helps if you make their cooperation on export classification a part of a contract or proposal.  The other advice is if you seek such information, the best place to find export classification information is to try to find the export compliance person, legal staff or shipping associates.

Our current DSP-73 license has a listed foreign consignee who is going out of business. A new foreign consignee will need to be found. I know I have to submit a new DSP-73 license to add a new foreign consignee. Can I have two DSP-73 licenses, for the same product line, running concurrently until all the repairs temporarily exported under the first license are completed and returned to the U.S.? Alternatively, can I apply for a new DSP-73 license and have the parts temporarily exported under the old license and re-imported under the new license once repaired?

You may have as many DSP-73s as you need for the same product line. 

Generally speaking, you may not export items under one DSP-73 and import those same exact same items under a different DSP-73 unless you request and obtain a General Correspondence approval from DDTC approving you to do so.

Can anyone apply for a GC (General Correspondence) request to re-transfer/re-export of goods? Does it have to be the US exporter/approved consignee/end user on the DSP-5 license who has to facilitate this activity?

Typically one of the parties you mentioned would apply for the GC but in special circumstances another party may apply for the GC.

When using ITAR exemption 123.4(a)1 I have always made sure that all documents on the import referenced the exemption and the license. I have also made sure that I have a formal entry and that when I return the unit that the entry number is referenced on the documents/AWB. I make sure that all record keeping ties back to the original shipment/license/replacement etc. I was having a conversation with some people and I was told this was not necessary. Can anyone comment on the regulation?

You may be doing more than the ITAR requires.  The ITAR requirements are in 123.4(d). 

  • At the time of import, file the US Customs document and include the statement required by ITAR 123.4(d)(1)(i) on the import document.  Also, include on the invoice or other appropriate document a list and description of the defense articles being imported.
  • At the time of export, file your EEI citing 123.4 as the export authorization and provide Customs with a copy of the import document or the entry document number.

It is often a good practice to do more than the ITAR requires to ensure compliance. Many companies have many mistakes complying with 123.4 for various reasons.  I think what you are doing is a good system to prevent violations.   If you are happy with your current approach, I would not change it.

I am participating in a collaborative effort with the gov't (federal, state, and local) for commercial companies and non-profits to establish a web site to share critical technical information regarding cyber security. It includes information on the types of cyber-attacks the organizations/companies are seeing as well as mitigation/solutions to protect and defend networks. We are not sure if the information will include military critical information but certainly sensitive information that we would not want anyone to see except for our members. We are trying to develop membership criteria to access the information, would it make sense to use the Joint Certification Program to vet our users. Users would not be exporting information to non-members. Should we use the ITAR definition for US persons as criteria? This is new ground for sharing of information and we need some guidance.

If you have ITAR technical data or will be providing ITAR defense services, the ITAR definition of a US person and foreign person will help you identify ITAR export compliance issues.  In addition to looking at whether a person is US or foreign, for ITAR compliance purposes you need to look at where the recipient is located.

Our US company plans to hire a US citizen "expert" consultant to assist with a training workshop that will occur in a foreign country. We will be applying for a TAA with DDTC, however the guidelines are vague as to whether we need to include the consultant on as a US signatory or not as he'll be working under our direction. Maybe it'll be easier to hire him as a temporary employee?

If he is an employee of the US signatory or a foreign signatory, he does not have to be identified separately.  If he is not an employee of any company in the agreement, I recommend that you include him/his company as a signatory.

We have recently rebaselined our TAA, only to receive notice that our customer would like to replace one of the foreign consignees.  We believe this will require an amendment to the TAA, however the customer is requesting a "minor amendment" which we are unfamiliar with. Could you provide direction on what a "minor amendment" entails?

Adding a new foreign consignee is not a minor amendment.  Deleting an existing foreign consignee without adding a new foreign consignee is normally a minor amendment. 

A minor amendment does not require prior approval from DDTC.  You just change the agreement, for example, to remove an existing foreign consignee, send the executed amended agreement to DDTC.  You will find much more information about minor amendments in the DDTC agreements guidelines document.

I'm a U.S. citizen from birth, and have worked for an electronics company the past 12 years that is certified for ITAR. My mom was born in Canada, so Canadian citizenship is my birthright as well. I've recently applied for my Canadian citizenship card, and I will be moving to Canada in May. Can I continue to work for my current employer? I won't be sharing data with Canadian companies or anything; I would simply work from long distance, doing the same thing I am doing now.

You personally are a US person.  Your US employer may be able to use the ITAR 125.4(b)(9) exemption.  If not, it most certainly may apply for a license or agreement to enable you to continue to work for your US employer.

Our company is in Canada and we are owned by a US Company. We manufacturer machined parts for subsea products, radar type of equipment for military applications (aircraft, navy vessels, tank turrets). The components we supply are for clients worldwide. The majority of the assembled parts we provide are either made in Canada or have a small portion of US content. Do the parts we make for radar targeting pods automatically make our entire assembly ITAR controlled even if there is a small US content part installed? The fact that a tracking radar is on the US munitions list makes me think that our Canadian product, that we ship to countries outside of the US is ITAR controlled.

The ITAR controls items manufactured outside of the United States if those items contain US origin ITAR controlled parts or components or if those items were produced using US ITAR technical data or defense services.

We are due to move premises in the next few months. We hold a number of TAA's and associated technical data. The new premises is not listed on any of the TAA's, what do we need to consider before moving?

You should update your registration and make simple amendments to your TAAs to reflect the new address.

We are a US corporation providing engineering and integration services to NASA and the aerospace community. We have a German affiliate who, under a TAA, provides engineering and design services for certain projects. We are jointly designing a commercial research facility which will fly on the International Space Station. Our German affiliate has produced drawings that we have forwarded to a US fabrication shop to produce "build to print" aluminum boxes which will make up the facility. We need to ship the boxes back to Germany for "fit check" and then they will ship them back to the US for final integration and delivery. These are essentially "blank" boxes which have no ISS unique geometry, interfaces, connectors, etc. and include no electronics, computers, etc. They are essentially physical manifestations of the German developed design drawings. Does this box require an export license? Is it covered or classified as hardware specific to the international space station transferred to the Department of Commerce by commodity jurisdiction action, and would therefor require no further licensing?

We, like the State Department, would have to have the detailed technical specifications for this item to determine whether it is on the US Munitions List.  The USML controls items specifically designed or modified for space applications. 

If you send a commodity jurisdiction request to the State Department, it may decide that it wants an item specially designed for the ISS to be controlled by the Commerce Control List instead of the USML.  You must obtain a State Department CJ determination before you may treat an item specially designed for the ISS as not being on the USML.   If State transfers it to the CCL, it normally would be classified as 9A004 and require a Commerce Department export authorization instead of a State Dept. authorization.

Is there a difference between ITAR controlled and US Dept. of State controlled? My company is located in Canada and when we receive items from the US that we are going to re-transfer outside of Canada and the US it normally comes with a DSP-5. Does the DSP-5 license automatically identify the part received from the USA as ITAR? The item I am referring to will be implemented into a military application end use.

Because the US State Department administers the International Traffic in Arms Regulations (ITAR) then US State Department controlled often means the same as ITAR controlled.  The DSP-5 is one of the licenses that may be used to export ITAR items.

Where does the ITAR regulation allow for self-determination/self-Classification of a product that a company produces?

The ITAR does not prohibit self-classification so you may do it.  Nowhere does the ITAR say you have to get the government to classify your items.

I am a UK defense company; I want to scrap/dispose of ITAR controlled material. How can I do this?

Submit a General Correspondence letter request to DDTC requesting authorization to scrap or dispose of the defense articles.  In your request describe the measures you will take to ensure the items are completely destroyed, unusable and unrecoverable.  See ITAR 123.9(c).

Is there a government avenue of asking a question about my product PRIOR to submitting a CJ for a product determination?

You may call DDTC and have an informal phone conversation prior to submitting your CJ.

Am I required to obtain a DSP-5 in order to ship against a DSP-73 for repair overseas?

No.  If you have a DSP-73 temporary export license to send something out of the US for repair and return to the US, you do not need a DSP-5 permanent export license.

I would like to know what the differences are between 124.16 and 126.18.

124.16 allows a foreign party on a TAA or MLA to get all foreign nationals from NATO+ countries authorized by simply following the instructions in 124.16.   Once approved, the foreign party may share authorized defense articles with them.  The foreign national is not required to do additional screening or monitoring of its authorized foreign national employees.

126.18 is an exemption that a foreign party may use to transfer defense articles to foreign national employees if the foreign party is willing to do a US export/reexport compliance screening on the foreign national employees and continuous monitoring of the foreign national employees activities involving 126.1 countries.  To use the 126.18 exemption, the foreign party takes on the responsibility of ensuring the foreign national employee is a reliable recipient of defense articles.

I'm looking into purchasing software that is ITAR controlled. The software would be used in the analysis of product designs and may lead to different design iterations, but the software itself would not be a part of the product. Currently, the product is not ITAR controlled. Would use of the ITAR controlled software in the design of the product cause the product to become ITAR controlled?

The use of an ITAR controlled product to produce a second item does not necessary cause the second item to be ITAR controlled.

We are a wire producer, who manufactures wire for many applications. Most of our products are used commercially, but some may find their way into military applications. Everything we make is made to order, meeting specific specs for tensile strength, alloy composition, and of course size.

These technically aren’t modified and they are not necessarily specifically designed for military use since that same composition and size could potentially be used for anything. Will we have ITAR concerns if our wire is used in a defense application which is sent overseas?

Yes, you could have ITAR problems.  If my company designs a wire harness in a specific configuration, length, etc. for a battle tank and order it from your company, it could be controlled by the words "designed or modified" for a battle tank.  In recent experience the Directorate Defense Trade Controls has made formal, written, Commodity Jurisdiction (CJ) determinations that certain items in this type of situation are not controlled by the ITAR.  I do not know what DDTC would say in response to a CJ request for your item.  And, it might be that some of your items are ITAR controlled and some are not.  It all depends on the details of each item.

If you are not sure if the ITAR controls an item, you may request a CJ.  I recommend you do so.

Are there any special steps that must be taken when a Chinese owned company purchases a US based company that manufactures components for military/defense equipment? Once purchased, the US based operations will cease manufacturing these components and will no longer do any military/defense business. What steps should be taken to "cleanse" any existing ITAR controlled data & information from the company? Are there consultants or businesses out there that can assist with this "cleansing" process?

Chinese ownership of a US company does automatically create ITAR or EAR export compliance issues.  Exports to the PRC and release of tech data to Chinese nationals in the US or abroad create export compliance issues.  Chinese ownership may increase the likelihood that such things may occur but the ownership itself is not an EAR or ITAR issue, other than the US ITAR registered party must notify DDTC of the planned acquisition.

What address do you send your completed DSP-5 form to?

DDTC generally prefers all DSP-5 applications be submitted electronically using D-TRADE.  If you want to submit a paper form, contact the help desk and ask if they will allow it.  If yes, get the address from them.

 

A company manufactures ITAR controlled products and they are fully familiar with the ITAR process. However, one question keeps on popping up: When they respond to a foreign RFQ/RFI, if they provide a detailed list of equipment and a system level drawing with our quote, does this require a DSP-5? Essentially, I wonder if they need DSP-5 licenses for every foreign quote they make as their interpretation is that such a quote could be construed as a "defense service" (i.e. even "commerce" (non-ITAR) products offered as a system to a foreign military is considered as a "defense service"). This company does NOT handle any USG secure/classified items. How do companies dealing in the international marketplace handle ITAR when offering responses to RFQ/RFI? In the "defense service" label being misinterpreted?

I assume you are talking about a US company.  Without seeing the response to the RFQ/RFI I cannot make a final determination.  Generally speaking, the biggest issue for a written reply to an RFQ/RFI is whether the reply contains "technical data" as defined by the ITAR (or, when applicable, as defined by the EAR).  In my experience, the initial written reply usually does not involve a "defense service" as defined by the ITAR. 

Sending ITAR technical data in the reply requires a DSP-5 unless there is an ITAR exemption available (e.g., the 126.5(b) Canadian export exemption).  Therefore, you should carefully review the written reply to determine if it contains "technical data," as defined by the ITAR.  In the event you export a defense service, you normally would use a Technical Assistance Agreement ("TAA"). 

Finally, in the event the reply contains EAR controlled technical data or "technology" you need to comply with EAR requirements.

 

We have a TAA that specifies "export of... hardware will not be managed through this TAA. The export of...hardware will be managed through a separate TAA or through this TAA with a future amendment." The Guidelines for Preparing Electronic Agreements specifies that "the value of all USML hardware being exported (temporarily exported) by the applicant in furtherance of the agreement via DSP-5 (DSP-73) or DSP-85 licenses" should be included in the value established in the TAA. When we apply for a separate license for permanent (temporary) hardware export, do we need to amend the TAA to include the values for these licenses and/or obtain a separate TAA for these exports? Or is the separate license sufficient by itself?

If you will be exporting under a license in furtherance of a TAA, you need to amend the TAA to authorize that and to increase the value of the TAA accordingly as you described.

 

I am buying a commercial part that has already been classified as EAR99. However, I am giving this part a company part number and putting an ITAR distribution statement on the drawing with the company part number because the design package we export needs to be ITAR controlled. Does this distribution statement on the drawing then turn the EAR classified part into an ITAR controlled item? We are not altering the component in anyway just buying it the way it comes.

A distribution statement has no impact on the export control jurisdiction or status of any item.  The regulations determine jurisdiction and status.  If the statement was important, everybody would mark all ITAR items with the statement "This item is EAR99" to take the restrictions off of it.

 

I am a retired US military officer living abroad and a citizen of the US. I am considering employment with a private defense firm based in Denmark as a full-time employee providing consultancy, program management and sales services for their defense equipment and programs. Am I required to obtain an ITAR license for export considering my defense background was in the US military and the Danish based firm is in a NATO partner country and works with US based defense firms?

ITAR authorization is required for you to release US origin ITAR controlled technical data to foreign parties. 

The ITAR is not clear as to whether you need ITAR authorization to provide a "defense service" to your foreign employer.   DDTC published a proposed rule to say that you do not need authorization to provide a defense service to your foreign employer, but DDTC has not implemented that as a final rule.  If you want to err on the safe side, submit a General Correspondence request for approval to DDTC.

 

If we transfer data to a company in Canada under a TAA, could that company rely on the Canadian exemption to retransfer unclassified data (that would ordinarily qualify for the Canadian exemption) to its subs in Canada or would the subs need to be named as subs on the TAA?

ITAR 126.5(d) authorizes the retransfer of eligible defense articles to eligible parties in Canada, so first your subs would have to be registered under the Canadian CGP and the tech data would have to be eligible.  The ITAR 126.5(d) says you must obtain approval from the original US exporter before you may use the exemption to retransfer in Canada.  If you satisfy those requirements, 126.5(d) is available.

 

We are an engineering services company doing ITAR work for Boeing Seattle. Can we hire a Canadian citizen to work on any ITAR project?

You most likely need to get an approval from DDTC.  Without a detailed description of the scope of the person's activities, what you will do with the person, and the USML categories involved, we cannot answer the question.

 

I have recently registered as a Broker at the request of a company that intends to use my firm to market products to foreign militaries. The registration approval letter states “This registration serves as a precondition to submitting an application for a brokering license or other approval from the Directorate of Defense Trade Controls (DDTC)”. What is a brokering license and how do you apply for a brokering license or other approval?

Certain brokering activities require that you either obtain prior authorization from DDTC or that you notify DDTC in advance of the activity.  ITAR Part 129 is the ITAR brokering rules.  See particularly 129.6 - 129.8.

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