The world of international arms trading and defense procurement is challenging. It is filled with red tape and regulatory burdens, representing a significant entry threshold. At the most basic level, international arms trading is regulated by the International Traffic In Arms Regulation, known as ITAR.
Looking to work with an ITAR-compliant aerospace supplier? Greenwood Aerospace has over forty years providing expert services in supporting our nation's defenses, including:
- Military & defense contracting
- Military aircraft parts
- FMS sales & support
- Aerospace parts storage & distribution
- Aircraft sustainment
- and more!
Contact us today to begin streamlining your flight program's operations, and experience the benefits of working with a leading, and ITAR-compliant, industry expert.
Join us as we answer all your questions on ITAR, including:
- What is ITAR?
- What does it mean for vendors in the United States?
- What items fall within ITAR regulations?
- What does Greenwood Aerospace supply for ITAR compliance?
Compliance is vital for all defense vendors importing or exporting weapons. Let’s find out what it is and how it works.
Understanding ITAR Regulations
While the world of warfare may appear to be a world without rules, it couldn’t be further from the truth.
ITAR controls the export and import of all defense services and articles globally. These items must be on the United States Munitions List (USML). All manufacturers, brokers, exporters, etc., of anything serviced for defense industry sales must be ITAR-compliant.
ITAR is a State Department compliance initiative. ITAR-certified compliance is conducted through the Directorate of Defense Trade Controls, a directorate within the Department of State. This is the governing body for international arms trading, and it is expected that when a private company accepts a DDTC contract, they are ITAR-compliant. Non-compliance is not acceptable.
But let’s quantify this first. There are two separate types of regulations in place for arms trading. We are only focusing on ITAR regulations for now.
ITAR controls the exportation of all items that are considered weapons. These would be missiles, Vulcan cannons, ammunition, assorted munitions, etc. Before a private contractor or manufacturer may transfer or release ITAR items to another non-US nation or person, the U.S. Federal Government must explicitly approve that transfer.
There is no easy way to understand how ITAR works. DDTC is the governing body. ITAR covers articles and items on the USML, and ITAR implements parts of the Arms Export Control Act, which is a codified amendment to the Foreign Assistance Act of 1961.
Some of the most common items considered to be defense articles on the USML are:
- Chemical agents include nerve agents (sarin, soman, tabun).
- Biological agents
- Medical countermeasures, vaccines, and antidotes are specified for treating chemical or biological agents.
- Body armor, clothing used to reduce detection by electronic measures, and eyewear designed for laser protection.
- Military-specific aircraft and aerial vehicles.
ITAR is a rabbit hole you could go down for days, but we will spare you. These are highlights to form a basic understanding.
What is EAR Compliance?
Okay, so we have talked briefly about ITAR and what it is. But it is not the only set of regulations governing the arms industry. Another critical set of rules is the Export Administration Regulations (EAR). Unlike ITAR, which is a State Department initiative, EAR falls under the Department of Commerce in a directorate known as the Bureau of Industry & Security.
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).
This is in stark contrast to ITAR, emphasizing the importance of a comprehensive approach to arms industry regulations. Let's take a closer look at where specifically ITAR and EAR differ.
Differences Between ITAR & EAR Compliance
One of the most obvious differences between ITAR & EAR compliance is that they are from completely separate cabinet-level departments within the federal government. It is important to understand that turf wars exist within the federal government. In fact, not only do they exist, but they are fairly common. Can two separate cabinet-level departments regulate the same thing? Maybe. In this case, though, the EAR ends up catching a lot of defense-sector goods and services that ITAR isn’t covering. EAR regulates defense hardware, which includes
- Munitions
- Small arms (rifles, machine guns, etc.)
- Aircraft
- Tactical vehicles
- Military materials
- Chemicals
There is some apparent overlap, but EAR is geared more toward commercial and dual-use items (materials that can be used for commercial or military purposes). What does this look like?
Take aircraft, for example. ITAR would regulate the sales of F-16s to a foreign nation because they are undisputedly a tactical military aircraft. But what about the commercial sales of a Beechcraft King Air? Both militaries and commercial operations around the world frequently fly King Airs. Since this is the case, EAR would be the governing body for the commercial export of a King Air.
Understanding ITAR: What Items Fall Within its Regulatory Scope?
Diving into the intricacies of ITAR, it's necessary to understand the vast array of items that fall within its regulatory scope. While ITAR is often referred to as "Arms Control," it has steadily begun to encompass more, overseeing regulations on military electronics and even technical data.
As we explore the items covered under the ITAR umbrella, it's crucial to recognize the comprehensiveness of ITAR, organized into twenty-one distinct articles constituting the United States Munitions List (USML). From firearms and armament to spacecraft, nuclear-related articles, and beyond, these categories define the expansive reach of ITAR regulations.
Let's take a closer look at the diverse spectrum of items subject to ITAR oversight, offering insight into the nuanced classification of defense-related assets and technologies.
What Specific Items Are Covered by ITAR?
So, let’s talk specifically about the items covered under the ITAR umbrella.
ITAR is totally comprehensive, made up of twenty-one distinct articles, which are groups of items commonly found together. These articles make of the USML, which is found at 22 CFR §121.1. Here are the categories:
- Firearms and related articles. This includes fully automatic up to .50 caliber, shotguns, suppressors, and all small arms systems AND parts.
- Guns & armament. These guns are larger than .50 caliber and include howitzers, mortars, recoilless rifles, etc.
- Ammunition & ordinance. This part is self-explanatory.
- 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. All naval warships and combatant vessels fall under this category.
- Ground vehicle. This is ALL ground vehicles, from trucks to tanks and everything in between.
- Aircraft and all related articles. This pertains to all aerial assets, from UAVs to fighters.
- Military training equipment and training.
- Personal protective equipment.
- Military electronics.
- Fire control, laser, imaging, and guidance equipment. These would be fire control systems for all kinds and types of delivery devices.
- Materials and miscellaneous articles. These could be cryptographic equipment, infosec, information awareness, etc.
- Toxicological agents, including chemical agents, biological agents, and associated equipment.
- Spacecraft and associated equipment.
- Nuclear weapons-related articles. Anything that has to do with nuclear weapons but not the weapons themselves.
- Classified articles, technical data, and defense services not otherwise enumerated.
- Directed energy weapons.
- Gas turbine engines and associated equipment.
- Submersible vessels, oceanographic and related articles.
- Articles, technical data, and defense services not otherwise enumerated. Everything else goes here.
Implications of ITAR for Businesses and Individuals
A significant regulatory burden exists for businesses and individuals to comply with ITAR for overseas sales of USML articles. If your goods and services fall under the 21 articles listed in the previous paragraph, your business must be certified through ITAR.
Vendors must submit an export license application using the D-Trade electronic licensing system of the DDTC in accordance with the ITAR. Using this system, U.S. citizens and some foreigners can apply for licenses that let them temporarily import or export defense products in accordance with the ITAR's standards.
If the items are not categorized as ITAR but fall under the EAR, and you wish to export, you’ll still need to register your items through the SNAP-R online registration system. It is not the responsibility of the foreign nation seeking to purchase an item to ensure compliance; it is always the responsibility of the American vendor to comply. Failing to comply will likely lead to legal ramifications.
Who Needs to Be ITAR-Compliant?
Entities engaged in the export, manufacture, or transfer of defense articles and services fall under the purview of ITAR compliance. This includes:
- Defense contractors
- Aerospace companies
- Manufacturers involved in the production of munitions, missiles, or military electronics
- Government agencies, such as the Department of Defense (DOD) and the Department of State
- U.S. military branches
- Any organization collaborating with or providing services to these entities
- Any individuals involved in the design, development, or sale of defense-related technologies
Overall, if your activities involve defense-related items or services, understanding and adhering to ITAR regulations is crucial to avoid legal ramifications. Predictably, the penalties for failing to comply with ITAR are severe, so anyone in this space must comply.
The U.S. is by far the largest exporter of military arms in the world, dominating the field with over 40% of global exports. The U.S. Government is obviously okay with it if you play by their rules. The strict regulations are due to the sensitivity of the goods and materials being transferred. If you are in this space, you must ensure compliance. And there is some crossover between ITAR and EAR, so it is best to confirm where your exports stand, legally speaking.
ITAR Penalties for Noncompliance
We mentioned that there are stiff penalties for failing to register properly. But how stiff are we talking?
- $20m settlement of alleged export violations by 3D Systems Corporation
- $13m in civil penalties charged to Honeywell for violations
- One year imprisonment for brokering violations
The violations and penalties are all thoroughly detailed in 22 CFR Part 127. This is the federal code, so it is gospel, and it is best to pay heed or suffer the consequences. Honeywell can definitely absorb $13m in fines, but a small business can be put underground by that.
And they are deadly serious about these. Last August, ten attorneys were disbarred for violating the Arms Export Control Act. Pay close attention to all the fine print if you are ITAR certified. Consider working with Greenwood Aerospace if you aren't, since we are well-versed in this space.
Work With an ITAR-Registered Company in Greenwood Aerospace
The red tape of ITAR and EAR can be mind-boggling. Consider working with us if you want to market your equipment or other articles for overseas sales.
Greenwood Aerospace is your trusted, ITAR-certified supplier. We are experienced in the field of international aerospace and arms trade so we can walk you through the entire process. You will know that you will be operating within the confines of ITAR without worrying about penalties and other costly issues. Give us a call, or shoot us a message now to get started!
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