Selling defense products or services to a foreign military is challenging. U.S. companies and foreign clients can become frustrated with the bureaucracy and duration it takes to go from initial interest to finalizing a sale. The International Traffic in Arms Regulations (ITAR) are stringent export control regulations under the jurisdiction of the U.S. Department of State. One of the ITAR’s purposes is to ensure defense-related technology stays in authorized hands. ITAR compliance is required for any manufacturer or exporter of defense-related technologies, associated products, or services that take place with a foreign customers. The ITAR approval process can be difficult, confusing, and fraught with risk. Obtaining clarity on ITAR and export compliance matters is critical when transacting with foreign customers.
An Overview of ITAR
ITAR regulations are primarily aimed for those articles that have direct defense-related applications. However, this definition can be broad and all-encompassing. While the regulations are primarily geared towards arms and defense materiel, they also cover ancillary parts, equipment, information, and services that may have a defense application. More often than not, many small-medium size business owners fail to understand how the ITAR affects the export of their products.
For example, a company may want to export some PC repair components into a foreign country. What many fail to realize is that one particular part could also be used in the manufacture of military equipment and is subject to strict ITAR guidelines. Even though it may be going to a strictly commercial customer, it still may fall under the ITAR and ultimately considered a “defense” component. One can see why companies get confused and in trouble.
The Need of ITAR for Foreign Military Sales
Companies need to determine whether or not an item for manufacture of export is regulated under the ITAR. For most companies, the ITAR process can be made simple by contacting a subject matter expert.
Companies that plan to contract with foreign parties need to determine if they will be regulated under ITAR. Companies and government contractors that fail to comply with all ITAR regulations may suffer serious consequences including:
- Criminal liability; and
- Imprisonment for company employees or owners.
There are a number of company-wide considerations that are required for companies to implement under the ITAR. Examples of some of these may include:
- Obtaining necessary export licenses and maintaining recordkeeping to stated standards;
- Limitations on defense services performances for foreign parties;
- Restrictions on the transfer of technical data and regulated software; and
- Registration requirements.
Small and medium sized companies can take advantage of exporting to foreign militaries. Contact DXL Solutions for further insights on ITAR regulations and export requirements.