Export FAQs

Enforcement rests primarily with three different agencies of the U.S. government. They are:

• The U.S. Department of State: Directorate of Defense Trade Controls (DDTC). This agency is responsible for administration and enforcement of the International Traffic in Arms Regulations (ITAR).
• The U.S. Department of Commerce: Bureau of Industry and Security (BIS). This agency is responsible for administration and enforcement of the Export Administration Regulations (EAR).
• The U.S. Department of the Treasury: Office of Foreign Assets Control (OFAC). This agency is responsible for administering and enforcing a variety of economic and trade sanctions against certain countries and individuals.

Export controls are those processes and procedures within a company that ensures US Government export requirements can be met. Those controls include how items are classified, how access is controlled, how authorization for export is obtained, and how the items can be controlled throughout the business cycle within the company.

Export control regulations include the US Department of State’s International Traffic in Arms Regulations (ITAR), the US Department of Commerce’s Export Administration Regulations (EAR), and the Department of Commerce, Census Bureau’s Foreign Trade Regulations (FTR), found in 15 CFR Part 30.

There are also restrictions on the countries and entities that we can export to or do business with by the US Treasury Department’s Office of Foreign Assets Control (OFAC) that must be adhered to.

No, there is no certification process for export compliance. Export compliance is the responsibility of the individual company and must be developed and implemented by themselves.

It is recommended that an export control professional internal to the company be utilized or that a third party outside the company be brought in to evaluate and monitor your program.

You need to voluntarily disclose this violation to the appropriate governmental agency. A voluntary disclosure can be a mitigating factor in determining any fines or penalties you may be subject to under the law.

For more information about voluntary disclosures, refer to §127.12 of the ITAR and §764.5 of the EAR.

There are no set time limits for export license approvals but normally an ITAR license will take about 60 days and an Agreement will require 90 days to be approved. Commerce and Treasury Department approvals should be expected to take approximately the same amount of time.

Defense articles are restricted to varying degrees for Afghanistan, Belarus, Burma, Central African Republic, China, Cuba, Cyprus, Democratic Republic of Congo, Eritrea, Haiti, Iraq, Iran, Lebanon, Libya, North Korea, Somalia, South Sudan, Sudan, Syria, Venezuela and Zimbabwe.

The EAR has detailed Embargoes and/or Sanctions on Cuba, Iran, Iraq, Syria, North Korea, specific Russian industries and the Crimea region of Ukraine. Restrictions for commercial items are identified in the Commerce Control List (CCL) for each item and must be individually verified.

The ITAR identifies restrictions in the Section ‘Prohibited Exports, Imports, and Sales to or From Certain Countries’ (Section 126.1) and the EAR has limitations specified in the CCL and the Commerce Country Chart (Article 738.2 and Supplement 1), as well as Embargoes and Other Special Controls (Article 746).

OFAC also has trade sanctions on certain countries which can be found in the OFAC ‘Sanctions Programs and Country Information’ online. Note that the restrictions and limitations on specific countries in the regulations do change.

ITAR is the abbreviation for and the typical way to refer to the International Traffic in Arms Regulations, which documents the US State Department’s requirements for the export and import of specific items, referred to as defense articles, that are controlled for foreign policy and national security purposes. The authorization for the State Department to control exports and imports of defense articles and defense services is through the Arms Export Control Act.

ITAR Compliance means that an exporter or manufacturer of specific hardware (defense articles) needs to meet certain requirements and operate in a certain manner consistent with those requirements to be allowed to participate in the supply chain involved with these items.

The basic elements of a compliance program include documentation in formal written procedures, awareness training for applicable personnel in the control processes, maintaining proper records, auditing the process to ensure that it is being implemented, and investigating and reporting suspected violations. The end result is to enable your company to:

1. Determine the jurisdiction and classification of products
2. Control access to ITAR items and related documentation
3. Ensure that business transactions have proper legal authorization before exporting or importing
4. Control products throughout the complete life cycle process.
   

Any company that manufactures defense articles or is involved in the export of these items (exporters, brokers, and freight forwarders) must ensure that they are registered with the DDTC and meet any other applicable requirements specified in the ITAR. A defense article is any item or technical data listed on the United States Munitions List (USML).

Deemed exports involve the transfer of controlled items or information from one person to another. (Compared to the transfer of controlled items from one country to another.) As an example, if a U.S. citizen emails an ITAR-controlled or EAR-controlled blueprint to a French citizen, then an export is “deemed” to have occurred from the United States to France. The U.S. controls deemed exports in similar ways to actual (physical) movement of items overseas.

The process for becoming compliant with the ITAR starts with registering your company with the Directorate of Defense Trade Controls of the US State Department.

Then you will establish a compliance program that includes evidence of commitment to compliance from senior management, documentation in formal written procedures, awareness training for applicable personnel in the control processes, maintaining proper records, auditing the process to ensure that it is being implemented, and investigating and reporting suspected violations.

Penalties for violating ITAR requirements include denying the ability to export items, seizure of goods, significant fines, and potentially even jail time in the most extreme cases.

Fines can be over $1 million per violation in some cases. Companies are expected to voluntarily disclose potential violations and the degree of their cooperation with an investigation can be a mitigating factor relating to the extent of the penalties.

ITAR-controlled goods, referred to as defense articles, are those items that are specifically identified in the United States Munitions List, or USML, which is a section within the ITAR.

This list includes descriptions of the items that are controlled. A defense article is any item or technical data listed on the United States Munitions List (USML).

There is no such thing as ITAR certification. It is up to the individual company to ensure that it complies with ITAR regulations.

Compliance includes registration with the State Department’s Directorate of Defense Trade Controls (DDTC), establishing a compliance program within the company, and ensuring that the program is being effectively implemented.

The way to ensure that your company is compliant is to have an experienced trade compliance professional or team of professionals in your company develops and maintain a trade compliance program.

An alternative is to have an outside company come in and evaluate your operations, with the goal of providing a plan to become compliant. However, you will still need to have at least one individual designated with responsibility for maintaining the program.

Items subject to the EAR are any items not specifically controlled by the International Traffic in Arms Regulations (ITAR) of the US State Department or any other US Government agency.

Of these, certain items are specifically identified in the Commerce Control List (CCL), which is a section of the Export Administration Regulations, and are given an Export Control Classification Number (ECCN). Items not controlled in the CCL fall into the classification EAR99, no license required (NLR).

EAR99 is a category of items that are subject to the EAR but not listed within the Commerce Control List (CCL).

This term represents items that are not specifically controlled by the EAR (in the CCL) or identified with an Export Control Classification Number (ECCN). Even though they are not specifically controlled, attention must be given to restrictions on the country and/or end user to which an EAR99 item may be exported as additional prohibition may apply.

EAR99 is a category of items that are subject to the EAR but not listed within the Commerce Control List (CCL).

This term represents items that are not specifically controlled by the EAR (in the CCL) or identified with an Export Control Classification Number (ECCN). Even though they are not specifically controlled, attention must be given to restrictions on the country and/or end user to which an EAR99 item may be exported as additional prohibitions may apply.

Export approval under the EAR comes in the form of an export license. Determining what the export license requirements are under the EAR can be complicated.

It involves finding the specific classification within the Commerce Control List (CCL), determining whether a license may be required under those specifications, and then checking the CCL requirements against a country chart. But remember that the EAR also allows for some specific exceptions.

EAR99 refers to items subject to the EAR but not specifically controlled by an Export Control Classification Number (ECCN) on the Commerce Control List (CCL). NLR stands for “No License Required.” Most EAR99 items do not require a license, however, a license could be required based on end-use or the end-user. It is best to review the requirements for each item to properly determine if a license is required. EAR99 describes the product being exported, while NLR states that a license is not required.

The ECCN is the Export Control Classification Number, found in the Export Administration Regulations (EAR), section 738.2.

This code represents the classification of an item in the EAR Commerce Control List (CCL) which identifies the items that are controlled by the EAR. The five-digit alpha-numeric designation represents the Category (numeric), Product Group (alphabetic), and Type of Control (numeric). An example would be 9A991, identifying the Aerospace category (9), the End-Item product group (A), and the Anti-Terrorism / Crime Control / Regional Stability reason for control (991).

An ECCN is required whenever an item is controlled by the EAR/CCL and must be included in any export documentation, including in the online Automated Export System (AES). All products, technology, and software being exported need to have an ECCN assigned in order to determine if a license is required.

All products, technology, and software being exported need to have an ECCN assigned in order to determine if a license is required. An ECCN is also required when completing the Automated Export System (AES) online export information.

Also, when you have an EAR-controlled document, the ECCN number should be clearly identified on the cover page or other appropriate place, depending on the medium.

An ECCN is a five-digit alphnumeric code that identifies the classification of an item controlled by the Export Administration Regulations (EAR) and listed in the Commerce Control List (CCL).

The ECCN determines the level of control for an item, software, or technology. The ECCN, as well as the destination of the export, determines whether a license will be required. The HTS code represents the classification within the Harmonized Tariff System (HTS), which is required on import documentation. It is used in determining duties upon import into the United States. An HTS Code is typically comprised of ten digits.

An ECCN is normally provided by the manufacturer of an item. It can be self-determined by the company or, if assistance is needed, a request can be made to the Department of Commerce, Bureau of Industry and Security (BIS), for which you will obtain a CCATS (Commodity Classification Automated Tracking System) document.

A DDTC license is the export authorization from the US State Department for specific hardware items or technical data controlled by the International Traffic in Arms Regulations (ITAR), referred to as a defense article, to be exported to a specific country.

It can also be used for a foreign person employee (FPE) of a company, which represents the technical data that can be exported to that individual, based upon his country of origin. Nevertheless, don’t forget that the ITAR also includes certain exemptions that allow you to export defense articles without a license.

Registration with US State Department’s Directorate of Defense Trade Controls (DDTC) is made through an application to the DDTC and the payment of a small fee (as detailed in ITAR Part 122).

The registration form is the Statement of Registration, form DS-2032 which must be submitted in DECCS, DDTC’s online portal. Registration with DDTC must be renewed annually. Remember that registration is a prerequisite and does not authorize any export privileges.

Your company will need a DDTC registration if it is involved in the export or import of any ITAR-controlled items (as in the case of an exporter, broker, or freight forwarder) or if it manufactures any ITAR-controlled items that may be exported.

If the subsidiary is the only company involved in manufacturing or exporting the items, then that is sufficient. If other subsidiaries of the company are involved in exports of ITAR-controlled items, then the parent company or each separate subsidiary must also be registered.