Export Compliance

What are ITAR and EAR?

If your company is involved in the buying, selling, or exporting of any controlled products, services, or related technical data, you are probably already familiar with the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). If not, you need to be! These export control laws are designed to prevent unauthorized foreign nationals from accessing sensitive technologies. This article reviews what ITAR and EAR compliance means, who needs it, and the penalties for non-compliance.

ITAR deals specifically with the export of items and services on the United States Munitions List (USML). EAR nominally deals with the export of everything, though restrictions only apply to items listed on the Commerce Control List (CCL). These are generally items that have both commercial and military applications.

If you or your company intend to export anything, then you need to determine if that item is controlled under ITAR or EAR, and if so, what licenses and procedures must be followed to legally export the item. Moreover, if you share any restricted technology with a foreign person in the U.S., then you must comply with all deemed export requirements.

Export control laws provide for substantial penalties, both civil and criminal. As of Sept 21, 2017, failure to comply with ITAR can result in civil fines as high as $500,000 per violation, while criminal penalties include fines of up to $1,000,000 and 10 years imprisonment per violation. Under EAR, maximum civil fines can reach $250,000 per violation. Criminal penalties can be as high as $1,000,000 and 20 years imprisonment per violation.

ITAR [22 CFR 120-130] EAR [15 CFR 730-774]
Regulates the export of technology designed specifically for military use. Regulates the export of everything.
Restricts the export of military items and defense articles specifically, as well as related technical data. Restricts the export of commercial technology with potential military applications.
Includes space-related technology because of application to missile technology. Includes many seemingly innocuous technologies that might have military applications.
Strict regulatory licensing ignores commercial or research objectives. Licensing addresses competing interests and foreign availability, combining commercial and research objectives with national security.

Do you need to be ITAR and EAR compliant?

All sellers, manufacturers, exporters, and brokers of items covered by the United States Munitions List (USML) or the Commerce Control List (CCL), must comply with ITAR and EAR regulations. ITAR applies even to domestic sales of restricted technologies to "foreign persons".

To help you decide if ITAR/EAR applies specifically to you, see this guide from the Directorate of Defense Trade Controls: Getting Started with Defense Trade.

What is covered by ITAR?

ITAR deals specifically with technologies (Defense Articles, Defense Services, and Technical Data) on the United States Munitions List (USML). This list is published annually on April 1, and it is then amended weekly via publications in the Federal Register. As of Sept 21, 2017, the USML has been updated 30 times since April 1.

Defense Articles

A defense article is anything on the USML. As of Sept 21, 2017, this list includes items in the following categories:

  1. Firearms, Close Assault Weapons, and Combat Shotguns
  2. Guns and Armament
  3. Ammunition / Ordnance
  4. Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, and Mines
  5. Explosives and Energetic Materials, Propellants, Incendiary Agents, and Their Constituents
  6. Surface Vessels of War and Special Naval Equipment
  7. Ground Vehicles
  8. Aircraft and Related Articles
  9. Military Training Equipment and Training
  10. Personal Protective Equipment
  11. Military Electronics
  12. Fire Control, Laser, Imaging, and Guidance Equipment
  13. Materials and Miscellaneous Articles
  14. Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment
  15. Spacecraft and Related Articles
  16. Nuclear Weapons Related Articles
  17. Classified Articles, Technical Data, and Defense Services Not Otherwise Enumerated
  18. Directed Energy Weapons
  19. Gas Turbine Engines and Associated Equipment
  20. Submersible Vessels and Related Articles
  21. Articles, Technical Data, and Defense Services Not Otherwise Enumerated

The full USML specifies in detail which items in each category are covered. Not all items in these categories are restricted.

SpaceExcess caters specifically to items in the bolded categories above, so sellers of those items in particular need to be fully aware of their ITAR status, and represent that status accurately.

Defense Services

Defense services fall into three main categories:

  • Providing assistance, including training, to foreign persons on anything related to defense articles. This includes design, development, manufacturing, maintenance, and so on.
  • Providing foreign persons with controlled technical data (see below).
  • Military training of foreign units and forces.

Technical Data

Finally, there are three main types of technical data:

  • Information other than software for the design, development, manufacturing, and so on of defense articles. This includes blueprints, drawings, documentation, and more.
  • Classified information about the defense articles and defense services listed above.
  • Software directly related to defense articles.

What to do if you are subject to ITAR:

If you determine that items you wish to export are subject to ITAR, then you must:

  • Register with the U.S. State Department's Directorate of Defense Trade Controls.
  • Obtain the proper licenses for the things you plan to sell or export.
  • Ensure your policies and procedures are compliant with ITAR requirements.
  • Make sure someone at your facility is educated about ITAR and trained in how to keep your policies and procedures compliant.

You are responsible for making sure that you are following all relevant ITAR guidelines. There is no program for third-party certification for ITAR compliance -- you must set up your systems appropriately and then make sure the rules are followed.

For other common ITAR compliance issues, refer to this checklist from the law offices of Williams Mullen.

What is covered by EAR?

The Export Administration Regulations (EAR) technically cover the export of anything, in that every exported item must be assigned an Export Control Classification Number (ECCN) that defines what type of thing it is. This number then serves as a lookup into the Commerce Control List (CCL), which identifies the export restrictions that apply to that item. As a practical matter, items not included on the CCL (and thus designated "EAR99") aren't subject to export restrictions, except with respect to a small group of blacklisted countries.

As of Sept 21, 2017, the CCL has eleven categories (with strange numbering) that only somewhat mirror the ITAR categories:

0. Nuclear and Miscellaneous
1. Materials, Chemicals, Microorganisms and Toxins
2. Materials Processing
3. Electronics
4. Computers
5 Part 1. Telecommunications
5 Part 2. Information Security
6. Sensors and Lasers
7. Navigation and Avionics
8. Marine
9. Aerospace and Propulsion

Each category has five subgroups:

A. Systems, Equipment and Components
B. Test, Inspection and Production Equipment
C. Material
D. Software
E. Technology

The category and subgroup are combined to form the first two digits of the item's Export Control Classification Number (ECCN).

Note that items on the CCL don't necessarily require a license for export, depending on the category and destination country. For more complete information, see the U.S. Commerce Department's website.

What to do if you are subject to EAR:

Every exporter should determine the Export Control Classification Number (ECCN) for all items to be exported, and then look up the export restrictions for those items on the CCL. In most cases, the items won't be subject to export restrictions, or may be restricted only against sale to proscribed countries. Otherwise, you may be required to apply for an export license from the Commerce Department.

Learn More:

The U.S. Department of State has more information on ITAR.

The Bureau of Industry and Security has a webinar on EAR compliance.

The Bureau of Industry and Security has an Introduction to Commerce Department Export Controls.

International Traffic in Arms Regulations: Are you ITAR Compliant?

ITAR/EAR and Directorate of Defense Trade Controls (DDTC) Quick Action Checklist.

SpaceExcess Export Policy

Sellers on the SpaceExcess website are required to properly represent the ITAR and/or EAR designations for items they list on the Site. SpaceExcess is not responsible for determining product classifications, licensing requirements, applicable sanctions, or restricted party screenings. Buyers and Sellers will be fully responsible for verifying information from each other to determine export classifications, licensing requirements, and applicable government requirements and restrictions, including but not limited to all current sanctions and restricted party screenings.