ITAR Lawyers for Import/Export Investigations, ITAR Audits & Compliance
Importers and exporters conducting international trade across U.S. borders face a host of compliance obligations and law enforcement risks. Our ITAR lawyers assist domestic and foreign companies with all federal import/export matters, including ITAR audits.
The federal government imposes strict laws when it comes to the export of defense-related products or technical data in hopes of keeping technology and information out of the wrong hands. The International Traffic in Arms Regulations (ITAR) is the name given to the regulatory framework. While the end goal of ITAR is understandable, the burden ITAR places on the businesses that are subject to the regulations cannot be overstated.
For domestic and foreign companies engaged in international trade across U.S. borders, federal compliance needs to be a top priority. U.S. Customs and Border Protection (CBP) and other federal agencies strictly enforce the nation’s import and export control laws, and importers and exporters face a host of compliance obligations – and law enforcement risks – under other federal statutes as well.
For importers and exporters, non-compliance can lead to administrative, civil, and criminal penalties. In order to avoid these penalties, importers and exporters need to make compliance a top priority, and they need to engage experienced defense counsel (i.e. ITAR lawyer) at the first sign of a federal audit or investigation.
A Team of ITAR Compliance and Defense Lawyers and Former Federal Agents Handling Import/Export Matters Nationwide
At Oberheiden, P.C., our federal compliance and ITAR lawyers represent U.S.-based and foreign companies in all import and export-related matters. If you are unsure whether your company needs to comply with ITAR, is ITAR compliant, or is facing a federal investigation for an ITAR violation, or whether you have questions about U.S. federal customs and import trade regulations or you need help dealing with CBP or the Office of Foreign Assets Control (OFAC) in relation to a restricted foreign party, our lawyers can help you understand your company’s options and obligations. If your company or one of your trade partners is the subject of an ongoing federal investigation, we can provide defense representation focused on preventing charges from being filed.
In addition to our federal compliance and defense lawyers, many of whom are former federal prosecutors, our team also includes former high-ranking agents with the Federal Bureau of Investigation (FBI) and other federal law enforcement agencies. When advising our clients regarding import and export matters, we rely on our attorneys’ and former agents’ extensive federal experience to offer deep insights, custom-tailored strategies, and practical solutions designed to avoid federal scrutiny. Given our experience and broad knowledge base, we effectively provide organizations with practical insight, custom-tailored strategies, and efficient solutions to even the most complex regulatory issues.
What Does ITAR Cover?
ITAR is a complex regulatory framework affecting businesses that manufacture, sell, or export “defense articles, defense services, or related technical data.” ITAR’s power originates from the Arms Export Control Act (AECA) in conjunction with Executive Order 13637. Under the AECA, Congress “authorizes the President to control the export and import of defense articles and defense services.” Executive Order 13637 passes that power on to the Secretary of State.
ITAR is primarily concerned with items contained on the United States Munitions List (USML). The USML is comprehensive, and lists hundreds of items in thirteen categories:
- Firearms and related articles;
- Guns and armament;
- Ammunition and Ordnance;
- Launch vehicles, guided missiles, ballistic missiles, rockets, torpedoes, bombs, and mines;
- Explosives and energetic materials, propellants, incendiary agents, and their constituents;
- Surface vessels of war and special naval equipment
- Ground vehicles;
- Aircraft and related articles;
- Military training equipment and training;
- Personal protective equipment;
- Military electronics;
- Fire control, laser, imaging, and guidance equipment; and
- Materials and miscellaneous articles.
Notably, the items covered by ITAR constantly change, making it challenging for some organizations to understand their compliance requirements.
Adding to the confusion, ITAR imposes regulatory burdens not only on those who deal in these physical goods, but also on organizations who handle related “technical data.” Under C.F.R. 120.10, technical data consists of information that “is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles.” Examples include, but are not limited to, blueprints, photographs, drawings, instructions, documentation, and plans.
ITAR requires any U.S. person, including corporations, businesses, organizations, or groups that are incorporated in the United States under U.S. law, to obtain authorization from the U.S. Department of State before they can export any item on the USML list to a “foreign person.” Not only that, but any company that manufactures an item on the USML, regardless of any intent to export, must register with the Directorate of Defense Trade Controls.
ITAR also covers the re-export of covered items, meaning that a U.S. organization that exports an item on the USML list to a foreign person cannot turn a blind eye to what happens with the item once it leaves its hands. The U.S.-based organization must obtain authorization for the party it intends to transfer the item to, as well as authorization for the third-party transferee.
In all, ITAR imposes incredibly complex burdens on U.S.-based businesses that deal in the items contained on the USML. At Oberheiden, P.C., our team of knowledgeable ITAR compliance attorneys work closely with our organizational clients to ensure they are aware of their compliance requirements. We will then clearly identify all necessary steps to become ITAR compliant.
Step One: Determine if a Business Needs to Comply with ITAR?
The federal government controls all exports. In general, the export of most non-military goods is covered by the Export Administrative Regulations (EAR). The Bureau of Industry and Security enforces the EAR. These regulations, while strict, do not impose the burdens that ITAR does. Thus, whenever possible, most businesses would prefer to be bound by the EAR. While the EAR are broad, they do not apply to defense articles and defense services on the U.S. Munitions List. These items fall within ITAR.
A few of the organizations that must ensure ITAR compliance include:
- Companies dealing directly in defense articles and services;
- Manufacturers producing defense articles and services (even the business does not intend to export);
- Those who connect buyers and sellers, such as brokers or agents;
- Those collaborating with non-U.S. persons and companies; and
- Those dealing with all other goods, services, technology, or information that falls outside the EAR or that has a specific military application.
At Oberheiden, P.C., when we meet with a business client, we first identify whether the business’ dealings allow compliance only with the EAR. If so, our client no longer needs to worry about ITAR compliance, and avoiding the burdensome ITAR requirements. Of course, we will then work with our client to ensure total EAR compliance.
Step Two: Review the ITAR to Determine Registration and Compliance Requirements
If a business is subject to ITAR, the next step is to review ITAR to determine its compliance requirements. Like many federal regulatory schemes, ITAR is not a model of clarity; much of the language contained in the relevant statutes is vague and open to interpretation. This can create a challenging environment for businesses that, on the one hand, do not wish to subject themselves to unnecessary federal scrutiny, but on the other, cannot risk non-compliance.
Step Three: Register with the Directorate of Defense Trade Control
Once a business determines that it is subject to ITAR, the next step is to register with the Directorate of Defense Trade Control (DDTC). The registration requirements are outlined in C.F.R. 122, and include,
- Submitting a registration statement signed by a senior officer;
- Paying a registration fee;
- Keeping the DDTC updated regarding any criminal charges brought against the registrant, certain changes to the registrant’s corporate structure, or any other subsequent ineligibility to export defense articles; and
- Maintaining records pertaining to “the manufacture, acquisition and disposition” of defense articles, technical data, defense services, or whatever conduct resulted in the need for ITAR compliance.
Once an organization submits its registration pack, the DDTC typically issues a response within 45 days. However, because the registration requirement arises annually, organizations are advised to begin the process of recertification at least 60 days before the expiration of their current registration.
Step Four: Identify the End User of the Covered Items
One of the most burdensome aspects of ITAR compliance is the requirement that businesses are responsible for identifying and obtaining authorization not only for the party to whom the business is directly providing the items, but also to any third-party transferees that may end up with the items. Because of this, covered organizations cannot take a laissez-faire approach to where their goods, services, technology, or information ends up.
One of the most obvious problems arises when a business intends on exporting to a prohibited country. This list changes based on the current political climate, but currently includes the following countries:
- Central African Republic,
- Cote d’Ivoire,
- Democratic Republic of the Congo,
- North Korea,
- Republic of the Sudan (Northern Sudan),
- Sri Lanka,
- Yemen, and
In addition, there are certain ineligible parties that are not necessarily located within a prohibited country. Manufacturers of defense articles and exporters dealing in defense articles must take a proactive approach to locating the end-user, as well as the end-use of their products, services, technology, or information.
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Last Updated: 2021-07-09
The Importance of an ITAR Compliance Program
Given the immense burdens ITAR imposes, and the high-stakes of ITAR non-compliance, businesses should develop a comprehensive ITAR compliance program to ensure they are meeting their duties. Under ITAR, accidental non-compliance is taken just as seriously as an intentional violation. The DDTC acknowledges the challenges imposed by ITAR, and strongly suggests businesses create a compliance program. According to the DDTC:
In designing a compliance program, you need to understand how your business works to determine your risk areas. Possessing defense articles or technical data raises your risk of an inadvertent violation. Many companies that don’t engage in manufacturing, exporting, or brokering, still maintain compliance programs to reduce the risk of such violations.
- Clearly written,
- Easily accessible to the necessary parties,
- Custom-tailored to the specific needs of the business,
- Regularly reviewed and updated, and
- Understood and supported by the management team.
When it comes to the creation of the document itself, every organization’s compliance program will be different. However, the program should cover the following:
- Compliance training,
- Compliance security screening,
- How the organization addresses its recordkeeping requirements,
- All internal and external monitoring efforts, and
- How the organization addresses compliance issues, should they arise.
Of course, these are very broad categories that must be expanded upon. However, this serves as a starting point for businesses considering an ITAR compliance program. At Oberheiden, P.C., we work closely with businesses to develop comprehensive ITAR compliance programs that are custom-tailored to their unique needs. Our team includes former federal prosecutors and former top-ranking federal law enforcement agents who have advanced knowledge of ITAR’s complex regulatory framework. With our help, you can rest assured that your business has a compliance program in place to protect against unnecessary—and unwanted—scrutiny from federal law enforcement agencies.
Penalties for Failing to Comply with ITAR
As with many federal regulations, companies that fail to meet their compliance requirements can face both civil and criminal liability. Specifically, an ITAR violation can result in civil fines as high as $500,000 per violation and criminal liability, including fines of up to $1 million and a maximum of 10 years imprisonment, per violation. However, if the violation involves a false statement or intentional omission of a material fact, the possible criminal penalties increase to a maximum of 20 years imprisonment. Needless to say, businesses need to take ITAR compliance seriously.
Our Import and Export ITAR Compliance Services
On the compliance side, we counsel companies of all sizes with all types of import and export operations. Whether you are just getting into the business and need help building a compliance program from the ground up, or you need legal counsel to reevaluate and improve your company’s existing compliance efforts, we can offer a solution to meet your needs.
U.S. Federal Import Compliance
With regard to federal import compliance, we offer representation for the development of internal policies and controls, auditing of current compliance efforts, evaluation of specific shipments and transactions, and adoption of new controls based on CBP rulings and other federal guidance. We offer these services with regard to matters including, but not limited to:
- CBP Ruling Compliance
- Customs Compliance and Training
- Customs-Trade Partnership Against Terrorism (C-TPAT) Certification
- Due Diligence Regarding Foreign Suppliers, Brokers and Other Third Parties
- Duty Reduction Programs, Reconciliation Programs, Protests, and Exemptions
- Exclusion Requests (Including Requests Under Section 232 and Section 301)
- Harmonized Tariff Schedule (HTS) Classification Compliance
- Importer of Record (IOR) Agreements
- Importer Self-Assessment (ISA) Programs
- Internal Audits and Investigations
- NAFTA (USMCA) and Other Free Trade Agreement Compliance
- OFAC General and Specific Licenses
- Prior Disclosures
- Software Licensing, Technology Transfers, and Other Special Compliance Issues
- Tariff Exclusion Requests
U.S. Federal Export Compliance
With regard to federal export compliance, we are available to assist companies in all industries with avoiding issues that have the potential to delay (or threaten) cross-border transactions and trigger scrutiny from CBP, OFAC, the FBI, and other federal agencies. We offer services ranging from legal advice for one-off transactions to full-scale, company-wide compliance. This includes compliance representation for matters such as:
- Automated Export System (AES) Filing Compliance
- Bureau of Industry and Security (BIS) and Other Licensing Compliance
- CBP Notice Compliance and Response
- Commodity Classification Requests
- Denied and Restricted Party Screening
- Detention and Seizure Policies and Practices
- Embargo, Sanction, and Other OFAC Compliance Matters
- Exception and Exemption Determinations and Compliance
- Export Classification Control Number (ECCN) Classifications
- Export Control Licensing
- Export Trade Regulation Compliance
- Foreign Corrupt Practices Act (FCPA) Compliance
- Internal Audits and Investigations
- International Traffic in Arms Regulations (ITAR) Registrations, Notifications of Changes, and Classifications
- Prior Disclosures
- Software Licensing, Technology Transfers, and Other Special Compliance Issues
Our Defense Representation for Federal Import/Export Matters
While proactive compliance is generally the best defense strategy, in certain situations, it is not possible to avoid scrutiny from federal authorities. If your business is under investigation by CBP, OFAC, the FBI, the U.S. Department of Justice (DOJ), the U.S. Drug Enforcement Administration (DEA), or any other federal law enforcement authority, it will be important for you to engage federal defense counsel promptly.
In addition to providing full-service compliance representation, we also represent importers, exporters, and other business clients in federal law enforcement investigations. We offer nationwide defense representation for federal import/export audits and investigations under statutes and regulations including, but not limited to:
- Anti-Terrorism Clarification Act (ATCA)
- Export Administration Regulations (EAR)
- Foreign Corrupt Practices Act (FCPA)
- International Narcotics Trafficking Emergency Response by Detecting Incoming Contraband with Technology Act (INTERDICT Act)
- International Traffic in Arms Regulations (ITAR)
We assist clients that have been served with federal subpoenas, target letters, civil investigative demands (CIDs), and all other forms of federal law enforcement inquiries. While much of our practice is devoted to representing clients at the investigative stage, we have extensive experience in federal grand jury proceedings, pre-trial practice, and civil and criminal trial litigation as well.
Why Choose Oberheiden, P.C. for Import/Export Compliance or ITAR Defense Services?
Oberheiden, P.C. is a federal compliance and ITAR defense law firm that represents companies nationwide in import, export, and other federal matters. Our former federal prosecutors and agents distinguish us from other law firms, as does our extensive experience in the areas of federal compliance and defense.
Import and export issues present unique challenges; and, as a result, they require a unique approach. At Oberheiden, P.C., we offer:
1. A Legal Team for Import/Export Matters
At Oberheiden, P.C., we don’t just tout our “team” of attorneys and former federal agents. Rather, we truly take a team approach to representing our clients. Each of our attorneys lends his or her unique knowledgebase to every matter we handle, and our former agents assist with audits and investigations on an as-needed basis when our clients can benefit from their specific areas of federal expertise.
2. Comprehensive and Custom-Tailored Compliance Programs
We don’t offer our clients “off the shelf” compliance programs for a simple reason: They don’t work. In order for an import or export control compliance program to be effective, it must be custom-tailored to the company’s specific operations, trade partners, legal risks, and business needs. As your company’s import or export compliance counsel, we will ensure that you have the policies, procedures, protocols, and documentation you need to stay compliant on an ongoing basis.
3. Proactive ITAR Defense Representation
As federal defense counsel for import and export matters, we take a proactive approach to protecting our clients’ legal and financial interests. During audits and investigations, we focus on achieving a favorable result for our client before federal charges get filed. In federal import/export cases, even seemingly minor and inadvertent miscues can lead to substantial exposure. Whether your company is at risk for civil sanctions or your shareholders or executives are at risk for criminal prosecution, we can use our experience to protect you.
4. 24/7 Nationwide Availability
We offer nationwide representation for import and export matters, and our attorneys and former agents are available 24/7. As our client, if you need to get in touch with us for any reason, we want you to contact us right away. If you are not a current client but you need legal representation on an emergency basis, our lawyers and former agents can get to work immediately and begin building your company’s compliance or defense strategy.
5. Federal Experience Beyond Import/Export Regulations and Controls
While we offer deep insights for issues specific to federal import and export regulations and controls, this is far from all we do. Our practice encompasses numerous other areas of federal compliance and ITAR defense services as well, including areas that are commonly implicated in import/export fraud investigations. For example, in criminal matters, company shareholders and executives will often face the risk of prosecution for money laundering, wire fraud, conspiracy, and other federal crimes. We have a proven record of success defending clients against these kinds of allegations, and we can use this experience to your advantage.
Speak with a Federal Import/Export ITAR Attorney at Oberheiden, P.C.
Regardless of your company’s needs, regardless of the urgency, and regardless of how much is at stake, our team of attorneys and former agents is at the ready. We can advise you, represent you, and advocate for a favorable result on your company’s behalf regardless of the circumstances at hand. Contact us today to learn more about our practice, and let us show you how we can use our deep knowledge and vast experience in complex federal matters to your company’s advantage.
Would you like to speak with a federal import/export lawyer? If so, we encourage you to get in touch. For a free and confidential case assessment, call 888-680-1745 or request a call online now.
Import/Export Compliance – ITAR Lawyers | Oberheiden P.C.