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1. The penalties assessed by our government agencies for
even unintentional violations of the export regulations
(Export Administration Regulations and International
Traffic in Arms Regulations, and others) are such that small
and medium-sized manufacturer/exporters can cause
serious harm to their own future by taking a cavalier
attitude toward exporting. The regulations are written
such that it is not easy, without some training and
experience, to wade through all the various rules and
exceptions that may apply to your specific export action. I
have recently experienced a few incidents of companies
using "a little knowledge" to address complex subjects.
Some of those follow:

2. Dual Use. While the Bureau of Industry and Security (BIS)
under the Department of Commerce is generally
responsible for dual use items, the Directorate of Defense
Trade Controls (DDTC) in the Department of State has
"first rights of refusal" for taking jurisdiction over the
items. In addition, there can be a significantly different
approach for an item initially designed for the military and
modified for commercial applications than for one initially
designed for commercial and later modified for military
applications. There is no recipe available that can assure a
company that it is taking the safe approach. Each situation
is unique.

3. The Canadian Exemption. An initial reading taken a face
value of the information available concerning the
Canadian Exemption to license requires for International
Trade in Arms Regulations (ITAR) type items seems to
indicate that there is no issue with any military items
going to Canada without requiring an export license.
However, upon further investigation, the astute export
expert will find more than 21 exceptions to the
exemption, in addition to the normal general prohibitions
to export. Even if a license is not required, a certain
amount of paperwork is required so that the Census
Bureau can keep their statistics.

4. Commodity Jurisdiction. It's tempting for a manufacturer
to self determine the jurisdiction of commodities and in
most cases it's relatively easily done by the manufacturer
on those items that clearly have no military application. In
fact, the vast majority of items require no license for
exporting. However, there are two inherent dangers: 1)
certain records MUST be maintained for all
exports, including those that do not require a license, and
2) it is often difficult to determine whether an item has a
military or terrorist application. The government has
recently made the process safer for manufacturers by
offering to define the ECCN number for any
commodity, and by providing an electronic means for
submitting a Commodity Jurisdiction request. I would
always recommend that a company take advantage of

5. I have discovered over many years of association with the
government in various capacities, that nothing about
government regulations is easy or obvious. The idea of
writing these documents in "plain English" has been
discussed over the years, but it's never really caught on.
Even the definition of "plain English" has not yet achieved
agreement. A cursory reading of the Export Administration
Regulations (EAR) and ITAR and publications on the
Internet relating to those documents can lead one to error.

6. For instance, not long ago a member of a client
organization stated to the effect that since most items do
not require an export license (something he read on an
official government website), the item he was exporting
obviously would not require a license so he could safely
proceed with its export. In addition, in his previous
company he had done the same and since it was a large
company they obviously knew what they were doing. I
advised him, and his supervisor, to first determine the
ECCN of the subject item, which he had not done, then go
to the EAR and see if a license was required and, if
so, whether an exception was allowed. Whether he
followed through, I don't know.

7. In another case, an item was stated to be ITAR controlled -
which was probably correct - but a derivative item, nearly
identical, was not. Again, this determination was made
without researching the regulations or exercising a
Commodity Jurisdiction determination. I advised the
company to determine the ECCN, either themselves or via
SNAP-R, and request a Commodity Jurisdiction. In this
case, I have been lead to understand that the company
will follow through on my recommendation.

8. Both those situations involved small companies and
relatively small exports. The odds of getting caught in a
violation were likely small, but the penalties, if they had
committed the violations, could break either company.
The risks are too high.

9. If you don't have a knowledgeable export compliance
person on your staff, hire a consultant. Don't assume,
unless you've been through a good training program, that
you understand the regulations. Go on the government
websites, either the Bureau of Industry and Security
www.bis.doc.gov or Directorate of Defense Trade Controls
www.pmddtc.state.gov, and take a look at the penalties of
those companies, large and small, that have violated the
export rules. It's sobering.

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