5 Common ITAR Violations You May Not Know About

Written by jon rydberg

May 31, 2016

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Five Common Firearm ITAR / Firearm Export Violations

If you’re a business that manufactures or exports defense articles like firearms and ammunition, you’re subject to the rules of the ITAR, the International Traffic in Arms Regulations. It is far easier to violate these rules than you might think.

In this post, we’ll look at 5 common ITAR violations and how to avoid them.

Registration

Manufacturers of firearms, ammunition and components must register with the U.S. Department of State, Directorate of Defense Trade Controls (DDTC), even if they don’t intend to export their products. It is illegal to manufacture defense articles without registering. The ITAR also require advance approval from the DDTC to export pretty much any firearm, ammunition or component.

Technical Data Licenses

Prior approval is required before exporting technical data or defense services that relate to firearms or ammunition. If you fail to obtain prior approval to export any of these, you are in violation of the ITAR. This means, for example, that you cannot send technical drawings to obtain a quote from a foreign vendor without a license. You also cannot have a discussion of technical data with engineers from foreign companies unless you have obtained a license. Mistakes happen when employees don’t know the rules they need to follow.

Documents

Innocent errors or omissions in export documents can lead to ITAR or Customs violations. These documents include DDTC license applications, electronic export information filings, destination declarations, delivery verifications, applications for registration, purchase orders, foreign import certificates, bills-of-lading, non-transfer and use certificates, and shipping documents that contains information relevant to the export of a defense article. Essentially, if you’re exporting defense articles, don’t forget that mistakes can have legal implications and triple-check that all forms are complete and accurate.

Other Parties

If you are the exporter of record for a defense article, defense service, or technical data, the Department of State holds you accountable for knowing not just your customer, but all parties involved in the transaction. It’s up to you to confirm that they are not prohibited from engaging in ITAR-controlled transactions and that the information they provide regarding end users and end use is reliable. Good due diligence is critical. Failure to investigate exposes you, your employees, and your company to government enforcement actions. Even with a license, or when a defense article, service or data is exported under an ITAR exemption, exporters have continuing responsibility under the ITAR for the controlled items they export.

Control of Technical Data

If you manufacture, design or perform manufacturing services relating to firearms, ammunition or components, you are probably in possession of ITAR-controlled technical data. The definition of technical data under the ITAR is very broad and includes almost all information that is used in the design, manufacture, testing, repair or quality assurance of defense articles. The ITAR prohibit you from transferring or disclosing technical data to foreign persons anywhere, even in the United States, without a license. One challenge is that there are many foreign persons lawfully or unlawfully in the U.S. and identifying them can be difficult. Knowing when information is technical data can also be hard. The important point is that if you work with ITAR regulated technical data, the burden is on you to take steps to avoid unauthorized exports.

The ITAR are a complex set of regulations and they may affect your business even if you don’t ship to customers outside the United States. Now that you’re aware of the complications, we hope you’ll be able to institute procedures to avoid ITAR non-compliance. Contact us today if you still have questions about the International Traffic in Arms Regulations.

Need information? Contact us today.

By Jeff Grody
Principal and Export / ITAR Practice Lead

Orchid Advisors assists firearms manufacturers, distributors and retailers in achieving compliance and operational excellence through education, technology, software and consulting solutions that reduce risk, cut costs, and provide expert guidance to make our client’s business more successful and efficient.