EXPORTING UNDER THE INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR)

1. EXPORTING UNDER THE INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR) Presented by: Richard L. Furman

2. PURPOSE OF DEFENSE TRADE CONTROLS

3. The ITAR are the regulations written to enforce the Arms Export Control Act, which is intended to regulate the export and import of defense articles, technical data and defense services. The ITAR is administered by the United States Department of State, Directorate of Defense Trade Controls (DDTC).

4. LICENSING REQUIREMENT If a commodity is listed subject to the ITAR it may only be exported if a Export license is issued by the DDTC. A license may only be issued to a “U.S. person”, with a few exceptions.

5. LICENSING con’t. To determine if a license is required: 1. Find out if commodity is on the USML, Part 121 of the ITAR. 2. If not file a Commodity Jurisdiction request with the DDTC. 3. If commodity is subject to the ITAR you must be registered with the UDTC. 4. Registration is required if you engage in the U.S. in the business of manufacturing, exporting or temporarily importing defense articles or furnishing of defense services.

6. REGISTRATION Registration does not confer any export privileges, but it is a prerequisite to export licensing approval. Even engaging in manufacturing or exporting or temporarily importing defense articles, or furnishing defense services on only one occasion must register. Registering is a simple process. Just complete a Department of State form DS-2032 online and pay the required fee. The current fee for first time registrants is $2,250, renewals are $2,750.

7. REGISTRATION con't. For registrants that have submitted and received favorable authorization of ten or fewer license applications or request for authorizations during a 12 month periods the fee is $2,750, plus $250 times the total number of applications over 10. In certain instances the fee will be 3% of the total value of all applications or $2,750, whichever is greater.

8. REGISTRATION con't. 1. The average review time for a registration request is 45 days. It is recommended that an online application be submitted 60 days in advance of the an intended initial shipments or any renewal. 2. A unique registration code will be assigned once the registration is approved. 3. The code is unique to the registrant and should not be posted online or given out freely to the public. 4. New and renewal registrations are valid for 12 months from date of issuance.

9. USML CONSISTS OF 21 CATEGORIES • Guns and Armament. • Ammunition/Ordnance. • Ground Vehicles. • Aircraft and Related Articles. • Military Training Equipment. • Surface Vessels of War and Special Naval Equipment. • Firearms, Close Assault Weapons and Combat Shotguns. • Personal Protective Equipment. • Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs , and Mines. • Explosives and Energetic Materials, Propellants, Incendiary Agents, and Their Constituents.

10. USML, con’t. • Military Electronics. • Materials and Miscellaneous Articles. • Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment. • Spacecraft Systems and Associated Equipment. • Nuclear Weapons Related Articles. • Classified Articles, Technical Data, and Defense Services Not Otherwise Enumerated. • Directed Energy Weapons. • Gas Turbine Engines and Associated Equipment. • Submersible Vessels and Related Articles. • Articles, Technical Data, and Defense Services Not Otherwise Enumerated.

11. TEMPORARY IMPORT OF DEFENSE ARTICLES 1. Temporary imports of defense articles are subject to the DDTC’s jurisdiction. 2. Permanent imports of defense articles are under the control of Alcohol Tobacco and Firearms (ATF). 3. A temporary license issued by DDTC is required for import and subsequent export of defense articles.

12. Temporary Export Licenses The DDTC may issue a license for the temporary export of unclassified defense articles, exported for a period of less than 4 years and returned to the United States. You may not transfer title the articles during that period.

13. LICENSING •Department of State approval of a license application is required prior to the export of defense articles or defense services. • About 30 percent of the applications processed by the State Department are referred to other offices and agencies (e.g., the Department of Defense) for comment and recommendations. This is what is referred to as “staffing” the case.

14. LICENSING con’t. • During the review process, a computerized review of all parties to the proposed transactions is made against a “watch list” of known or suspected export violators. A “match” results in a full compliance review by the State Department before final action is taken on the application. • In addition to sorting through detailed technical specifications, the license application review process clarifies the ultimate end-use and end-user of the defense export, as well as facts related to intermediate handling.

15. LICENSING con’t. • From the enforcement point of view, the review process provides an avenue to prevent or eliminate diversions, and to assist the U.S. Government in investigations and prosecutions should an export violation be suspected or reported. • In submitting license applications, companies must certify eligibility to export and an understanding of the laws governing such exports. Moreover, in carrying out the physical act of exporting, they must meet certain conditions in terms of documentation (electronic reporting of export information using the Automated Export System, “AES”) and handling (particularly of classified material).

16. LICENSING con’t. • Exporters must make clear on shipping documents that the defense export cannot be resold or retransferred without prior U.S. Government authorization – a licensing requirement that also involves compliance issues. To learn more about licensing, and to view the various licensing forms, please visit the D-Trade Info Center and the “Licensing” page on DDTC’s Web site.