This document provides an overview of export compliance requirements for US companies. It discusses the roles of the Departments of State and Commerce in regulating exports, defines key terms like defense articles and foreign persons, and outlines responsibilities for technical staff, licensing administrators, and empowered officials. It also covers processes for classifying, labeling and shipping exports according to ITAR or Commerce controls. The presentation warns that penalties for noncompliance can include heavy fines, loss of security clearances, and imprisonment, as recent cases involving large defense contractors demonstrate. Overall, the document stresses the legal necessity of following all US export laws and an organization's own compliance policies.

1. EXPORT COMPLIANCE
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2. AGENDA
• Purpose
• Exporting Basics & Key Definitions
• Export Responsibilities
• Classifying, Labeling and Shipping products
• Automated Export System (AES)
• Penalties
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3. PURPOSE
• To be compliant with U.S. Laws. Non-compliance = high cost
• Provide exporting basics and describe the role of employees in an
organization
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4. EXPORTING
• Department of State
– International Traffic in Arms Regulations (ITAR) – U.S.
Munitions List
– Military
– Protects defense related information and items on the
U.S. Munitions List
• Department of Commerce
– Commerce Control List
– Dual Use
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5. DEFENSE ARTICLES
• Any article designed, built or modified for a specific military
application
• Items located on the U.S. Munitions List (USML)
• Includes: technical data recorded or stored in any physical
form, models, or mockups or other items that reveal
technical data directly related to the USML
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6. FOREIGN PERSON
• Any person who is not a lawful permanent resident as defined by 8 U.S.C.
1101 (a)(20) or who is not a protected individual as defined by 8 U.S.C.
1324b (a)(3)
• Includes: Non – U.S. citizen employees of a U.S. company, as well
as foreign national employers of overseas offices. Transfer of
defense articles/services/data to these individuals requires prior written
government approval
• Includes: Foreign corporations, business associations, partnerships, trust,
society or any other entity or group that is not incorporated or organized to
do business in the U.S., as well as international organizations, foreign
governments, and any agency or subdivision of foreign governments
• An organization’s affiliate/subsidiary, located outside of the U.S., is
considered a foreign company under ITAR
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7. DUAL USE
• Technical data or hardware which can be used
interchangeably for both military and commercial
applications
• Built with no particular military function, but may
have a potential military application
• Example: computer, jeeps, trucks, lighter aircraft
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8. WHAT IS AN EXPORT?
• Sending or taking a defense article out of the U.S. in any manner, except
by mere travel outside of the U.S. by a person whose personal knowledge
includes technical data; or
• Transferring registration, control, or ownership to a foreign person of any
aircraft, vessel, or satellite on the U.S. Munitions List, whether in the U.S.
or abroad; or
• Disclosing (including oral or visual) of or transferring in the U.S. any
defense article to an embassy, any agency or subdivision of a foreign
government; or
• Disclosing (including oral or visual) of export controlled information
(technical data or technology) to a Foreign Person in the U.S. or abroad
• Performing an ITAR controlled defense service for a foreign person,
whether in the U.S. or abroad
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9. EXAMPLES OF EXPORTS
• Physical shipments across U.S. border
• Emails, faxes, phone calls to foreign persons
• Hand carrying papers or laptops containing
technology overseas
• Demonstrations, meetings and training of foreign
persons in the U.S. or abroad
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10. EXPORT RESPONSIBILITIES
• Export compliance is the responsibility of all
employees and includes:
• Empowered Officials
• Technical Staff
• Licensing Administrators
• Property
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11. RESPONSIBILITIES OF
TECHNICAL STAFF
• Prior to exchanging information, shipping
hardware or entering into an agreement with a
foreign company or person, contact the individual
responsible for export compliance in your
company (i.e. Licensing Administrator)
• Provide Licensing Administrator with the
Statement of Work or description of discussions to
be held with foreign consultants or organizations.
Licensing Administrator will review the U.S.
Munitions List and the Commerce Control List and
provide direction
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12. LICENSING ADMINISTRATOR
RESPONSIBILITIES
• Review the SOW or discussions topics and
categorize into one of the following:
a) U.S. Munitions List
b) Commerce Control List
c) Commercial
• Notify PM/Requestor via email of licensing
determination.
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13. EMPOWERED OFFICIALS
• Responsible for ensuring company wide
compliance with all U.S. Government rules and
regulations
• The organization’s signature authority with the
Government (Executive Management)
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14. PROPERTY
• Needs to be aware of international shipping
requirements
• Follow your organization’s policy and procedures
for shipping international packages.
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15. CLASSIFYING, LABELING AND
SHIPPING
• Classifying - Each shipment that is sent
internationally must be identified as ITAR,
Commerce or commercial by the Licensing
Administrator.
• Labeling - Once an item is properly classified, it
must be labeled. To ship an item outside the
country that falls under ITAR or Commerce, a
license or an exemption is required.
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16. CLASSIFYING, LABELING AND
SHIPPING
• License – Utilized for export of hardware and/or
specific identifiable documents; discussion of
those documents without elaboration
• Exemption – Allows export without a license or
agreement
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17. CLASSIFYING, LABELING AND
SHIPPING
• Best practice is to use a trusted freight forwarder
to send the international shipment.
• It is important to use a trusted freight forwarder,
because any mistake they make in filing
paperwork or dealing with customs is a reflection
of your company and you can still be fined for
their mistake.
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18. Automated Export System (AES)
• System used by U.S. exporting to electronically
declare international exports to the Customs and
Border Patrol (CBP) for both ITAR and Commerce.
• Any item located on the U.S. Munitions List must
be filed via AES prior to shipment regardless of
dollar value.
• http://www.aesdirect.gov/
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19. PENALTIES
• Penalties for failure to comply with U.S. Export
Controls are:
a) Heavy Fines
b) Loss of Security Clearances
c) Imprisonment
d) Revoking of Export Privileges
e) Debarment
f) Customs seizing shipment
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20. PENALITIES (Cont.)
• Recent ITAR violation fines:
a) Raytheon - $25 million
b) Lockheed Martin - $13 million
c) Boeing - $15 million – article attached in appendix
d) ITT - $100,000,000 – article attached in appendix
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21. PENALTIES (Cont.)
• An individual may be fined up to $1 million, imprisoned up
to 10 years, or both
• Organization may be denied export privileges and fined
$1 million for each offense
• Organization may be denied the privilege of doing business
with the U.S. Government
• Organization might incur substantial negative publicity
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22. SUMMARY
• Export compliance is the law
• Follow your organization’s policies and procedures in
regards to export compliance.
• If you have any questions, contact your organization’s
representative who handles export compliance issues for
further guidance.
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23. THANK YOU FOR ATTENDING
ANY QUESTIONS?
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