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2. OVERVIEW of the U.S. DEPARTMENT OF STATEEXPORT REGULATIONS. 3. Discussion Agenda . ITAR Trade TermsRegulatory Oversight
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1. 1 GETTING STUFF FROM HERE TO THERE MANAGING THE WORLD OF EXPORTS
2. 2
3. 3 Discussion Agenda ITAR Trade Terms
Regulatory Oversight & Reasons for Control
Key Terms/Definitions
Warning Flags
Primary ITAR Differences/The ITAR
Exportation: AES
INCOTERMS/Valuation of Exports
4. 4 U.S. Government Policy “It is the policy of the United States Government to control the import and export of arms, ammunition and implements of war”
(1976 AECA 22 USC 2778)
It is unlawful to attempt to export any defense article, defense service or technical data without a license
It is unlawful to import any defense article without a license
It is unlawful to violate the terms or conditions of a license (e.g. provisos)
5. 5 Reasons for Export Compliance Protect U.S. National Security
Safeguarding American technology (defense & dual-use articles)
Comply with regulations and prevent ITAR and EAR violations
To continue to conduct business in the USA
Advance National Objectives & Foreign Policy Goals
Through defense trade controls and policies
6. 6 Export Control Why U.S. Has Export Controls
To protect its technological advantage
To protect against revelation of and providing the means to exploit its technologies
To protect short supply interests
To prevent proliferation of Toxins & WMD
Key Technologies to Protect
Unmanned Aerial Vehicles
Night Vision
Precision Guided Munitions
Stealth & Advanced Composites
Missile Technologies
Networked Centric Warfare
Space Capabilities
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9. 9 The U.S. Government is here to help you manage the world of international trade with the following regulations:
19 CFR Parts 1-199 (Customs)
15 CFR Parts 730-774 (BIS - EAR)
22 CFR Parts 120-130 (State - ITAR)
15 CFR Part 30 (Census - AES/SED)
27 CFR Part 447 (ATF&E – USMIL)
10. 10 Differences: ITAR & EAR ITAR:
Covers military items (munitions/defense articles)
Includes most space related technologies due to application to missile technology
Includes technical data related to defense articles and services (furnishing technical assistance including design, engineering and use of defense articles)
Very strict, not much latitude, few exemptions
11. Differences: ITAR & EAR EAR:
Regulates “dual use” items = 10 CCL categories of different technologies (equipment, tests, materials, software and technology)
Regulates items designed for commercial purposes but that can have military applications (computers, pathogens, civilian aircraft, etc.)
Covers goods, test equipment, materials and the technology (technical data and technical assistance) and software
Covers “re-export” of foreign commodities incorporating U.S. origin controlled items outside the U.S.
DOC easier to work with—more exemptions available
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12. 12 Warning Flags US export control laws require documentary evidence concerning the transaction. The misrepresentation or concealment of material facts is prohibited, both in the licensing process and in all export control documents.
State Department/Commerce have developed a series of warning flags for suspicious activities
Customer, end-user, and shipment flags
If these flags appear, personnel should be especially cautious in verifying end-user and end-use information
13. 13 Warning Flags End-User “Red Flags”
Requested equipment does not match the known requirements or inventory of foreign end-user
Requests for spare parts exceed projected needs or are for systems not in the foreign end-user’s inventory
End-use involves private use of significant amounts or types of military hardware
Performance/design requirements are incompatible with the foreign end-user’s resources or environment, of with the foreign consignee’s line of business
Stated end-use is incompatible with the customary or known applications for the articles being purchased
14. 14 Warning Flags Customer “Red Flags”
Customer or purchasing agent is reluctant to provide foreign end-use/end-user information
Customer is willing to pay cash for article/item
Little or no customer business background is available
Customer appears to lack familiarity with the article’s performance and design characteristics or uses
Customer or purchasing agent refuses installation or service contracts that are normally accepted in similar transactions
15. 15 International Traffic in Arms Regulations 22 CFR Parts 120-130
Provides purpose and concise definitions: hardware, technical data, etc
Identifies articles controlled via the U.S. Munitions List
Commodity Jurisdiction
Requires registration and certification of US company and certain staff
Identifies license, agreements, off-shore procurement, and defense service requirements for hardware and technical data: DSP5, DSP73, Technical Assistance Agreement
16. 16 Administered by the U.S. Department of State and indirectly by the DOD Defense Technology Security Administration (“DTSA”)
Applies to exports of arms, ammunition, and implements of war on USML (hardware, technical data, and services)
Enforced by the U.S. Customs Service, U.S. Postal Service, and Treasury Department
Controls foreign reexports of the following:
All U.S. origin products and technical data
All U.S. origin parts and components incorporated into foreign materials
Foreign manufactured products using US origin technology
International Traffic in Arms Regulations
17. 17 ITAR Denial/Embargoed Countriesas of 03/25/09 ITAR 126.1 denial list includes Belarus, Cuba, Iran, North Korea, Syria, Venezuela and Vietnam, and imposes embargoes with Burma, China, Liberia, Somalia and Sudan, Sri Lanka, Afghanistan, Cote d’Ivoire, Cyprus, Dem. Republic of Congo, Iraq, Lebanon, Libya, Haiti, Eritrea, Sierra Leone, Yemen, Zimbabwe
The EAR identifies countries in Part 746 – different structure from the ITAR 126.1
18. 18 NON-DIVERSION STATEMENTS In order to protect an exporter from penalties due to shipment diversion to restricted destinations, all export invoices, bills of lading and packing lists are to incorporate a non-diversion statement.
There are two different statements depending upon which Department (State or Commerce) controls the export.
15 CFR Part 758.6 of the EAR (the Commerce version) states:
“These commodities, technology or software were exported from the United States in accordance with the Export Administration Regulations. Diversion contrary to U.S. Law prohibited”
Exporter may add additional language – this is a minimum guideline
19. 19 Non-Diversion Statements Per 22 CFR 123.9(b), the ITAR (State Department version) states:
“These commodities are authorized by the U.S. Government for export only to (country of ultimate destination) for use by (end user). They may not be transferred, transshipped on a non-continuous voyage, or otherwise be disposed of in any other country,either in their original form or after being incorporated into other end-items, without the prior written approval of the U.S.Department of State.”
Exporter may add additional language – this is a minimum guideline
20. 20 EXPORT DECLARATION As of 9/29/08, all exports from the US must be filed via the AES or Automated Export System EDI. As of this date, all paper export filings (SEDs) are forbidden.
Each accepted AES transaction file will have an ITN or International Transaction Number assigned to it which must be placed on the commercial invoice and bill of lading of the shipment being exported.
21. 21 Automated Export System (AES) Facts** U.S. Census Bureau/Customs & Border Protection (“CBP”) computerized system for tracking and controlling cargo export information (replacing Shipper’s Export Declaration-SED)
AES interfaces with other federal agencies
Allows CBP to monitor and enforce compliance with export laws and regulations
Currently all exports must be filed through AES
USML and CCL articles submitted through AES regardless of dollar value
22. 22 Export Clearance Transport Cutoff Times*: Mode & Jurisdiction
23. 23 DISCUSSION ISSUES RECORDKEEPING, DUE DILIGENCE
DENIED PARTY SCREENING
COMPLIANCE POLICY/PROCEDURES
CORPORATE POLICY STATEMENT
VISITOR CONTROL
COMMUNICATIONS CONTROL
ORDER PROCESSING PROCEDURE
SCHEDULE B
24. 24 DISCUSSION ISSUES CONSCIOUS OVERSIGHT
WEBSITES:
US CUSTOMS & BORDER PROTECTION: www.cbp.gov
COMMERCE/BUREAU OF INDUSTRY AND SECURITY: www.bis.doc.gov
STATE/DIRECTORATE OF DEFENSE TRADE CONTROLS: www.pmddtc.state.gov
25. 25 Thank you for your attention!