What is ITAR? What It Is, What It Is NOT and Resources for ITAR Registration
ITAR Registration – By Aimee Sukol, JD. MA, MS Ed., Meta Fab Outreach Specialist
Many businesses don’t begin operations with US Defense applications in mind; however, others find growth opportunities that place them in the defense supply chain. Whenever a business engages the international supply chain, it must take into consideration federal rules that regulate trade. To avoid penalties, ITAR registration shows that companies fundamentally understand their product/service and end-use customer. This simple premise can guide growing manufacturers (or service providers) who pursue opportunities involving defense, exports, imports or related projects. In short, it doesn’t matter if you are a metal fabrication or steel manufacturer that produces thousands of parts – if even only 10 of those items are intended for a military tank, weapon or defense software, you must be ITAR registered.
A customer may want those in its supply chain to complete ITAR registration as a general practice even if the government doesn’t require it. Therefore, smaller companies should conduct a cost/benefit analysis to determine the relative value of these contracts with the cost of training and ITAR registration. Long term relationships and opportunities present compelling reasons to satisfy a customer’s requirements, but the process is an investment.
In the following, this article will explore basic terminology, provide a summary of how these terms are used, and offer resources for local ITAR training and assistance.
ITAR: International Traffic In Arms Regulation (administered by DDTC)
EAR: Export Administration Regulations (administered by BIS at DoC)
USML: United States Munitions List (ITAR list of “Defense Articles)
SME: Significant Military Equipment
MLA: Manufacturing License Agreement
BIS: Bureau of Industry and Security
DoC: Department of Commerce
CCL: Commerce Control List (EAR list of regulated items, equivalent to USML)
ECCN: Export Control Classification Number
DDTC: Directorate of Defense Trade Controls (ITAR registration & CJ determinations)
TAA: Technical Assistance Agreement
EMS: Export Management System
AECA: Arms Export Control Act
AECA Debarred List: Maintained by State Department
Denied Persons List, Unverified List, and Entity List: Maintained by the DoC
Specifically Designated Nationals List: Maintained by the Treasury Dept
MTCR: Military Technology Control Regime
Dual Use: Items capable for either civilian or military purposes
Defense Article: An item (products/services) regulated by ITAR
Consolidated Screening List: Maintained by the US government that includes lists of the regulated bodies below. Note that the Consolidated List may not reflect the most updated information.
600 Series and 500 Series: items more strictly controlled than others on the CCL, but less strictly controlled than items on the USML.
CJ: Commodity Jurisdiction
DS-4076: The form a company completes and submits to the DDTC to determine which jurisdiction covers its product/service (ITAR or EAR).
DS-2032: ITAR registration form.
DSP-5: Export licenses for ITAR controlled articles.
End-Use Controls: Prohibit exports to certain countries
State Department maintains an AECA Debarred List
Commerce Department maintains a Denied Persons List, Unverified List and Entity List
Treasury Department maintains a Specifically Designated Nationals List
The above prohibit exports to specific countries. You can review the Consolidated Screening List, but it may not reflect the most updated information. Companies are held responsible for obtaining updated information.
ITAR (International Traffic In Arms Regulation) regulates defense products, technical data, and services. Under federal rule 22 CFR §122.1, anyone who manufactures, exports, or imports defense products or services is required to register with the Directorate of Defense Trade Controls (DDTC) in the State Department. It doesn’t matter if you don’t export or import, nor does it matter if you only produce one small item that is applied to defense, if your company produces anything (or provides a service, such as freight forwarding) intended for a military purpose, you must register.
Registration is accomplished by completing a statement of registration (DS-2032). Once registration is complete, the organization will receive a registrant code. Registrations are valid for 12 months from the date of issuance. Registration states that an organization is acknowledging and attesting that it is aware of what ITAR requires of them and they are in compliance with these requirements.
ITAR is administered by the DDTC at the State Department and the most controlled items are SME’s (Significant Military Equipment). As noted below, services (TAA) can be regulated by ITAR so if your business provides technical assistance or teaches others to repair an SME, then you must be ITAR registered. Arrangements that call for a foreign company to manufacture an SME also require an MLA (Manufacturing License Agreement).
What is a Defense Article?
There are 21 categories covered on the USML (US Munitions List), which include, but not limited to companies that produce components, parts, software, or services used in defense application. Examples include:
- IT, software, data security
- Federal contractors involved in defense, intelligence, security or energy
- Subcontractors and associates in the supply chain that produce parts, components, accessories, and attachments
ITAR vs. EAR (Export Administration Regulations)
ITAR is more stringent than EAR because ITAR covers articles that have DIRECT defense-related applications. EAR refers to other items that may not be on the USML but CAN be applied to civilian or military use, also known as “dual use”. As noted, ITAR is administered by the DDTC and EAR is administered by the BIS at the DoC. The CCL specifically covers (for example) chemical & biological weapons, missile technology or crime control products. The level of control depends on where the product is exported, destination party, end use and the Export Control Classification Number (ECCN). 600 and 500 Series items fall under EAR, and while more strictly controlled on the CCL, these items will not be found on the USML.
Steps for ITAR Registration:
- Get help! A company can conceivably review the USML or CCL to see if its product or service falls under ITAR or EAR regulation by submitting a DS-4076. However, DDTC rules cautiously and may determine a company is regulated under ITAR when it could justifiably be covered by EAR. Seeking the assistance of an export control expert can prevent a company from being classified by more stringent ITAR regulations.
- For exports, set up an EMS (Export Management System) relevant to the amount of foreign revenue. It is important to classify and track all ITAR and EAR controlled articles and the date.
- Renewed annually from the date of registration, the cost to register under ITAR begins at $2,250.
Note: There is no such thing as “ITAR certification”. Companies SHOULD obtain ITAR training to better understand and articulate rules and responsibilities to employees through the assistance of an attorney or consultant, but ITAR certification doesn’t exist. ITAR is a matter of registration.
- BIS provides ITAR training around the country. The next Portland-based training is SEPTEMBER 10-11TH. The cost to register for ITAR training is $530. To learn more visit: https://www.bis.doc.gov/index.php/compliance-a-training/current-seminar-schedule.
- Pacific NW Defense Coalition provides 1:1 assistance and training on exporting, importing, trade and related regulations including ITAR: pndc.us.
- Federal Publication Seminars, listing available training: https://www.fedpubseminars.com/Training/International-Contracting/?AspxAutoDetectCookieSupport=1
- Oregon Manufacturing Extension Partnership provides trade and ITAR training: omep.org
- Also, see your local economic development agency (City or State) to see if you qualify for financial assistance that covers training.
In Conclusion, ITAR registration itself may not be as complicated as understanding whether a company must register. Following registration, a company must track products, customers, uses, destinations, and revenue derived from contracts covered by ITAR and EAR rules. Consequently, cost-benefit analysis of contracts that require ITAR registration is necessary.
Consequently, companies that are ready to register under ITAR should seek assistance to understand the process, costs, and rules. Additionally, local business associations (examples listed above) and economic development agencies can provide affordable training and assistance. Operating a business can be overwhelming enough, so rather than become your own import/export/defense expert, seek help from those who specialize in these areas.
Bureau of Industry & Security:
Directorate of Defense:
Thomas McVey, Williams Mullen: “Is My Company Required to Register Under ITAR?”: