US Export Control Primer

*Please consult an Export Compliance Professional before taking any action.

1. EAR:
  • Administered by the U.S. Department of Commerce (Bureau of Industry and Security - BIS).
  • Regulates the export of dual-use items, which have both commercial and military applications, and some purely commercial items.
  • Covers items on the Commerce Control List (CCL).
  • Emphasizes technology and products that require control for reasons such as national security, foreign policy, or anti-terrorism.

2. ITAR:
  • Administered by the U.S. Department of State (Directorate of Defense Trade Controls - DDTC).
  • Regulates the export of defense articles, services, and technical data specifically designed for military use.
  • Covers items on the U.S. Munitions List (USML).
  • Focuses on protecting U.S. military capabilities by strictly controlling items with inherent military functions.

To determine whether a capability falls under ITAR or EAR, a company can follow these steps:

1. Check the Nature of the Item:
  • Determine if the capability is specifically designed, developed, configured, adapted, or modified for military use or for a defense application.
  • If yes, it likely falls under the ITAR and should be checked against the U.S. Munitions List (USML).

2. Review the Commerce Control List (CCL):
  • If the item has dual-use (both commercial and military applications) or is purely commercial, it may be subject to the EAR.
  • Check whether it is listed on the Commerce Control List (CCL) under an Export Control Classification Number (ECCN).

3. Consider End Use and End Users:
  • Analyze the intended application, users, and potential military implications. ITAR controls stricter military-related exports, while EAR covers broader applications.

4. Consult the Commodity Jurisdiction Process:
  • If there is uncertainty, companies can submit a Commodity Jurisdiction (CJ) request to the U.S. Department of State for an official determination on whether an item is ITAR-controlled.

5. Seek Expert Guidance:
  • Work with export compliance experts or legal counsel to evaluate complex cases and ensure accurate classification.

Proper classification is crucial for compliance, as incorrect determinations can lead to regulatory violations, penalties, and reputational harm.

The Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR) govern the export of sensitive items and technologies but have distinct scopes and focuses:

Defense Services (Under ITAR)

Definition:

Defense services are defined in ITAR 120.9 as the provision of assistance (including training or technical expertise) to foreign persons in the design, development, engineering, manufacture, testing, repair, operation, maintenance, or modification of defense articles. This includes:

  • Direct assistance with defense articles (e.g., military equipment).
  • Providing military training, even without physical export.
  • Using technical data controlled under ITAR to support foreign entities.

Examples:

  1. Military Equipment Training: A U.S. company training foreign military personnel on how to operate a controlled missile system.
  2. Engineering Support: Assisting a foreign company in integrating a U.S. military-grade radar into their naval vessels.

Technical Data (Under ITAR)

Definition:

Technical data is defined in ITAR 120.10 as information that is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance, or modification of defense articles. This includes:

  • Blueprints, drawings, plans, diagrams, and models.
  • Manuals, instructions, and documentation containing technical specifications.
  • Software directly related to defense articles.

Exclusions: Public domain information, basic marketing materials, and general system descriptions.

Examples:

  1. Controlled Documentation: Sharing engineering blueprints of a military UAV (Unmanned Aerial Vehicle) with a foreign partner for development purposes.
  2. Encryption Software: Providing software source code for a secure communication system used in military operations to a foreign subcontractor.

Key Differences:

• Defense Services: Focus on actions—assistance and expertise provided to foreign persons.
• Technical Data: Focus on controlled information and documentation that enables the use or development of defense articles.

Both are tightly regulated under ITAR to protect U.S. military technology and ensure national security.

Licensing

A license is an authorization issued by the Directorate of Defense Trade Controls (DDTC) that permits the export, re-export, or temporary import of defense articles or technical data, as well as the provision of defense services.

Key Features:
  • DSP-5: Permanent export of unclassified defense articles or technical data.
  • DSP-73: Temporary export of defense articles (e.g., for trade shows or demonstrations).
  • DSP-61: Temporary import of defense articles.
  • Approval is required before exporting any item on the U.S. Munitions List (USML).

Example:
  • A U.S. company exporting military-grade radar systems to a NATO ally would require a DSP-5 license.
  • Sending a prototype weapon to a foreign testing facility for evaluation under a temporary agreement would require a DSP-73 license.

Technical Assistance Agreements (TAAs)

A TAA is a specific type of agreement under ITAR that authorizes the provision of defense services or the transfer of technical data to foreign entities, often without exporting physical items.

Key Features:
  • Required when providing training, technical know-how, or support related to defense articles.
  • Covers services such as installation, maintenance, testing, or training on controlled items.
  • Must be reviewed and approved by the DDTC.

Example:
  1. Training Foreign Personnel: A U.S. company providing training to a foreign military on how to operate or maintain a U.S.-designed missile system.
  2. Collaborative Design: A U.S. company working with an allied nation’s engineers to co-develop a subsystem for a military aircraft, involving the transfer of controlled technical data.

Differences Between Licenses and TAAs

  • Licenses: Focus on the export of physical items or technical data.
  • TAAs: Govern services and collaborations where no physical exports occur but technical data or defense services are provided.

Both mechanisms are essential tools under ITAR for ensuring compliance while allowing U.S. companies to support foreign partners in a controlled and secure manner.