ITAR is a set of regulations that companies trading in military and defense materials, technology, or information must observe. It is beyond reckless for any such company to do international trade business without an ITAR compliance program. With its wealth of related experience, Sequoia Legal can serve as your company’s ITAR compliance guide.
What Is ITAR Compliance?
So, what does ITAR stand for? ITAR stands for International Traffic in Arms Regulations. The US government takes ITAR regulations extremely seriously because violations can result in grave consequences for US national security.
ITAR is a complex set of regulations, and compliance requires a great deal of nuanced understanding of its requirements. Not only must you comply with ITAR regulations, but you must also comply with the terms of any licenses you receive pursuant to ITAR-related activities such as exports. Our ITAR compliance lawyers understand the complexities and nuances of ITAR compliance, meaning that we can help your company avoid trouble before it begins.
What Is The USML?
The USML in the United States Munitions List. The USML lists goods and services that ITAR regulations cover. The USML determines what items are ITAR-controlled. ITAR regulations cover the import, export, and transfer of items listed in the USML. Following is an incomplete list designed to illustrate the sort of goods and services listed in the USML:
- Materials and technology related to nuclear weapons;
- Chemical and biological agents;
- Classified information;
- Intelligence materials;
- Military training materials;
- Technical data;
- Various weapons such as missiles, bombs, rockets, torpedos, and mines; and
- Many other military and dual-use items.
Appropriately classifying items under ITAR is critical to compliance because not all restricted items are obviously subject to the USML and the ITAR regulations.
Who Must Be ITAR Compliant?
ITAR compliance requirements for ITAR rules and regulations apply to many different persons and entities, even if they are unrelated to the military or to the government. Such parties include:
- Any organization that deals with information concerning items listed in the USML.
- Any company that does business with the US military (not limited to contractors and subcontractors).
- Third-party contractors that work with any organization are covered by (1) and (2) above, including wholesalers, distributors, suppliers, etc.
- Organizations connected to USML-listed goods and services, including tech companies, importers, exporters, research labels, educational institutions, among other parties.
When in doubt, consult with an attorney because the consequences of violation can be catastrophic.
How Do I Achieve ITAR Compliance?
Compliance with ITAR requirements is burdensome, no question about it. Following is a general outline of some of the steps that your company will need to take:
- Determine whether ITAR applies to your business. You will need a lawyer for this.
- Assign a team to learn the USML and ITAR guidelines. It is not enough that your lawyers understand these matters. Some of your employees need a basic understanding as well.
- Reclassify all company data in compliance with USML requirements.
- Register with the US State Department Directories of Defense Trade Controls (DDTC).
- Renew your DDTC registration every 12 months. You must submit your renewal documents at least 60 days in advance.
- Comply with every provision of the Arms Control Export Act;
- Refrain from sharing US military-related data, plans, documentation, or technology with any individual or entity that lacks special permission from the US government. Perform strict background checks as a matter of routine.
Besides these steps, you must create and maintain a robust security system to prevent violations before they happen. You must take particular care to avoid accidentally sharing sensitive information with foreign persons or nations through cloud storage, even with US service providers that might export your data.
Sequoia Legal’s international business law attorneys can show you how to get ITAR registered. We can also assist you in achieving and maintaining compliance.
What Are The Penalties for ITAR Compliance Violations?
The DDTC is responsible for enforcing ITAR compliance regulations. ITAR sanctions and penalties for violations can include:
- Loss of your company’s export license;
- A ban on participating in ITAR-governed transactions;
- Fines of over $1 million per violation; and
- Imprisonment of up to 20 years for top company executives.
These penalties can also apply to “coverup” activities such as lying under oath or in an affidavit.
ITAR compliance is a legal world all its own. Despite all of its risks, the potential rewards are substantial. Before your company engages in any potential ITAR-related transactions, call Sequoia Legal at (303) 476-2851 or contact us online. We will make sure your company is ready for action when the time comes.