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IAQG Workshop: Washington DC General Assembly. Surviving US Export Control regulations: The ITAR and EAR. Don Buehler - SAE April 16, 2010. Topics we will cover:. Why should aerospace companies care? How does the US government control exports? How are companies affected by these laws?.
Washington DC General Assembly
Don Buehler - SAE
April 16, 2010
DHL Owned by: Deutsche Post World Net / Deutsche Post DHL – a German company
This was the largest fine in history for a freight forwarder.
Their violations: primarily record keeping (Aug 2009)
Three affiliates (in India & the UK) committed 33 violations – re-exporting restricted items without a license and exporting to embargoed countries and to debarred companies
3. Quoptiq fined $25 Million
A Luxembourg LLC
163 violations of the ITAR
Exported night vision technology without proper licenses to various European and Asian companies
Violation: Gun SightsEXAMPLES:
Between June 1999 and January 2004, Bass Pro, Inc. exported gun sights to a variety of destinations without a license in violation of the EAR.
Gun sights are controlled pursuant to U.S. treaty obligations, as well as for human rights and anti-terrorism reasons.
Bass Pro agreed to pay an administrative penalty of $510,000.
Does your company understand the US laws and regulations?
Is your company vulnerable to violations?
The purpose of this presentation is to raise your awareness of the laws and regulations which may be affecting your company right now – and to give you some basic information on the regulations.The question:
- The International Traffic in Arms Regulations (22 CFR Chapter I, Subchapter M) - ITAR
- The Export Administration Regulations (15 CFR Part 700 – 799) - EARThe BASICS
The ITAR controls defense articles and defense services which are listed on the United States Munitions List (USML) (Part 121)The BASICS - ITAR
If the item you are exporting
has been designed for a military
is listed on the USML
you will have to get a license for the export
(unless there is an exemption)
The EAR controls commercial and “dual use” (commercial and military use) items and technology which are listed in the Commerce Commodity List (part 774)The BASICS - EAR
Extensive system for classification of products – Export Control Classification Numbers (ECCNs)
Complex rules about what requires a license (depends on product, technology and end use)The Commerce Control List (CCL)Part 774 of the EAR
If you are going to export items under the EAR, knowing the ECCN is critical.Export Control Classification Numbers(ECCNs)
Aircraft and gas turbine engines not controlled by 9A001 or 9A101
Complete canopies, harnesses and electronic release mechanisms
Any item sent from the United States to a foreign destination (company or person) is an export. All items leaving the United States are exports and, therefore, may be subject to controls and restrictions.
Items include hardware(parts, materials, sub assemblies), information (drawings, specifications, test data, calculations) software and technologies (e.g., composites).
We use “item” to refer to all three categories (hardware, information or technologies).
physical (sending items to a foreign country or person)
verbal (telling someone information about a controlled item)
visual (a non U.S. person sees controlled items – even if they see them on your laptop in a public place)
How can items be exported?
The shipment or transmission of restricted items subject to the ITAR or EAR from one U.S. person to another U.S. person is not an export. (As long as the “receiving person” is not employed by a foreign company.)
The shipment or transmission of restricted items subject to the ITAR or EAR from a U.S. Person (company) to a Foreign Person (company).
The shipment or transmission of items subject to the ITAR or EAR from one Foreign Person (company) to another.
The shipment or transmission of restricted items subject to the ITAR or EAR from one Foreign Person (company) to another Foreign Person (company) within the same country.
Company B (Germany)
The shipment or transmission of restricted items subject to the ITAR or EAR from a U.S. Person (individual) to a Foreign Person (individual).
(or green card holder)
If the item in any of the previous examples is restricted by the ITAR or the EAR, a license may be required for the transaction.
Granting (or denying) licenses for the export, re-export, or re-transfer of restricted items is the first way that the laws control exports.
The second major way that the US government controls exports is through lists of countries, companies, and individual citizens who are not allowed to engage in exports of US items.
We refer to these as “denied parties”
Numerous Governmental agencies have “denied parties” lists. The major lists are maintained by DDTC; BIS and OFAC (Office of Foreign Assets Controls)
OFAC is the office in the Treasury Department which maintains a variety of lists including embargoed countries.
A 5 person company – East Ways Shipping (a NY based freight forwarder) was fined $70,000 by the BIS for the shipment of 3 orders of scrap metal to a company listed on one of BIS’s entity lists.
Do some research into the regulations
Find out your vulnerability to violations
Evaluate Your current work
Is it covered by one of the US regulations?
Do we export these items in any way?
Discover your vulnerabilities to violations
Develop and Implement a Compliance System
Market Your System
Send your questions to Don Buehler email@example.com I will be glad to address them.
Or call me at
513-662-5190 (US office)
Or 513-305-7493 (mobile)
The IAQG workshop on
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