ITAR Compliance

September 9, 2011, 2:44 PM

Many companies mistakenly assume their products are not subject to the International Traffic in Arms Regulations (ITAR). At first glance, the phase "defense-related products" can be deceiving. The reality is that items subject to ITAR may be difficult to identify. Despite this fact, a violation of ITAR can be an extremely costly mistake. Penalties for violations of the ITAR can reach into millions of dollars and can even include prison time. Therefore, ITAR compliance is becoming increasingly important to companies that manufacture, export, or broker in defense articles.

The place to start is the United States Munitions List (USML), which includes all products that are subject to ITAR and is broken down into the following categories:

  • Category I-Firearms
  • Category II-Artillery Projectors
  • Category III-Ammunition
  • Category IV-Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs and Mines
  • Category V-Explosives, Propellants, Incendiary Agents, and Their Constituents
  • Category VI-Vessels of War and Special Naval Equipment
  • Category VII-Tanks and Military Vehicles
  • Category VIII-Aircraft, [Spacecraft] and Associated Equipment
  • Category IX-Military Training Equipment
  • Category X-Protective Personnel Equipment
  • Category XI-Military [and Space] Electronics
  • Category XII-Fire Control, Range Finder, Optical and Guidance and Control Equipment
  • Category XIII-Auxiliary Military Equipment
  • Category XIV-Toxicological Agents and Equipment and Radiological Equipment
  • Category XV-Spacecraft Systems and Associated Equipment
  • Category XVI-Nuclear Weapons Design and Test Equipment
  • Category XVII-Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated
  • Category XVIII-[Reserved]
  • Category XIX-[Reserved]
  • Category XX-Submersible Vessels, Oceanographic and Associated Equipment
  • Category XXI-Miscellaneous Articles
It is your responsibility to confirm that the product your company manufactures, exports, or brokers is not included in any of the above categories. The USML has further details regarding specific products listed under each category. After a careful review of the USML, if your company is still unsure about whether a particular product is included in the USML, then you may want to consider submitting a commodity jurisdiction (CJ) determination to the Office of Defense Trade Controls. CJ determinations can take 4 to 6 months to process; however, once the determination is made, your company will have a written confirmation as to whether or not the product is subject to ITAR.

If your product is subject to ITAR, then you must submit a registration package to the Directorate of Defense Trade Controls (DDTC). This package includes a transmittal letter, a statement of registration, supporting documentation, and a $2,250.00 fee for first time registrants. It is extremely important that companies realize that this registration does NOT confer any exporting privileges. In order to export the ITAR controlled product, you must request and receive an export license subsequent to submitting the registration package. If you would like more information on how to registar with DDTC or apply for an export license, please feel free to contact me at recoley@kaufcan.com. -R. Ellen Coley