The document discusses the International Traffic in Arms Regulations (ITAR), which control the export of defense articles and services. ITAR is authorized by the Arms Export Control Act and implemented by the State Department. Defense articles include any items on the US Munitions List, and defense services include military training. Senior management is responsible for ensuring their company complies with ITAR requirements such as registration, recordkeeping, and training employees. An effective compliance program includes organizational policies and procedures to properly handle any controlled defense articles or services.

1. International Traffic In Arms Regulations (ITAR) For Corporate Officers and Senior Management Compliance Assurance LLCFebruary 16, 2011Property of Compliance Assurance LLC

2. Property of Compliance Assurance LLCWhat Are the International Traffic In Arms Regulations?Section 38 of the Arms Export Control Act (AECA) Authorizes the President to Control the Import and Export of Defense Articles and ServicesStatutory Authority to Promulgate Regulations Was Delegated to the Secretary of State (E.O. 11958)22 CFR part 120.1 Implements that Authority in the International Traffic In Arms Regulations“The ITAR”Property of Compliance Assurance LLC

3. Property of Compliance Assurance LLCInternational Traffic In Arms (ITAR)What Exactly is a Defense Article or Service?Part 120.2 – Items designated on the U.S. Munitions List (USML) as specified in part 121 of the ITARProperty of Compliance Assurance LLCProperty of Compliance Assurance LLC

4. Property of Compliance Assurance LLCUSML CategoriesI - Firearms

5. II – Guns and Armament

6. III – Ammunition/Ordnance

7. IV - Launch Vehicles, etc.

8. V - Explosives, Propellants, Incendiary Agents and Their Constituents

9. VI - Vessels of War and Special Naval Equipment

10. VII - Tanks and Military Vehicles

11. VIII - Aircraft and Associated Equipment

12. IX - Military Training Equipment

13. X - Protective Personnel Equipment

14. XI - Military Electronics

15. XII - Fire Control, Range Finder, Optical and Guidance and Control Equipment

16. XIII – Auxiliary Military Equipment

17. XIV - Toxicological Agents and Equipment and Radiological Equipment

18. XV - Spacecraft Systems and Associated Equipment

19. XVI - Nuclear Weapons Design and Related Equipment

20. XVII - Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated

21. XVIII – Directed Energy Weapons

22. XIX - Reserved

23. XX - Submersible Vessels, Oceanographic and Associated Equipment

24. XXI - Miscellaneous ArticlesProperty of Compliance Assurance LLCProperty of Compliance Assurance LLC

25. Property of Compliance Assurance LLCInternational Traffic In Arms (ITAR)What Exactly is a Defense Article or Service?Part 120.3(a) - “is specifically designed, developed, configured, adapted, or modified for a military application, and Does not have predominant civil applications, andDoes not have performance equivalent (defined by form, fit and function) to those of an article or service used for civil application;”Property of Compliance Assurance LLCProperty of Compliance Assurance LLC

26. Property of Compliance Assurance LLCInternational Traffic In Arms (ITAR)What Exactly is a Defense Article or Service?Defense ArticlesAny item or technical data designated on the USML

27. Includes technical data recorded or stored in any physical form, models, mock-ups or other items that reveal technical dataDefense ServicesFurnishing assistance including training, to foreign persons in the U.S. or abroad

28. Military training of foreign units and forcesProperty of Compliance Assurance LLCProperty of Compliance Assurance LLC

29. Property of Compliance Assurance LLCScope of Export ControlsWhat Items Are Controlled under the ITAR?Essentially, any item specifically designed for military purpose is controlled… down to the smallest part

30. If any component is ITAR-controlled, then the equipment on which installed is also ITAR-controlled (see through rule)

31. Purpose for which it is now being used is irrelevant

32. E.g. Military aircraft (C-130) being used for cargo planeProperty of Compliance Assurance LLC

33. Property of Compliance Assurance LLCInternational Traffic In Arms (ITAR)What is a Broker (Part 129)?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.Brokering Activity is Controlled Under the ITAR!Does not apply to domestic sales or transfersProperty of Compliance Assurance LLCProperty of Compliance Assurance LLC

34. Property of Compliance Assurance LLCBenefits of Being ITAR CompliantITAR Requirement to Participate in Defense Article Manufacturing (Even Just Once!)Demonstrates to Defense Contractors and Customers That You Are a Legitimate PartnerLike ISO / six sigma demonstrate commitment to quality

35. Often required part of prime contractor’s programProtects Your Company From Fines, Penalties and Negative PublicityProperty of Compliance Assurance LLC

36. Benefits of Not Being ITAR CompliantJoseph Piquet, Port St. Lucie, FLConvicted 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)Submitted false End Use Certificates to the manufacturer (NGC)Sentenced to 5 years in prisonTwo years supervised release (after prison term)Free Room and Board!Property of Compliance Assurance LLC

37. Senior Management ResponsibilityProperty of Compliance Assurance LLC

38. Senior Management ResponsibilityKeep Your DDTC Registration Current

39. Officers, addresses/locations, contact numbers

40. Sign Registration Statement and Transmittal Letters

41. Confirm Which Senior Officer Listed on the Registration Statement Will Oversee the Compliance Program

42. Designate and Provide DDTC list of Full-time Employees Who Serve as “Empowered Officials”

43. Provide names and contact infoProperty of Compliance Assurance LLC

44. Senior Management ResponsibilityMaintain Records of Manufacture, Acquisition and Disposition of ‘Defense Articles and Services’Maintain Records of Political Contributions, Fees and Commissions Furnished or Obtained Ensure That Managers, Supervisors and Employees Receive Training on AECA and ITAR RequirementsEnsure That Employees Understand the Ramifications For Failure to Comply With the Regulations Property of Compliance Assurance LLC

45. Senior Management ResponsibilityProperty of Compliance Assurance LLCAnd If We Don’t…The Ultimate Responsibility Belongs to Senior Management!

46. Who Is Your Empowered Official?U.S. Person directly employed in a position having authority for policy or management; and

47. Legally empowered to sign license requests or other requests for approval

48. Understands the provisions and requirements or statutes and regulations

49. Has the independent authority to:Inquire into any aspect of a proposed transaction Verify the legality of the transaction and accuracy of info to be submittedRefuse to sign any license application or other request for approval without prejudice or other adverse recourseProperty of Compliance Assurance LLC

50. How Do We Ensure Compliance?Property of Compliance Assurance LLCSenior Management Is Responsible But Does Not Manage the Day-to-day Activities…Must Have a Comprehensive Export Compliance Program!

51. Refer to the Compliance Guide Sent with RegistrationProperty of Compliance Assurance LLCWhat Are the Key Elements of an Effective Compliance Program?(1) Organizational StructureCorporate Commitment and PolicyID, Receipt & Tracking of ITAR Controlled ItemsRe-export / Re-transfer ProcedureRestricted/Prohibited Exports & Transfers Recordkeeping Internal Monitoring & AuditingTrainingNotification & Escalation PolicySource: U.S. Dept. of State, Bureau of Political Military AffairsProperty of Compliance Assurance LLCProperty of Compliance Assurance LLC

52. Property of Compliance Assurance LLCWhat Makes and Effective Compliance Program?An effective export management and compliance program includes adherence to a set of operational compliance policies, procedures, and safeguards 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: What should happen, does happen and What shouldn’t happen, doesn’t happen …on a daily basis.Source: Bureau of Industry and SecurityProperty of Compliance Assurance LLCProperty of Compliance Assurance LLC

53. Property of Compliance Assurance LLCHave Questions? Give Me a Call:www.WeAreCompliant.comProperty of Compliance Assurance LLCProperty of Compliance Assurance LLC