If your business is engaged in the defence industry or is involved in the exchange of documents containing arms trade information, you should remember that there are certain laws that you have to abide by to make your operations compliant or legal. Now, one of these regulations that you should know about is the International Traffic in Arms Regulation (ITAR).
In this article, you will learn what exactly this regulation is and how to be compliant with it.
- 1 What Is ITAR
- 2 Complying with ITAR: Steps to Take
- 3 Final Thoughts
What Is ITAR
The ITAR is a set of regulations put in place by the US Department of State to control the exportation and importation of military-related products specified on their United States Munitions List (USML). Fundamentally, its goal is to govern the manufacture, sale, and distribution of such articles to ensure national security. While this conjures images of missiles and heavy artillery (which are, of course, included in the list), the regulation actually covers more items, such as electronics, chemicals, and even satellites.
Not only that, but ITAR also governs all information related to the creation of these products. These include diagrams, photographs, videos, and other related documentation. For this reason, all businesses engaged in the arms trade with the US are also required to have military grade encrypted file sharing solutions in place to protect their data.
Which Businesses Are Required ITAR Registration
Basically, the International Traffic in Arms Regulation states that only US-based businesses are allowed to engage in the manufacture and selling of items specified on the USML. And, these businesses include:
Contractors and subcontractors
Hardware and software vendors
However, there is an exemption to that rule for specific purposes. There are other nations having standing agreements with the country, such as the UK, Canada, and Australia, so they are also allowed to deal with the US for arms trade, given that they stay compliant with ITAR policies.
It is important to remember that the fines for violating ITAR are hefty, which can run from $500,000 to $1,000,000. Not only that, but non-compliance can also lead to civil and criminal sanctions, which include imprisonment of up to 10 years. So, you should make sure you are compliant with such regulations to avoid these unfavourable situations.
Complying with ITAR: Steps to Take
ITAR covers a broad spectrum of information, which makes it daunting for a person who has not been familiar with it. Here is a guide that you can follow.
1. Double-check jurisdiction
First, you should determine if your products are on the USML. If so, you must be registered with the US State Department and apply for a licence before you can start importing or exporting.
2. Review the ITAR policies
Once you have confirmed that your products fall under the jurisdiction of ITAR, you need to understand how they are designated and controlled by the government. This set of policies is divided into several parts, so take the time to review it.
3. Register your business with the Directorate of Defense Trade Control (DDTC)
The application process starts by registering your business with the DDTC. During this step, you will have to:
Pay the fee for registration.
Present supporting documents.
Complete and upload the given registration form.
The average time for an application to be reviewed and approved is 45 days.
4. Apply for a licence
You need to be granted a licence before you can start exporting or importing products specified on the USML. You can gather the information you need for this step on DDTC’s official website as well.
5. Set up a file-sharing system that is compliant with ITAR
Being registered and having a licence, alone, does not mean that you are done. The DDTC still requires you to have a government encrypted file sharing platform to be fully compliant. As previously mentioned, one of the primary goals of ITAR is to avoid leaking sensitive defence-related information to the wrong hands, so this is a requisite.
6. Create a compliance programme
Though this is not a mandated step, having a solid compliance programme ensures that everyone in your organisation will not be side-tracked in keeping your processes compliant with ITAR.
When creating such a programme, make sure it is clearly documented and conforms to your business needs. It should also be reviewed and updated on a regular basis and supported by your management team.
Along with having a secure business file sharing platform, this strengthens your efforts in protecting sensitive technologies that your business is handling.
Abiding by the policies stipulated in the International Traffic in Arms Regulation not only offers lawful benefits to your business. It also helps you attain more success in distributing defence products. Basically, it boosts your qualification in engaging in such trade while giving you leverage over others in a fiercely competitive market.
So, take the time to reassess your business and take the necessary steps to comply with this set of regulations.
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