Transcript blankcbs - Pennsylvania State University
OVERVIEW OF EXPORT CONTROL ISSUES
UNITED STATES EXPORT LAWS AND REGULATIONS Export of Defense Articles, Defense Services and Technical Data Export of Dual Use Commodities and Technical Data
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Enabling Status Arms Export Control Act Export Administration Act
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Regulations International Traffic in Arms Regulations (ITAR) Export Administration Regulations (EAR)
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Department and Office Administering the Regulations and Issuing The Licenses U.S. Department of State, Bureau of Political-Military Affairs, Directorate of Defense Trade Controls (DDTC) U.S. Department of Commerce, Bureau of Industry and Security (BIS)
UNITED STATES EXPORT CONTROL SYSTEM
The export control system's three principal functions are to: 1 Identify technologies and products that need to be controlled 2 Review and evaluate export license applications 3 Enforce Export Controls
Reasons for Control
Some of the reasons that the U.S. government has export controls in place are:
Foreign Policy
National Security
Human Rights Issues
Regional Stability
Proliferation Issues
INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR)
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Administered by U.S. Department of State
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Applies to Export of Arms, Ammunition and implements of war on the U.S. Munitions List (USML)
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Controls U.S. Exports of all USML products, technical data and defense services
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Controls foreign:
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Re-Exports of all U.S. origin products and technical data
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Exports of U.S. origin parts and components incorporated in foreign products
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Exports of Non-U.S. products manufactured using U.S. origin technology
EXPORT ADMINISTRATION REGULATIONS (EAR)
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Administered by the U.S. Department of Commerce
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Applies to Commercial and Dual Use Commodities
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Controls U.S. Exports Using Three General Policy Guidelines:
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Controls should be used on exports which would make a significant contribution to the military potential of any other country or combination of countries which would prove detrimental to the national security of the U.S.
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Controls should be used where necessary to further significantly the foreign policy of the U.S. or to fulfill its declared international obligations
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Controls should be used where necessary to protect the domestic economy from the excessive drain of scarce materials and to reduce the serious inflationary impact of foreign demand
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Controls Foreign:
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Re-Exports of all U.S. origin products and technical data
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Exports of U.S. origin parts and components incorporated in foreign products
WHAT DETERMINES IF AN ITEM IS A DEFENSE ARTICLE?
(ITAR §120.3)
It is specially designed, developed, configured, adapted, or modified for a military application, and
It does not have predominant civil applications, and
It does not have performance equivalent (defined by form, fit, and function) to those of an article or service used for civil applications; or
It is specifically designed, developed, configured, adapted, or modified for a military application, and has significant military or intelligence applicability such that control under the ITAR is necessary.
Commodity Jurisdiction
If your product/technology does not clearly fall within one of the USML categories, then you need to apply for a Commodity Jurisdiction.
The Commodity Jurisdiction is where the DDTC’s Office of Defense Trade Controls Policy (DTCP). will review your information to determine if the item is under the USML, has a strictly commercial application or dual use purpose.
INTERNATIONAL TRAFFIC IN ARMS REGULATIONS (ITAR)
WHAT IS COVERED BY THE UNITED STATES MUNITIONS LIST Defense Articles Defense Services Technical Data
WHAT IS A DEFENSE SERVICE?
(ITAR §120.9) The furnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles; or The furnishing to foreign persons of any technical data controlled under the ITAR, whether in the United States or abroad or Military training of foreign units and forces, regular and irregular, including formal and informal instruction.
WHAT IS TECHNICAL DATA?
(ITAR §120.10)
Information which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles.
This includes information the form of blueprints, drawing, photographs, plans, instructions and documentation.
Software including, but not limited to, the system functional design, logic flow, algorithms, application programs, operating systems and support software for design, implementation, test, operations, diagnosis and repair.
WHAT IS NOT TECHNICAL DATA?
(ITAR §120.10)
Information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges, and universities or information in the public domain.
Basic marketing information on function or purpose or general system descriptions of defense articles.
As a general rule, if you would give the information to your closest competitor, it probably is not considered technical data.
WHAT IS INFORMATION IN THE PUBLIC DOMAIN?
(ITAR §120.11) Information which is published and which is generally accessible or available to the public:
Through sales a newsstands and bookstores
Through subscriptions which are available without restriction to any individual who desires to obtain or purchase the published information
Through second class mailing privileges granted by the U.S. Government
At libraries open to the public or from which the public can obtain documents
WHAT IS INFORMATION IN THE PUBLIC DOMAIN? (cont) (ITAR §120.11) Information which is published and which is generally accessible or available to the public:
Through patents available at any patent office
Through unlimited distribution at a conference, meeting, seminar, trade show or exhibition, generally accessible to the public, in the United States
Through public release after approval by the cognizant government department
Several others
Clearing Documents for Public Release
If you have a document (paper, presentation, data sheet, etc) that you would like to put into the public domain you have two choices:
If the information is owned by a U.S. government program, you need to contact the program office (likely public affairs) and request permission for release
If the information is not owned by any or by a specific government program, then your request is sent to the Office of Security Review (OSR)
EXPORT AUTHORIZATIONS
Permanent Export License –for hardware and certain technical data Temporary Export License –for trade shows or demonstration of U.S. hardware or return to a foreign vendor for repair Temporary Import License –U.S. demonstrations/exhibits of foreign origin items Exemptions for Export/Import of Hardware Technical Assistance Agreement (TAA) –for the performance of a defense service or the disclosure of technical data Manufacturing License Agreement (MLA) –for the manufacture of defense articles abroad which involves the export of technical data or defense articles or the performance of a defense service Exemptions for Export of Technical Data
FOCUS ON TECHNICAL DATA
HOW IS TECHNICAL DATA EXPORTED?
Contrary to the ordinary meaning of the word “export,” an “export of technical data” under United States export laws is not limited to the physical conveyance of technical data to a person or location outside the national boundaries of the United States.
Instead, export in the context of technical data means any release (verbal, visual, etc) of technical data from the United States with the knowledge or intent that the data will be shipped or transmitted from the United States to a foreign country.
Technical data is exported upon release to a foreign person whether in the United States or abroad.
HOW IS TECHNICAL DATA EXPORTED?
Technical Data is considered to have been exported if:
It has been shipped or transmitted out of the United States. This includes a letter, telex, facsimile, e-mail, and telephone;
It has been disclosed to foreign nationals in the United States;
It was included in oral discussions with a foreign person in the U.S. or abroad. This includes trade shows and seminars where foreign persons are present; or
If personal knowledge or experience, gained in the United States, has been applied abroad.
TECHNICAL DATA EXEMPTIONS
(include, but not limited to, the following)
Copies of technical data previously authorized for export to same recipient
Basic operations, maintenance, and training information relating to equipment authorized for export to the same recipient
Technical data being returned to original source of import
Technical data to be used overseas solely by U.S. persons
Technical data in furtherance of a technical assistance agreement or a manufacturing license agreement approved by the Directorate of Defense Trade Controls
TECHNICAL DATA EXEMPTIONS
Qualifying for an exemption does not mean that we can just release the technical data without any further thought.
To claim an exemption, the proper certification must be made on the technical data or letter containing the technical data, e.g. “22 CFR 125.4(b)(5) applicable” would be the certification for operation and maintenance manuals.
Making An Export
Filing of the License Documentation
Hand Carrying Items – Self Endorsement/Letters
Verbal
Mailing
Electronic (email)
Filing with Customs (Automatic Export System – AES)
Use of Freight Forwarder
File on your own (Contact BIS – Training and Certification)
Compliance Program
The key to any good export/import compliance program is
training and
documentation.
Training/Compliance Reviews
Training – Management, Purchasing, Engineers, Contracts, Shipping/Receiving, Accounting
Training Materials and Records
Self Assessments/Audits
Documentation
Commodity Jurisdiction requests
Commodity Classification Requests
“Bad guy” check
Applications and supporting data
Licenses and Agreements
Commission reports
Annual reports of Sales or Transfers (MLA)
Documentation
Technology Control Plan
Non US Visitors
Non US Employees/Contractors
Foreign Briefings and Hand-carrying Letters
Instructions to shippers/freight forwarders
AES filings
Duty Free Entry Instructions
Exemptions/Exceptions
Documentation
Correspondence to DoS/DoC
Execution/ Non-execution of Agreements
Return of Licenses
Initial exports under Agreements
Request to Review Provisos
Marking Documents –
Destination Control Statements
Exemptions, Licenses, Agreements
Marking even to other US Entities
VIOLATIONS AND PENALTIES
(ITAR §127)
VIOLATIONS To export or attempt to export defense articles, defense services, or technical data without the written approval from the Directorate of Defense Trade Controls
To import or attempt to import any defense article whenever a license is required without such license
To conspire to export, import, re-export or cause to be exported, imported, or re-exported any defense article, defense service, or technical data without the required written approval from the Office of Defense Trade Controls
To violate any of the terms or conditions of licenses or approvals granted by the Office of Defense Trade Controls
PENALTIES CIVIL
May not exceed $500,000 for each violation
May be denied export privileges for some period of time
Can be imposed on the company and individuals
PENALTIES CRIMINAL For each violation, a fine of not more than $1,000,000 or imprisonment of not more than 10 years or both may be applied to any person who:
willfully violates any provision of the Arms Export Control Act or the International Traffic in Arms Regulations, or
willfully makes an untrue or misleading statement of a material fact in a registration or request for export authorization, or
willfully omits to state a material fact in a registration or request for export authorization.
INDICATIONS OF POTENTIALLY ILLEGAL EXPORTS (4) (5) (6) (7) (1) (2) (3) (8) (9) (10) (11) (12) (13) The customer's/purchaser's agent is reluctant to provide the end-use or end-user information The performance/design requirements are incompatible with the destination country's resources or environment, or with the consignee's line of business.
The stated end-use is incompatible with the customary or known industrial application for the equipment being purchased.
The stated end-use is incompatible with the consignee's line of business.
Little or no customer business background information is available.
The customer is willing to pay cash for a large item or order.
There is an apparent lack of customer familiarity with the commodity's performance/design characteristics or uses.
The customer/purchasing agent refuses installation or service contracts that are normally accepted in similar transactions.
There are ill-defined delivery dates or the use of delivery locations that are inconsistent with the type of commodity or with established practices.
Freight forwarders are used as ultimate consignees.
Intermediate consignees are used whose location/business is incompatible with the purported end user's name of business or location.
The packaging or packing requirements are inconsistent with the shipping mode and/or destination.
Evasive responses are given to questions regarding any of the above, as well as whether equipment is for domestic use, export, or re-export.
Resources
Department of State/Commerce
DoS Website: www.pmddtc.state.gov/ DoC Website: www.commerce.gov/ Bureau of Industry and Security (BIS) www.bis.doc.gov
Society for International Affairs (SIA)
http://www.siaed.org/