What is ITAR Certification

Narendra Kumar

22 May, 2019

International Traffic in Arms Regulations (ITAR certification) regulates and controls the export and import of defense-related material and services that are listed on the United States Munitions List (USML). It is a set of rules and regulations that have been set by the government of the United States. Within the US, these regulations are interpreted and enforced by the Department of State and through these regulations; it aims to safeguards the national security and foreign policy objectives of the United States.

In the United States, any person who engages in the business of manufacturing or exporting defense articles or engages in defense services is required to obtain his ITAR registration as per the Arms Export Control Act (AECA). In fact, without registration, no application for an export license or other relevant approvals from the Directorate of Defense Trade Controls (DDTC) is allowed or use of export exemptions is entertained.

Who does the ITAR apply to?

The ITAR certification applies to manufacture, sale, and distribution of arms-related technology. It finds application in the military industry. All manufacturers, brokers, and exporters of defense materials or services or relevant data have to be ITAR compliant. As a result, most of the companies in this sector require their supply chain to Beitar compliant as well.

What does ITAR Certified mean?

It means –

1. The company must be registered with the State Departments’ Directorate of Defense Trade Controls (DDTC).
2. It must abide by the ITAR regulations for the USML linked products and services.
3. Finally, they certify that they are ITAR compliant and are operating as per mentioned regulations.

The individual organization needs to not only understand but also be trained in ITAR regulations because any kind of violation will lead to penalties and also being barred from carrying out the export business of the said items in the future.

It is a mandatory registration for all organizations dealing in arms transfer. In case of non-compliance, defaulters are penalized with heavy fines and even put behind bars. The department is strict in handing over punishments to US persons and organizations that provide foreign person’s access to ITAR-approved defense articles, services, and technical data related to the same. Civil fines up to $500000 per violation are charged and criminal fines are about $ 1000000 and about 10 years of imprisonment per violation.

In a nutshell, ITAR is all about:-

1. Military and defense items
2. It is a regulation meant for articles and technology that is meant to kill or defend in wars, insurgencies, terrorist attacks or any other form of military setting
3. It encompasses space-related technology too as missile technology is part of the defense as well as space industry.
4. The scope of ITAR includes technology and technical data related to defense articles
5. The regulations and licensing rules demand strict adherence
6. The ITAR is not meant for commercial or research related objectives

What is the Objective of ITAR Certification?

One of its main aims is to prevent disclosure or transfer of sensitive information to foreign nationals. The regulation strictly prohibits the disclosure or sharing of information and material pertaining to defense and military technologies, especially for items listed on the US Munitions List with any non-US person until and unless authorized by the Department of State or a special exemption have been applied for. The ITAR is a means by which the DDTC ensures that the commercial export of defense articles and services are consistent with the country’s national security policy.

In such a scenario it is a challenge for defense-related companies that are operating at a global level where certain information or data related to their area of work may be needed to be transferred over the internet.

Specifications of ITAR

• Part 120 defines the purpose and provides a definition of the regulation
• Part 121 contains the detailed United States Munitions List
• Part 122 is the manual for registration of manufacturers and exporters
• Part 123 explains the process for obtaining a license for the export of defense articles
• Part 124 mentions about agreements, off-shore procurement, and other defense services
• Part 125 talks about licenses required for the export of technical data and classified defense articles
• Part 126 is about General Policies and Provisions
• Part 127 focuses on Violations and Penalties
• Part 128 is about administrative procedures
• Part 129 details out the registration and licensing procedure of brokers
• Part 130 is about political contributions, fees, and commissions

Some of the specifications are detailed out here:-

Section 122.5 of this certification standard requires the organization to maintain records of its registration, and these records should be made available at all times for inspection and copying by customs officials or representatives from the United States Department of State. As per this section, it is also mandatory for organizations to maintain records of manufacture, acquisition, and disposition of defense articles.

Part 130 of the standard mentions that it is required for the organization to maintain and record information related to commissions given or accepted, political contributions and fees.

Section 122.5 also mentions that such record pertaining to below-mentioned clauses also needs to be maintained:-

1. Details of the key senior officer whose name has been listed on the registration responsible for overseeing the entire compliance system;
2. List of empowered officials who are the direct employees of the organization and are qualified enough to hold the position. Details that need to be included in the list are – name, designation, business unit, phone number, fax numbers, and email address. It is also mentioned clearly that representatives from the third party like contractors; consultants etc cannot become empowered officials for the organization.

Certified bodies that train organizations on ITAR regulations have different modules for US companies and non-US companies. This is so because the focus of the US rules will vary depending on the place of location of the company.

ITAR Compliance Process

As per US laws, all organizations that are involved in any kind of manufacturing, exporting or brokering defense-related products or services need to register with the Directorate of Defense Trade Controls. This means that the government should have information on any kind of activity that is related to defense in the country. While registration is not a guarantee that the organization will get the export license or other approvals, it is a precondition for issuance of license and approvals. All licenses are valid for a period of 12 months from the date of issue.

The license is issued or approval is obtained by following few simple steps:-

1. The first step in the compliance process is to download the document ‘Getting started with Defense Trade’. This is to check if the controls related to defense export are relevant to the organization and then check if any particular product of the organization is covered under the USML.
2. If the product is part of the ten specified categories in the USML, the next step is to review the required documents for registration as mentioned in Part 122.1 of ITAR certification. Then submit the registration statement as per Part 122.2 and pay the fee as per Part 122.3. It is important that these steps be done correctly the first time itself. Registration fees are non-refundable.

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