ITAR Compliance Attorneys - Federal Lawyer

ITAR Compliance Attorneys

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.

At Oberheiden, P.C., our ITAR compliance and defense lawyers represent companies based in the United States and abroad 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, our knowledgeable attorneys are here to help. Our team of import and export lawyers consists of former federal prosecutors and former high-ranking agents with various law enforcement agencies, including the Federal Bureau of Investigation. 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.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Gamal Abdel-Hafiz
Gamal Abdel-Hafiz

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

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:

  • Afghanistan,
  • Belarus,
  • Central African Republic,
  • China,
  • Cote d’Ivoire,
  • Cuba,
  • Cyprus,
  • Democratic Republic of the Congo,
  • Eritrea,
  • Fiji,
  • Haiti,
  • Iran,
  • Iraq,
  • Lebanon,
  • Liberia,
  • Libya,
  • Myanmar,
  • North Korea,
  • Republic of the Sudan (Northern Sudan),
  • Rwanda,
  • Somalia,
  • Sri Lanka,
  • Syria,
  • Venezuela,
  • Vietnam,
  • Yemen, and
  • Zimbabwe.

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.

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.

For organizations covered under ITAR, a compliance program is all but mandatory. The more detailed the compliance program, the more protection it will offer the business. When creating an ITAR compliance program, businesses should ensure their internal documents are,

  • 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.

How ITAR Compliance Attorneys Can Help Businesses

If you either know your business is subject to ITAR, or are unsure whether your businesses’ activities bring it within the gamut of ITAR, an experienced ITAR compliance attorney can help with each of the above steps.

At Oberheiden, P.C., our dedicated federal defense attorneys have extensive experience working with all types of businesses, including manufacturers, wholesalers, consultants, exporters, and more. We begin every client relationship by taking as much time as necessary to fully understand the business so we can provide effective guidance. If we determine that your business needs to comply with ITAR, we will clearly explain your compliance requirements and work with you to develop an effective compliance program. And in the event your business is already facing federal regulatory scrutiny, our committed federal defense attorneys will aggressively defend your business.

Contact Oberheiden, P.C. to Speak with a Knowledgeable ITAR Compliance and Defense Attorney

At Oberheiden P.C., we represent organizations across the country in all types of federal investigations, including those related to ITAR violations. Our import and export attorneys also help businesses determine if their activities bring them within the scope of ITAR, and work with them to develop comprehensive, effective, and custom-tailored ITAR compliance programs. If you have questions, we will provide you with clear, concise answers, and help you navigate the complicated regulatory framework. To discuss your situation, call 888-680-1745 or request a complimentary case assessment online.

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