Washington DC General Assembly

dotardhousesΜηχανική

18 Νοε 2013 (πριν από 3 χρόνια και 6 μήνες)

74 εμφανίσεις

Company Confidential

1

Surviving US Export Control

regulations:

The ITAR and EAR


Don Buehler
-

SAE

April 16, 2010

IAQG Workshop:

Washington DC General Assembly

2

Topics we will cover:


Why should aerospace companies
care?


How does the US government
control exports?


How are companies affected by
these laws?

3

Why should aerospace companies care?

1.

Most aerospace companies

work on U.S. origin items

2.

Many of these items are

restricted by US Export laws

and regulations

3.

The laws and regulations apply

to
all companies or individuals

who have possession of

restricted items

4

Why should aerospace companies care?

4.

Aerospace companies and

individuals are regularly

prosecuted


fined or debarred

for violations of the laws and

regulations

5

EXAMPLES:

1.

DHL fined $9.44 million

DHL Owned by: Deutsche Post
World Net / Deutsche Post DHL


a German company

This was the largest fine in history
for a freight forwarder.

Their violations: primarily record
keeping (Aug 2009)

6

EXAMPLES:

2.

Thermon Mfg Co fined
$176,000

Three affiliates (in India & the UK)
committed 33 violations


re
-
exporting restricted items
without a license and exporting
to embargoed countries and to
debarred companies


(Sept 2009)

7

EXAMPLES:

3. Quoptiq fined $25 Million


A Luxembourg LLC


163 violations of the ITAR


Exported night vision
technology without proper
licenses to various European
and Asian companies


(December 2008)

8

8

8

Between June 1999 and January 2004,
Bass Pro, Inc. exported gun sights to a
variety of destinations without a license in
violation of the EAR.


Gun sights are controlled pursuant to U.S.
treaty obligations, as well as for human
rights and anti
-
terrorism reasons.


Bass Pro agreed to pay an administrative
penalty of $510,000.




4. Bass Pro Shops fined

Violation: Gun Sights

EXAMPLES:

TFC Mfg


aerospace fabrications
company


TFC Manufacturing, Inc. The Violation:
Between March and April 2006, TFC
Manufacturing, Inc. (TFC), a Lakewood,
California
-

based aerospace fabrication
facility,
released U.S
-
origin technology
for
the production of aircraft parts (classified
under ECCN 9E991) to an Iranian national
employee in the U.S. without the required
license under the EAR. The Penalty:TFC
agreed to pay a $31,500 administrative
penalty.

9

EXAMPLES:

10

10

EAR


Civil penalties may be the greater of
$250,000 or twice the value of the
transactions



Criminal violations may be up to
$1,000,000 and/or 20 years
imprisonment


ITAR


Civil fines up to $500,000 per violation



Criminal fines up to $1,000,000 per
violation and/or 10 years
imprisonment

Maximum Penalties

11

The question:



Does your company work on U.S. origin

products or have possession of US

technical data?



Does your company understand the US laws

and regulations?



Is your company vulnerable to violations?

The purpose of this presentation is to raise
your awareness of the laws and regulations
which may be affecting your company right
now


and to give you some basic
information on the regulations.

12

The BASICS


There are two major regulations
which affect US exports:


-

The International Traffic in Arms

Regulations (22 CFR Chapter I,

Subchapter M)
-

ITAR

And



-

The Export Administration

Regulations (15 CFR Part 700



799
)
-

EAR


13

The BASICS
-

ITAR



The ITAR is administered by the
US Department of State


Office:
Directorate of Defense Trade
Controls

(DDTC)



The ITAR controls defense
articles and defense services
which are listed on the United
States Munitions List (USML)



(Part 121)



14

14

The United States

Munitions List (USML) (Part 121)


Category I

Firearms, Close Assault
Weapons and Combat
Shotguns

Category VI


Vessels of War and Special
Naval Equipment

Category II

Guns and Armament

Category VII

Tanks and Military Vehicles

Category III

Ammunition/Ordnance

Category VIII

Aircraft and Associated

Equipment

Category IV

Launch Vehicles, Guided Missiles,
Ballistic Missiles, Rockets,
Torpedoes, Bombs and Mines

Category IX

Military Training Equipment

and Training

Category V

Explosives and Energetic Materials,
Propellants, Incendiary Agents and
Their Constituents)


Category X

Protective Personal Equipment
and Shelters


15

15

The United States

Munitions List (USML) (Part 121)


Category XI

Military Electronics

Category XVI

Nuclear Weapons, Design and
Testing and Related Items

Category XII

Fire Control, Range Finder,
Optical and Guidance and
Control Equipment

Category XVII

Classified Articles, Technical
Data and Defense Services Not
Otherwise Enumerated

Category XIII

Auxiliary Military Equipment

Category XVII

Directed Energy Weapons

Category XIV


Toxicological Agents, Including
Chemical Agents, Biological Agents,
and Associated Equipment

Category XIX
Reserved
Category XX

Submersible Vessels,
Oceanographic and Associated
Equipment

Category XV

Spacecraft Systems and
Associated Equipment


Category XXI

Miscellaneous Articles

16

16

ITAR Licensing


If the item you are exporting

has been designed for a military

application


And


is listed on the USML


you will have to get a license for the export

(unless there is an exemption)

17

DDTC registration requirement


Does your company work on defense
items or perform defense services (as
described in the United States
Munitions List)?



If so, your company
is required

to be
registered with the U.S. Department
of State, Directorate of Defense Trade
Controls (DDTC).



Refer to Section 122 of the ITAR

18

The BASICS
-

EAR



The EAR is administered by the
US Commerce Dept


Office:
Bureau of Industry & Security
(BIS)



The EAR controls commercial
and “dual use” (commercial and
military use) items and
technology which are listed in
the Commerce Commodity List
(part 774)

19

19



Includes five product groups



Extensive system for classification
of products


Export Control
Classification Numbers (ECCNs)



Complex rules about what requires
a license (depends on product,
technology and end use)

The Commerce Control List (CCL)

Part 774 of the EAR

20

20


The purpose of the ECCN is to
clearly identify the component,
material, or technology so that
proper licenses, restrictions
and exemptions may be
applied.



If you are going to export items
under the EAR, knowing the
ECCN is critical.

Export Control Classification Numbers

(ECCNs)

21

9A991

Aircraft and gas turbine engines not
controlled by 9A001 or 9A101



9A992

Complete canopies, harnesses and
electronic release mechanisms

Examples of ECCNs

22

The BASICS



What do we mean when we say

restricted item
?”


This a general term we use to
describe
products, goods, technical
data, software , and technology
which
is under some kind of restriction by
any of the US laws


It does not just refer to parts and
products being shipped outside the
US

23

23

23


Any item

sent from the United States to
a foreign destination (company or
person) is an export. All items leaving
the United States are exports and,
therefore,
may

be subject to controls
and restrictions.


Items include
hardware

(parts,
materials, sub assemblies),
information

(drawings, specifications, test data,
calculations)
software

and
technologies

(e.g., composites).


We use “item” to refer to all three categories (hardware,
information or technologies).

What is an export?

24

24

24

Exports can be …



physical

(sending items to a
foreign country or person)


verbal

(telling someone
information about a controlled
item)


visual

(a non U.S. person sees
controlled items


even if they
see them on your laptop in a
public place)

How can items be exported?

25

25

Not an export

The shipment or transmission of
restricted items subject to the ITAR or
EAR from one U.S. person to another
U.S. person is not an export. (As long
as the “receiving person” is not
employed by a foreign company.)


U.S. Person


U.S. Person

26

26

26

Export Examples

The shipment or transmission of
restricted items subject to the ITAR
or EAR from a U.S. Person (company)
to a Foreign Person (company).


U.S. Company

French company

27

27

27

Re
-

Export Example

The shipment or transmission of
items subject to the ITAR or EAR
from one Foreign Person
(company) to another.

Germany

Japan

U.S.A.

EXPORT

RE
-
EXPORT

28

28

28

Re
-

Transfer Example

The shipment or transmission of
restricted items subject to the ITAR
or EAR from one Foreign Person
(company) to another Foreign
Person (company) within the same
country.


Company A

(Germany)

Company B
(Germany)

U.S.A.

EXPORT

RE
-
TRANSFER

29

29

29

Deemed Export

The shipment or transmission of
restricted items subject to the ITAR
or EAR from a U.S. Person
(individual) to a Foreign Person
(individual).

U.K.
Citizen

U.S.
Citizen

(or green card
holder
)

EXPORT

30

30

30

Restriction: license

If the item in any of the previous
examples is restricted by the ITAR
or the EAR, a license may be
required for the transaction.


Granting (or denying) licenses for
the export, re
-
export, or re
-
transfer
of restricted items is the
first way
that the laws control exports.

31

31

31

Restriction: embargoed countries &

denied parties

The
second major
way that the US
government controls exports is
through lists of countries,
companies, and individual citizens
who are not allowed to engage in
exports of US items.

We refer to these as “denied
parties”

32

32

32

Denied Parties lists

Numerous Governmental agencies
have “denied parties” lists. The
major lists are maintained by DDTC;
BIS and OFAC (Office of Foreign
Assets Controls)

OFAC is the office in the Treasury
Department which maintains a
variety of lists including embargoed
countries.

Lists to check

ITAR embargoes

OFAC lists

35

36

36

36

They are serious!

A 5 person company


East Ways
Shipping (a NY based freight
forwarder) was fined $70,000 by
the BIS for the shipment of 3 orders
of scrap metal to a company listed
on one of BIS’s entity lists.

(August 2009)

37

37

37

So what should you do?


Learn More


Do some research into the regulations


Find out your vulnerability to violations


Evaluate Your current work


Is it covered by one of the US regulations?


Do we export these items in any way?


Discover your vulnerabilities to violations


Develop and Implement a Compliance
System


Train Employees


Market Your System

38

For more information:


GO to any of the 3 public web sites:


ITAR (DDTC)
http://www.pmddtc.state.gov/index
.html


EAR (BIS):
http://www.bis.doc.gov/


OFAC
http://www.treas.gov/offices/enfor
cement/ofac/


39

39

39

QUESTIONS?

Send your questions to Don Buehler
donb@exportsolutionsinc.com

and I will be glad to address them.

Or call me at

513
-
662
-
5190 (US office)

Or 513
-
305
-
7493 (mobile)

40

40

40



Thank you for attending

The IAQG workshop on

Export Control.

We hope you enjoy your time in

Washington.