ITAR: Understanding Government entities
US businesses need to understand that there are 2 entities which have oversight and influence on their business; the US Department of State (USDOS) and the US Department of Commerce (USDOC). While both are US government agencies, their focus as it relates to US companies are diametrically opposed. USDOS is primarily focused on protecting the United States an ensuring that our adversaries are not obtaining equipment, information and technology that could be harmful. Subsequently, USDOC is focused on the promotion and success of US business abroad. As a result of this situation, US businesses must use and understand both entities to ensure that they are complaint and conducting business in a manner commensurate with the policies, laws and regulations of all governmental agencies (US and customer countries).
USDOS controls and implements the ITAR and is the gate keeper in this regard and can at times be very aggressive as they take their charter very seriously. In many cases, when fully analyzed, the problems stem from a misunderstanding of the ITAR or more likely a complete lack of understanding of it. Unlike many governmental and regulatory issues, the ITAR contains language such as “should have known” or “a reasonable understanding” meaning that while the ITAR may not specifically address a situation, USDOS feels that it does contain enough information to guide US companies adequately. In other words, the statement “I didn’t know” is not sufficient to evade legal issues, fines and/or imprisonment should it be found that you are outside of the ITAR.
ITAR: What companies must know
Companies must understand that while the ITAR specifically calls out “arms”, it covers literally anything that could be used in defense to include training. Furthermore, the ITAR does not only apply to goods sold overseas, it also covers technology that is placed on websites, training given in the US and goods sold in the US destined for an overseas location. Many companies have found themselves on the wrong side of the ITAR because they “thought” it didn’t apply. Fines and penalties for infringement of the ITAR are not insignificant and can easily destroy a company, however even more significant is the fact that USDOS goes after individuals as well as companies, so the issue may not subside when a business is closed, meaning that USDOS will bring suit against specific individuals within the company as well as the company.
The “moral” of the story is this, US companies must educate themselves and establish practices and procedures to address and mitigate the issues contained within the ITAR.
SBS Training Solutions can provide the necessary training to achieve a robust ITAR and USDOS compliance program. Please contact SBS for more information.