Any time a company decides to promote its defense materials for overseas sales and consumption, there is a process that must be followed to the letter. This is the International Traffic in Arms Regulations, known to everyone in the business as ITAR.
The Directorate of Defense Trade Controls governs ITAR, a regulatory framework dealing with national security issues. Accordingly, it is more restrictive than export controls found in the Export Administration Regulations (EAR).
Embarking on the journey to become ITAR-certified can be a pivotal step for aerospace contractors and companies aiming to expand their horizons in the global aerospace market. This process, while essential, can often seem daunting, filled with intricate compliance requirements and logistical challenges. However, understanding the path to ITAR certification is the first step towards unlocking new opportunities in international trade and collaborations.
Greenwood Aerospace stands ready to offer expert support for all your aerospace needs. With our comprehensive services in logistics and compliance, we are dedicated to simplifying this journey for you, ensuring that your focus remains on innovation and growth. Discover everything we have to offer your flight program, including:
- Fixed-wing aircraft acquisition and support
- Government contracting
- Aircraft sustainment
- Aircraft parts storage and distribution
- Our exclusive GPIQ Parts Procurement Intelligence
- and more!
Contact us today to speak with one of our dedicated experts, and see how we keep your flight program running on time every time.
Now, let’s take a look at what ITAR is, who it applies to, and what you need to become ITAR-compliant.
What is ITAR?
The International Traffic in Arms Regulation, or ITAR (and often referred to as "Arms Control"), encompasses a complex web of agreements and treaties aimed at managing the flow of conventional weapons across borders.
The primary goal is to prevent the proliferation of arms that could contribute to regional instability, conflicts, or human rights abuses. These regulations cover many different types of weapons, including
- firearms
- missiles
- military aircraft
- naval vessels
One of the key instruments in international arms regulation is the Arms Trade Treaty (ATT), which came into force in 2014. The ATT seeks to establish common international standards for the regulation of international trade in conventional arms, promoting transparency, accountability, and responsible arms transfers.
Additionally, various regional agreements and initiatives contribute to the broader framework of arms control, reflecting the interconnected efforts of the international community to curb the negative impact of unregulated arms transfers on global stability and humanitarian concerns.
What Does ITAR Compliance Mean?
Any time a company exports, manufactures, or brokers any defense article or defense services, the U.S. government requires that they operate by a strict set of regulations. ITAR compliance means adhering to these regulations to ensure that the transfer of sensitive military and defense-related items is secure and controlled. The primary objective of ITAR is to prevent the unauthorized transfer of defense technologies to foreign entities, especially those that may pose a threat to national security or violate international arms control agreements.
Almost all businesses that deal with these restricted goods or technologies must first register with the Directorate of Defense Trade Controls (DDTC). These requirements apply to commodities that are listed on the United States Munitions List (USML).
What is The Difference Between ITAR and EAR?
On the surface, the two sets of regulations are the same. In fact, they are similar but certainly not the same.
All exports of goods deemed to be ITAR govern weapons. These include munitions, ammo, cannons, missiles, etc. The U.S. Federal Government must expressly approve any transfer of ITAR items before a private contractor or manufacturer can release them to a non-US country or individual.
EAR is part of the federal code in Title 15 CFR. Here are a few of the key parts of EAR compliance:
- EAR requires export information to be filed when U.S. Possessions are transferred to foreign nations or areas (see 15 CFR 758.1(b) and 772.1).
- There are requirements to impose certain export controls from the EEI in the EAR (See 15 CFR 758.1(g) and 15 CFR 758.2).
- The export control information must be on export control documents on shipments that are exempt from AES filing (See 15 CFR 758.1(d).
Understanding and adhering to these regulations are crucial for aerospace industry members to navigate the complexities of international trade while ensuring national security interests are upheld.
The Myth of ITAR ‘Certification’
While ITAR standards must be met, it is an absolute myth to state that there is any sort of uniform certification. In fact, if you are looking into an ITAR certification course, you need to keep moving along.
There is a common misunderstanding that compliance equals certification. There is no such thing as ITAR certification; either your organization is compliant with the standard or you are not.
The most common comparison tool is that of a quality system like ISO. There is a certifying body that confirms ISO compliance. However, you cannot hire an outside agency to bring your organization into compliance.
The best overall focus for business owners who need to become ITAR-compliant is to focus on implementing processes to keep your business from violating ITAR regulations. Compliance with ITAR standards entails an ongoing commitment to meeting regulatory requirements, differing from systems like ISO that involve external certifying bodies. In essence, businesses aiming for ITAR compliance should prioritize the implementation of robust internal processes, taking a proactive stance to prevent violations rather than pursuing a non-existent certification. This distinction is crucial for business owners navigating the intricacies of ITAR regulations.
Who Needs to Be ITAR-Compliant?
Okay, so we have covered ITAR compliance a fair amount here. So, who needs to become ITAR compliant? The short answer is simple: any company that does business with the DoD or any organization that has information dealing with defense articles, services, or any data related to or mentioned in the USML.
Every single defense contractor, no matter how big or how small, must comply with ITAR. And as we said, there is no ITAR standardization certification that you can enroll in.
Oh, and it doesn’t end with the prime contractor. Third-party contractors are also subject to ITAR regulations when they work with prime contractors. These include:
- Distributors
- Tech companies
- Wholesalers
- Third-party suppliers
- Contractors
ITAR Compliance Checklist: Everything You Need To Know
Alright, so if there are no industry ITAR-compliance programs, how exactly is your organization supposed to become ITAR-compliant?
We provide an overview of everything you need to know to ensure strict adherence to the stringent regulations governing the export and transfer of defense articles and services. This checklist provides a clear approach to ITAR compliance, covering:
- Access controls
- System management
- Transmission of data
Equip your program with the knowledge and tools necessary to navigate the complexities of international trade while safeguarding national security interests.
Access Controls
The first step that you need to take is to put systems in place to access controlled information. There are three different and distinct measures in the process:
- To prevent the transmission of data from publicly used computers
- Requiring user-specific login credentialing (unique usernames and passwords, encrypted digital certificates)
- Physical security at locations where data is kept
Establishing robust access controls is a foundational element of ITAR compliance, crucial for safeguarding controlled information within the aerospace and defense industries. The initial imperative is to implement systems that strictly control access to sensitive data. First and foremost, it is essential to prevent the transmission of ITAR-controlled data from publicly used computers. This involves configuring network and computer settings to restrict the transfer of such information from terminals accessible to a broader audience.
Additionally, the implementation of user-specific login credentialing is vital. Each authorized individual should have unique and secure access identifiers, such as usernames and passwords or encrypted digital certificates, ensuring that only authorized personnel can access ITAR-regulated data.
Plus, physical security measures at locations where this data is stored must be stringent, covering restricted access areas, surveillance systems, and other safeguards to prevent unauthorized physical access. By integrating these measures, organizations can fortify their ITAR compliance stance, mitigating the risk of unauthorized access to critical defense-related information.
System Management
Access controls must be monitored and maintained, and you must appropriately maintain your systems. They have to be kept in check with ITAR regulations, which includes
- Up-to-date malware protection
- Security patches and updates on any computer used to store controlled data
- NIST 800-88 guidelines to sanitize media
- Make sure that all controlled information is encrypted
Timely application of security patches and updates is critical, addressing vulnerabilities that could be exploited to compromise sensitive information. Moreover, compliance with NIST 800-88 guidelines for media sanitization is essential to securely dispose of or repurpose storage media containing controlled information, minimizing the risk of data breaches.
Also, encryption emerges as a non-negotiable component of system management, ensuring that all controlled information is rendered unreadable without the appropriate decryption credentials. Organizations can bolster their system management practices, fostering ITAR compliance and reinforcing the protection of classified aerospace and defense data.
Transmission of Data
One of the biggest breaches of non-compliance is in the transmission of data. It is not unlawful to transfer data, but it must be done in a way that is compliant, both for internal and external communication. Here are some top tips for remaining ITAR-compliant during data transmission:
- Always encrypt it
- Encrypt wireless networks that are used for accessing controlled information
- Monitor all inbound and outbound network traffic, and make sure to block any unauthorized traffic
- Employ the use of firewalls, intrusion prevention, and detection, and use security services to detect any data extraction
Implementing encryption measures for wireless networks accessing controlled data, vigilant monitoring of network traffic, and deploying robust cybersecurity tools, including firewalls and intrusion prevention systems, are essential strategies to thwart unauthorized access and potential data breaches. By adhering to these best practices, organizations can navigate the complexities of ITAR regulations, ensuring not only the integrity of their systems but also the lawful and secure exchange of aerospace and defense-related information.
What Are Penalties for Noncompliance With ITAR?
If you are in a position where ITAR compliance is mandatory, you need to comply. If you don’t, you will be dealing with the State Department, and they will go after your organization. To what degree?
Well, they might hit you with criminal fines, civil fines, and of course, jail time. One prime example of this is FLIR Systems, a major contractor of the DOD. The State Department fined them a whopping $30 million for alleged export violations.
Per the State Department press release:
“The Department of State has concluded an administrative settlement with FLIR Systems, Inc. of Wilsonville, Oregon, to resolve alleged violations of the Arms Export Control Act (AECA), 22 U.S.C. § 2751 et seq., and the International Traffic in Arms Regulations (ITAR), 22 CFR Parts 120-130. The Department of State and FLIR have reached this settlement following an extensive compliance review by the Office of Defense Trade Controls Compliance in the Department’s Bureau of Political-Military Affairs.
The U.S. Department of State and FLIR have reached an agreement pursuant to ITAR § 128.11 to address alleged unauthorized exports of defense articles, including technical data; the unauthorized provision of defense services; violation of the terms of provisos or other limitations of license authorizations; and the failure to maintain specific records involving ITAR-controlled transactions. FLIR’s alleged unauthorized exports also included the retransfer of ITAR-controlled technical data and provision of defense services to dual national employees of Iran, Iraq, Lebanon, and Cuba to which the United States restricts exports of defense articles and defense services.”
This is very serious. ITAR compliance is a big deal, and the State Department will make sure you understand that if you aren’t playing by the rules.
Final Thoughts
Greenwood Aerospace has been an ITAR-compliant facility for many years since it is essential to our business.
GovernmentProcurement.com, operated by Greenwood Aerospace, proudly serves the U.S. military community. We are ITAR-registered by the U.S. Department of State, allowing us to access defense supply chains to fulfill contracts.
If you are ready to work with an ITAR-registered agency that will supply your parts needs for your missions, give us a call or start an online quote today! We’d love to hear from you, and one of our experienced representatives will walk you through the process and our services.
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