Category Archives: ITAR and Defense Exports

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Read the Directions Carefully Before Playing: State Department Releases Military Drone Export Guidance

The United States has a responsibility, or so the State Department tells us, to ensure the sales and exports of Unmanned Aerial Systems (UAS) are consistent with U.S. national security interests, U.S. policy, and even U.S. values. While the government would be glad to keep the export of military drones in lock-step with our policy … Continue Reading

Military Electronics Export Reform: Let the Chips Fall Where They May

Every time there is a new round of reforms under the President’s Export Control Reform initiative, we hear the same advice: Controls on certain items are eliminated or reduced (which creates new opportunities for manufacturers and exporters); but The new rules bring new complexities, so be careful. Attorneys in the export control space correspondingly inundate … Continue Reading

ECR Episode XI: Rewriting the Guide to the Galaxy – Satellites Passed to Commerce Control

Glancing through the fictional but fascinating Hitchhiker’s Guide to the Galaxy (Rsch. Ford Prefect; Pub. Megadodo Publications), one might recognize that the assertions therein are a bit confusing. Similarly, one might become confused when reviewing another, less whimsical, guide to the galaxy: the revised United States Munitions List Category XV – Spacecraft and Related Articles. … Continue Reading

ECR Episode IX – Serving up the Third Round: The Next Wave of Export Control Reform Takes Effect on July 1, 2014

In the country pubs of Ireland, it has long been the practice of the barkeep to “stand the third round” for good customers, meaning to offer the third drink for free.  The practice makes sense both as customer appreciation and as an inducement for those fine customers to continue their revelries right where they are.  … Continue Reading

Russian Against Time: New Sanctions and Lowered Expectations as Ukraine Crisis Continues

There’s no end in sight for the turmoil in Ukraine. And there’s no end in sight for international sanctions against Russia for causing that turmoil. As sanctions escalate, so will the collateral damage. New sanctions announced on April 28, 2014 will not only affect Russia and Ukraine, but will affect U.S. business too. But while … Continue Reading

Starving the Bear: The United States Restricts Exports to Russia

The pressure on Russia continues to build.  As we previously reported here and here, throughout March, the United States and other Western powers implemented a series of sanctions against individuals and entities deemed to be involved in the political destabilization of Ukraine.  Those sanctions were restricted to specific parties, including high ranking Russian and Ukrainian … Continue Reading

Spacing Out: BIS Issues Report on Export Controls and the Space Industrial Base

In February 2014, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) published a report (“Report”) detailing the impact of export controls on the U.S. space industry.  Titled the “U.S. Space Industry ‘Deep Dive’ Assessment,” the Report addresses how U.S. export controls affect the space industrial supply chain.… Continue Reading

Just the TTIP: A Review of the Transatlantic Partnership Agreement One Year After It Is Introduced to America

Next week will mark one year since President Obama introduced the Transatlantic Trade and Investment Partnership (TTIP) to the nation in his State of the Union Address.  Although the TTIP received only a brief nod in the President’s speech, the TTIP initiative has moved forward at a stunning pace . . . well, a stunning … Continue Reading

Fixing a Broken Brokering Definition: DDTC Eases ITAR’s Regulatory Burden for Brokers and Brokering Activities

By: Matthew Riemer On August 26, 2013, in yet another move geared toward streamlining the U.S. export control regulatory landscape, the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) published its long-awaited interim final rule on arms brokers and brokering activities.  The revamped International Traffic in Arms Regulation (ITAR) Part 129 directly addresses industry concerns regarding the scope and applicability of the current brokering requirements.  Although the rule comes nearly two years after the most recent proposed brokering rule, the new rule significantly narrows the universe of persons and activities that are subject to the ITAR’s brokering regulations.… Continue Reading

Export Control Reform Series Episode III: Harmonizing EAR Exceptions and ITAR Exemptions

By: Fatima Merchant Background In Episode 1 and Episode 2 of this series, we discussed some key points of U.S. Export Control Reform and took you through a step-by-step reclassification analysis of parts and components transitioning from the USML to the EAR.  After determining that the items you export will move from the USML to the CCL, you will need to evaluate your licensing requirements.… Continue Reading

Export Control Reform Series Episode IV: The New Definition of “Specially Designed”

By J. Scott Maberry In Episode I, “The Basics,” we showed you some of the basics of the President’s new export control reform initiative. In Episode II, we helped you understand how to make sense of the impending changes in U.S. Munitions List Category VIII aircraft parts. In Episode III, we took you thorough the critically important license exemptions and exceptions. And now, just as in the Star Wars epic, we come to the best part: Episode IV: the new definition of “specially designed.” … Continue Reading

Export Control Reform Series Episode I: The Basics – Five Points to Remember about Export Control Reform

By: Reid Whitten The first major wave of the much-discussed U.S. Export Control Reform measures will break on October 15, 2013 as the first round of rule changes take effect.  While many in the affected industries expect that the October changes will be a welcome relief from certain burdensome regulations, many are concerned, confused, and … Continue Reading

Export Control Reform Series Episode II: The First Change – Reevaluating your ITAR Aircraft Parts

By: Reid Whitten In Episode I: The Basics we noted that U.S. Export Control Reform may be causing confusion and consternation among those who will have to take the first theoretical rule changes and apply them in real and practical situations.  Among the first test subjects are those who oversee ITAR compliance for manufacturers and exporters of aircraft and aircraft parts.  While these brave souls will be the front line of the ECR implementers, those in the ranks behind (looking at you, Military Vehicles and Naval Vessels) will do well to learn from their experience.… Continue Reading

State Department Issues Nuts and Bolts Guidance on Libya

By: Thad McBride On May 10, 2013, the U.S. State Department issued unusually practical guidance (the Guidance) on exporting to Libya.  The Guidance, which even has a practical name – “Direct Commercial Sales of Defense Articles and Services to Libya” – is available here. For many years, the United States has imposed extensive restrictions on exports of defense articles to Libya.  Since February 2011, unilateral U.S. restrictions on such exports have been buttressed by an arms embargo imposed on the country by the United Nations.  Under part 126 of the U.S. International Traffic in Arms Regulations (ITAR), UN arms embargoes essentially have direct effect under U.S. law.  With respect to Libya, this means that section 126.1(k) of the ITAR tracks the restrictions that the United Nations has imposed on Libya.… Continue Reading

$8 Million Penalty for Weak ITAR Compliance: How the Price of Maintenance Beats the Cost of Repair

By: Reid Whitten On April, 30, 2013, Raytheon Company, a major military electronics and weapons manufacturer, agreed with the U.S. Department of State to pay $8 million in civil penalties and remedial expenditures to settle alleged violations of the International Traffic in Arms Regulations (ITAR).  The size of the penalty catches the eye, but beyond the whopping number is a sizeable lesson to be drawn from such enforcement actions: when a company forgoes the expense of maintaining its ITAR compliance system, it risks paying a much greater price if a breakdown occurs.… Continue Reading

New “Beast” Rules Lessen the Export Control Burden

By: Scott Maberry, Curtis Dombek, and Cheryl Palmeri On April 16, 2013, the U.S. Departments of State and Commerce published the first in a series of final rules, amending the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR) in accordance with President Obama’s 2009 Export Control Reform (ECR) initiative.[1] This is a significant milestone in export reform.  The ECR aims to focus U.S. government efforts on controlling the export of sensitive technologies while streamlining exports of defense-related items to U.S. allies and partners around the world. … Continue Reading

Streamlining the System: More Baby Steps Toward Reducing Export Compliance Burdens

By: Scott Maberry and Reid Whitten Since 2011, President Barack Obama’s administration has actively pursued export control reform designed to reduce the regulatory burdens on U.S. companies and enhance U.S. national security (as reported here).  On March 7, 2013, the Administration notified Congress of the first in a series of amendments to the U.S. Munitions List.  The next day, March 8, 2013, the White House released Executive Order 13637 to update delegations of presidential authority over the administration of export and import controls.  Also on March 8, the White House issued a fact sheet on the implementation of export control reform.  These steps, though small, mark clear progress in the President’s Export Reform Initiative.… Continue Reading

A “Deep Dive” into Space and Export Controls

By: Mark Jensen For the last nine months, the U.S. Department of Commerce, Bureau of Industry and Security (BIS) has been collaborating with NASA, the U.S. Air Force, and the National Reconnaissance Office on a “Deep Dive” survey and assessment of the U.S. space industrial base supply chain network.  The survey was originally distributed to 9,150 companies and other organizations.  Through January 2013, the government had received more than 2,000 responses, which yield a great deal of data about the space industry in the United States. … Continue Reading

ITAR End-Use Investigations Reveal Compliance Priorities

By: Mark Jensen As many exporters know, the U.S. government conducts investigations under the so-called “Blue Lantern” program to monitor end-use compliance in defense trade exports. On October 23, 2012, the U.S. Department of State, Directorate of Defense Trade Controls (“DDTC”) updated its Fiscal Year 2009 Blue Lantern report (titled “End-Use Monitoring report for Defense Articles and Defense Services”), describing actions it took to implement the “Blue Lantern” end-use monitoring program in 2009.  While the data contained in the 2009 report are somewhat dated, the fiscal year 2010 and 2011 reports are also available. Together, the reports provide important reminders about monitoring compliance under the International Traffic in Arms Regulations (“ITAR”) for any company dealing with military related exports.… Continue Reading

All Together Now: A New Joint Definition of “Specially Designed”

By: Curt Dombek and Mark Jensen On June 19, The U.S. Department of State, Directorate of Defense Trade Controls (DDTC) and U.S. Department of Commerce, Bureau of Industry and Security (BIS) proposed a joint, largely standardized definition of "specially designed" that would apply to items on both the Commerce Control List (CCL) and U.S. Munitions List (USML).  The definition represents a major step in the functional merger of the two lists.  Once implemented, it should ease the administrative burden of U.S. export compliance on companies whose work touches both areas and clarify the status of a large number of items.  One thing it will not do (and which may never be done) is remove ambiguity from the lists altogether.… Continue Reading

Proposed Easing of Satellite Export Controls Could Benefit U.S. Satellite Industry

By: Curt Dombek, Brian Weimer, Dan Brooks, and Reid Whitten Since 1999, strict controls on the export of U.S. satellites and satellite components have drastically eroded U.S. manufacturers’ market share in the global satellite industry.  On April 18, 2012, the U.S. Departments of State and Defense released the “1248 Report” containing findings related to reducing some of those controls.  The 1248 Report assesses the national security risks of removing certain satellites and related components from the tightly controlled United States Munitions List (USML) and transferring them to the generally less restrictive Commerce Control List (CCL).  The report concludes that most communications satellites, lower-performing remote sensing satellites, and related components could be transferred from the USML to the CCL without harming U.S. national security.  The transfer of these items to the CCL could greatly benefit the U.S. satellite industry by significantly easing the export controls placed on its products.… Continue Reading

On The List, Off The Menu: How 5 Major ITAR Shippers Disappeared

By: Reid Whitten and Scott Maberry How did five of the most prominent freight forwarders shipping goods subject to the International Traffic in Arms Regulations (ITAR), suddenly become ineligible as carriers for ITAR exporters? The answer begins with a Sherman Antitrust action by the U.S. Department of Justice and ends, for the moment, with a major gap in logistics, supply chain, and transport for companies manufacturing, trading, or exporting ITAR-controlled products.… Continue Reading
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