What is ITAR?

Bullets

The United States government directs the U.S. defense technology through the Arms Export Control Act (AECA). ITAR, which stands for International Traffic in Arms Regulations, implements the AECA to oversee the international transfer of arms.

    • The ITAR is maintained by the U.S. Department of State as a part of the Code of Federal Regulations- Title 22, which deals with foreign relations.
    • These regulations control the export and distribution of goods and services pertaining to defense and military, as well as intelligence services.
    • The ITAR are applicable to all companies in the U.S. that are involved in export of defense or military products and services listed under the United States Munitions List (USML).
    • All commodities identified by the USML are called defense articles.

Commodities Listed Under USML

Apart from products that are clearly identified as weapons, USML subjects all modified products to the ITAR.

      • Electronic devices such as infrared arrays and lasers exclusively modified for defense application will be listed under USML.
      • All communication satellites used for research purposes and military spacecrafts will also be found listed under USML.

All items or commodities in the USML require licensing by the U.S. State Department’s Directorate of Defense Trade Controls (DDTC) before they can be exported from the U.S.

The term ‘export’ in ITAR not only refers to transferring or transporting a defense article outside the U.S., but it also indicates visual or oral disclosure, or transfer of any technical data to a foreign person inside or outside the U.S.

Export Administration Regulations (EAR)

The mission of the Department of State Directorate of Defense Trade Controls (DDTC) is to preserve U.S. national security and foreign policies. In addition to the ITAR, the Export Administration Regulations (EAR) also controls exports.

      • The EAR is issued by the United States Department of Commerce, Bureau of Industry & Security (BIS).
      • Just as the ITAR has a control over USML, EAR controls the Commerce Control List (CCL).
      • The CCL covers all items, with both, commercial and defense applications.
      • A major difference between ITAR and EAR is the ‘de minimis’ rule for re-export control. It indicates the minimum amount of U.S. content a foreign item should contain, in order to be re-exported.
      • As per the rule, EAR does not allow re-export of any foreign origin item that has U.S. content of less than 25 percent, whereas ITAR does not require enforcing the ‘de minimis’ rule.

ITAR Compliance and Violation

The U.S. government requires all exporters, manufacturers and service providers of defense articles in the U.S. to be compliant with the ITAR. In order to be compliant with ITAR, a company should be registered with DDTC and self-certified.

In case of ITAR violations, severe penalties can be imposed.

      • Exports and shipments without the authorization of the U.S. Department of State incur civil penalties worth $500,000 per violation.
      • Criminal penalty for ITAR violation is $1,000,000.
      • Depending on the seriousness of criminal violations, up to one year of imprisonment can be imposed.

ITAR has been subjected to several amendments to further strengthen the U.S. national security. But today, due to rapid globalization and the highly competitive nature of the U.S defense industry internationally, the U.S government is addressing issues related to the need for reforming ITAR.