ITAR, the International Traffic in Arms Regulations, might sound like something from a James Bond movie, but it applies to more than you might realize and as such, might be worth an assessment of what your company exports.
The Arms Export Control Act (the AECA) authorizes the U.S. President to control the import and the export of defense articles, and with power to designate those items which shall be considered as defense articles and promulgate regulations for the import and export of such articles. The President has delegated this responsibility to the State Department.
Pursuant to this authority, the State Department has promulgated the ITAR and included on it the U.S. Munitions List. The Munitions List is not a compendium of specific controlled items; instead, it is a series of categories describing the kinds of items that qualify as “defense articles” requiring export licenses. The Munitions List contains “attributes rather than names”, and for good reason. As a recent appellate court case explained it:
“[A]n effort to enumerate each item would be futile, not only because some are bound to be overlooked (imagine a regulation that tried to list all bicycles by manufacturer and model number) but also because manufacturers change their designations. The Mark 4 may be succeeded by a Mark 5, or the CQ/T model may become the CQ/X.”
Why is this important? A designated “defense article” may not be exported from the United States without a license from the State Department. The AECA criminalizes willful violations of this export license requirement. The AECA further provides that the designation of an item as a “defense article” made via “regulations issued under [the statute] … shall not be subject to judicial review.” For example, because the United States suspended munitions exports to China after the Tiananmen Square killings in 1989, the State Department will not grant a license to export defense articles to that country.
However, the statute does specifically identify “End-items, components, accessories, attachments, parts, firmware, software and systems” which are subject to ITAR. For example, “software” in the generic sense is defined to include “the system functional design, logic flow, algorithms, application programs, operating systems and support software for design, implementation, test, operation, diagnosis and repair.”
Many businesses may wonder whether their generic software is subject to ITAR. That is quite possible under the ITAR software subsection, which defines “defense article” software as: “equipment, cryptographic devices, software, and components specifically designed, developed, modified, adapted, or configured for military applications (including command, control and intelligence applications).” Exporters who develop and export such software should apply for a technical data license pursuant to the appropriate ITAR section.
Alternatively, a manufacturer unsure about whether a particular item is a “defense article” covered by the Munitions List may file a “commodity jurisdiction” (CJ) request with the State Department. The determination is made by the Directorate of Defense Trade Controls within the State Department, in consultation with the Departments of Defense and Commerce, as well as other government agencies and industry. These CJ determinations are never officially published in regulations or other government pronouncements and take 4-6 months.
As the complexity of these applications to seemingly benign products suggests, consider consulting with a lawyer about the ITAR before you export.
For more information please contact Gary Almeter at 410-583-2400 or firstname.lastname@example.org.