Administered by the U.S. State Department, the International Traffic in Arms Regulations (ITAR) is a set of regulations which governs whether defense or military-related technologies may be exported or transferred to non-U.S. citizens. The purpose of the ITAR is to safeguard U.S. national security interests by ensuring that critical technology does not fall into the wrong hands. U.S. exporters have an important responsibility to adhere to the ITAR. Violations of the ITAR carry hefty civil and criminal penalties. Exporters can pay hundreds of thousands of dollars to millions in penalties, lose export privileges, and even be imprisoned.
Fortunately, there is a lot you can do to be proactive about your export compliance. To ensure compliance with the ITAR, the U.S. State Department’s Directorate of Defense Trade Controls strongly encourages registered exporters, manufacturers, brokers, and others engaged in defense trade to maintain compliance programs that assist in the monitoring and control of exports and other regulated activities. While having an export compliance plan is not a guarantee that an export violation will not occur, a coherent export compliance program can minimize the risk of non-compliance.
Diaz Trade Law ITAR-related services include:
- Developing an effective export compliance plan.
A key foundation of proactive and effective export compliance requires the development of an export compliance plan which establishes a set of procedures for your organization to ensure that everyone is on the same page about how standard processes work, who is responsible for what, how to identify violations, what to do when violations occur, etc. An export compliance plan helps build consciousness in your organization that compliance is critical – both to avoid costly penalties and also to protect national security. Diaz Trade Law helps exporters create export compliance manuals that help prove you have a process in place to classify your merchandise correctly, vet your customers and ensure you can prove you can take compliance seriously and implement all of the important great weight mitigating factors. Diaz Trade Law has significant experience in developing and enhancing export compliance plans for organizations. Additionally, Diaz Trade Law can assist your business in auditing and improving your current plan so that it is in its best shape.
- Export compliance training.
A foundation of a strong export compliance program is export compliance training. Training is important because it (1) ensures that all employees understand the export regulations and reinforces internal policies and procedures, (2) demonstrates to federal government agencies that your business is proactive about export compliance, and (3) avoids your business from being subject to costly penalties and even criminal liability. Fortunately, export compliance training can be highly tailored to meet your company’s needs. All of your training events include assessments for comprehension, certificates for successful participation, and ample opportunities for Q&A. For your next export compliance training event, trust Diaz Trade Law to provide highly-effective, engaging training.
- Export Transaction Vetting
Unsure whether a proposed export transaction violates the ITAR? Diaz Trade Law has significant experience vetting your potential transaction against U.S. export control laws. Through research and due diligence, Diaz Trade Law ensures that your transaction won’t get you in trouble later down the road.
- Voluntary Self-Disclosures
If your business believes it may have violated the ITAR, it can be in your business’ strategic interest to submit a voluntary self-disclosure (VSD). According to the Directorate of Defense Trade Controls (DDTC), ITAR violations should be disclosed promptly and VSDs can be a significant mitigating factor in DDTC’s analysis of such violations and is strongly recommended. DDTC encourages the submission of VSDs for common violations such as exporting without authorization, unauthorized access to technical data, failure to comply with license provisos, failure to maintain required records, failure to register or maintain registration, or misuse of the ITAR exemptions. Diaz Trade Law has significant experience filing VSDs and mitigating penalties.
- Requesting Authorization / Submitting License or Agreement Applications
Generally, any person or company who intends to export or to temporarily import a defense article, defense service, or technical data must obtain prior approval from DDTC. A license is required when a U.S. company seeks authorization for the permanent export, temporary export, or temporary import of a defense article, defense service, or technical data. Meanwhile, an agreement is generally required when a U.S. person provides a defense service to a foreign person, a U.S. person requires authorization to manufacture defense articles abroad, or a U.S. person seeks to establish a distribution point abroad for defense articles of U.S. origin for subsequent distribution to foreign persons. Diaz Trade Law has significant experience requesting authorization from DDTC on behalf of clients in the form of license applications and agreement requests.
- Mitigation and corrective action.
If your business has violated U.S. export control laws, there is a lot you can do to mitigate penalties and prevent future violations. Diaz Trade Law has significant experience representing businesses in dealing with the U.S. State Department’s Directorate of Defense Trade Controls. Specifically, Diaz Trade Law has successfully assisted clients in (1) submitting voluntary self-disclosures to mitigate penalties, (2) negotiated agreements with DDTC, and (3) built corrective action systems to help ensure that your business does not make the same violation again.
If you have questions about export compliance, reach out to us at firstname.lastname@example.org or call us at 305-456-3830. Want more information on export compliance? Check out our relevant blog posts and webinars:
- Introduction to Export Controls (Webinar)
- The Importance of Regular Export Compliance Training for your Business
- BIS Expands Export Restrictions Targeting China’s Largest Chipmaker
- Expanded Export Control Obligations when Exporting to China
- U.S.-Cuba Trade Under Trump vs. Biden
Want more information on ITAR compliance? Read more here.