International Traffic In Arms Regulations (ITAR) For Corporate  Officers and Senior Management <br />Compliance Assurance ...
Property of Compliance Assurance LLC<br />What Are the International Traffic In Arms Regulations?<br />Section 38 of the A...
Property of Compliance Assurance LLC<br />International Traffic In Arms (ITAR)<br />What Exactly is a Defense Article or S...
Property of Compliance Assurance LLC<br />USML Categories<br /><ul><li>I - Firearms
II – Guns and Armament
III – Ammunition/Ordnance
IV - Launch Vehicles, etc.
V - Explosives, Propellants, Incendiary Agents and Their Constituents
VI - Vessels of War and Special Naval Equipment
VII - Tanks and Military Vehicles
VIII - Aircraft and Associated Equipment
IX - Military Training Equipment
X - Protective Personnel Equipment
XI - Military Electronics
XII - Fire Control, Range Finder, Optical and Guidance and Control Equipment
XIII – Auxiliary Military Equipment
XIV - Toxicological Agents and Equipment and Radiological Equipment
XV - Spacecraft Systems and Associated Equipment
XVI - Nuclear Weapons Design and Related Equipment
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Itar for senior executives

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Itar for senior executives

  1. 1. International Traffic In Arms Regulations (ITAR) For Corporate Officers and Senior Management <br />Compliance Assurance LLC<br />February 16, 2011<br />Property of Compliance Assurance LLC<br />
  2. 2. Property of Compliance Assurance LLC<br />What Are the International Traffic In Arms Regulations?<br />Section 38 of the Arms Export Control Act (AECA) Authorizes the President to Control the Import and Export of Defense Articles and Services<br />Statutory Authority to Promulgate Regulations Was Delegated to the Secretary of State (E.O. 11958)<br />22 CFR part 120.1 Implements that Authority in the International Traffic In Arms Regulations<br />“The ITAR”<br />Property of Compliance Assurance LLC<br />
  3. 3. Property of Compliance Assurance LLC<br />International Traffic In Arms (ITAR)<br />What Exactly is a Defense Article or Service?<br />Part 120.2 – Items designated on the U.S. Munitions List (USML) as specified in part 121 of the ITAR<br />Property of Compliance Assurance LLC<br />Property of Compliance Assurance LLC<br />
  4. 4. Property of Compliance Assurance LLC<br />USML Categories<br /><ul><li>I - Firearms
  5. 5. II – Guns and Armament
  6. 6. III – Ammunition/Ordnance
  7. 7. IV - Launch Vehicles, etc.
  8. 8. V - Explosives, Propellants, Incendiary Agents and Their Constituents
  9. 9. VI - Vessels of War and Special Naval Equipment
  10. 10. VII - Tanks and Military Vehicles
  11. 11. VIII - Aircraft and Associated Equipment
  12. 12. IX - Military Training Equipment
  13. 13. X - Protective Personnel Equipment
  14. 14. XI - Military Electronics
  15. 15. XII - Fire Control, Range Finder, Optical and Guidance and Control Equipment
  16. 16. XIII – Auxiliary Military Equipment
  17. 17. XIV - Toxicological Agents and Equipment and Radiological Equipment
  18. 18. XV - Spacecraft Systems and Associated Equipment
  19. 19. XVI - Nuclear Weapons Design and Related Equipment
  20. 20. XVII - Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated
  21. 21. XVIII – Directed Energy Weapons
  22. 22. XIX - Reserved
  23. 23. XX - Submersible Vessels, Oceanographic and Associated Equipment
  24. 24. XXI - Miscellaneous Articles</li></ul>Property of Compliance Assurance LLC<br />Property of Compliance Assurance LLC<br />
  25. 25. Property of Compliance Assurance LLC<br />International Traffic In Arms (ITAR)<br />What Exactly is a Defense Article or Service?<br />Part 120.3(a) - “is specifically designed, developed, configured, adapted, or modified for a military application, and <br />Does not have predominant civil applications, and<br />Does not have performance equivalent (defined by form, fit and function) to those of an article or service used for civil application;”<br />Property of Compliance Assurance LLC<br />Property of Compliance Assurance LLC<br />
  26. 26. Property of Compliance Assurance LLC<br />International Traffic In Arms (ITAR)<br />What Exactly is a Defense Article or Service?<br />Defense Articles<br /><ul><li>Any item or technical data designated on the USML
  27. 27. Includes technical data recorded or stored in any physical form, models, mock-ups or other items that reveal technical data</li></ul>Defense Services<br /><ul><li>Furnishing assistance including training, to foreign persons in the U.S. or abroad
  28. 28. Military training of foreign units and forces</li></ul>Property of Compliance Assurance LLC<br />Property of Compliance Assurance LLC<br />
  29. 29. Property of Compliance Assurance LLC<br />Scope of Export Controls<br />What Items Are Controlled under the ITAR?<br /><ul><li>Essentially, any item specifically designed for military purpose is controlled… down to the smallest part
  30. 30. If any component is ITAR-controlled, then the equipment on which installed is also ITAR-controlled (see through rule)
  31. 31. Purpose for which it is now being used is irrelevant
  32. 32. E.g. Military aircraft (C-130) being used for cargo plane</li></ul>Property of Compliance Assurance LLC<br />
  33. 33. Property of Compliance Assurance LLC<br />International Traffic In Arms (ITAR)<br />What is a Broker (Part 129)?<br /><ul><li>Any person who acts as an agent for others in negotiating or arranging contracts, purchases, sales or transfers of defense articles or services in return for a fee, commission or other consideration.</li></ul>Brokering Activity is Controlled Under the ITAR!<br /><ul><li>Does not apply to domestic sales or transfers</li></ul>Property of Compliance Assurance LLC<br />Property of Compliance Assurance LLC<br />
  34. 34. Property of Compliance Assurance LLC<br />Benefits of Being ITAR Compliant<br />ITAR Requirement to Participate in Defense Article Manufacturing (Even Just Once!)<br />Demonstrates to Defense Contractors and Customers That You Are a Legitimate Partner<br /><ul><li>Like ISO / six sigma demonstrate commitment to quality
  35. 35. Often required part of prime contractor’s program</li></ul>Protects Your Company From Fines, Penalties and Negative Publicity<br />Property of Compliance Assurance LLC<br />
  36. 36. Benefits of Not Being ITAR Compliant<br />Joseph Piquet, Port St. Lucie, FL<br />Convicted of 7 counts of conspiracy to export military-use electronic components to Hong Kong and PRC without the required export licenses under the Arms Export Control Act and the International Emergency Economic Powers Act (IEEPA)<br />Submitted false End Use Certificates to the manufacturer (NGC)<br />Sentenced to 5 years in prison<br />Two years supervised release (after prison term)<br />Free Room and Board!<br />Property of Compliance Assurance LLC<br />
  37. 37. Senior Management Responsibility<br />Property of Compliance Assurance LLC<br />
  38. 38. Senior Management Responsibility<br /><ul><li>Keep Your DDTC Registration Current
  39. 39. Officers, addresses/locations, contact numbers
  40. 40. Sign Registration Statement and Transmittal Letters
  41. 41. Confirm Which Senior Officer Listed on the Registration Statement Will Oversee the Compliance Program
  42. 42. Designate and Provide DDTC list of Full-time Employees Who Serve as “Empowered Officials”
  43. 43. Provide names and contact info</li></ul>Property of Compliance Assurance LLC<br />
  44. 44. Senior Management Responsibility<br />Maintain Records of Manufacture, Acquisition and Disposition of ‘Defense Articles and Services’<br />Maintain Records of Political Contributions, Fees and Commissions Furnished or Obtained <br />Ensure That Managers, Supervisors and Employees Receive Training on AECA and ITAR Requirements<br />Ensure That Employees Understand the Ramifications For Failure to Comply With the Regulations <br />Property of Compliance Assurance LLC<br />
  45. 45. Senior Management Responsibility<br />Property of Compliance Assurance LLC<br />And If We Don’t…<br />The Ultimate Responsibility Belongs to Senior Management!<br />
  46. 46. Who Is Your Empowered Official?<br /><ul><li>U.S. Person directly employed in a position having authority for policy or management; and
  47. 47. Legally empowered to sign license requests or other requests for approval
  48. 48. Understands the provisions and requirements or statutes and regulations
  49. 49. Has the independent authority to:</li></ul>Inquire into any aspect of a proposed transaction <br />Verify the legality of the transaction and accuracy of info to be submitted<br />Refuse to sign any license application or other request for approval without prejudice or other adverse recourse<br />Property of Compliance Assurance LLC<br />
  50. 50. How Do We Ensure Compliance?<br />Property of Compliance Assurance LLC<br />Senior Management Is Responsible But Does Not Manage the Day-to-day Activities…<br /><ul><li>Must Have a Comprehensive Export Compliance Program!
  51. 51. Refer to the Compliance Guide Sent with Registration</li></li></ul><li>Property of Compliance Assurance LLC<br />What Are the Key Elements of an Effective Compliance Program?<br />(1) Organizational Structure<br />Corporate Commitment and Policy<br />ID, Receipt & Tracking of ITAR Controlled Items<br />Re-export / Re-transfer Procedure<br />Restricted/Prohibited Exports & Transfers <br />Recordkeeping <br />Internal Monitoring & Auditing<br />Training<br />Notification & Escalation Policy<br />Source: U.S. Dept. of State, Bureau of Political Military Affairs<br />Property of Compliance Assurance LLC<br />Property of Compliance Assurance LLC<br />
  52. 52. Property of Compliance Assurance LLC<br />What Makes and Effective Compliance Program?<br />An effective export management and compliance program includes adherence to a set of operational compliance policies, procedures, and safeguards <br /> AND a written set of export-related guidelines that tell employees what is expected of them and provides management with a framework to evaluate whether: <br />What should happen, does happen and What shouldn’t happen, doesn’t happen …on a daily basis.<br />Source: Bureau of Industry and Security<br />Property of Compliance Assurance LLC<br />Property of Compliance Assurance LLC<br />
  53. 53. Property of Compliance Assurance LLC<br />Have Questions? Give Me a Call:<br />www.WeAreCompliant.com<br />Property of Compliance Assurance LLC<br />Property of Compliance Assurance LLC<br />
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