Export Control Training

1. Export Control Training October 2011 Supplier Quality Manager Mike Stone Phone: 252-246-7018

2. What We’ll Cover Today • Export Basics • What is ITAR controlled technical information • Who can work on ITAR Programs? • What is your Responsibility?

3. Regulations and What they Control U.S. Department of State Directorate of Defense Trade Controls (DDTC): • Regulations: International Traffic in Arms Regulations (ITAR) • Items Controlled: controls commodities and technology that have predominant military use or space applications. Items that started out as having civil application but were later adapted or modified for military application. • U.S. Munitions List: Listing of controlled commodities/technologies found in the ITAR. • Licensing: Most controlled activities require a license or other written authorization • Registration: US Exporters, manufacturers, brokers must be registered with State. (Remember this requirement when choosing sub-contractors/suppliers to work with you on ITAR programs)

4. Options If Controlled Under the ITAR • Request an Amendment to the Technical Assistance Agreement (TAA) for- a foreign person or US contractor or supplier working for UTCP and they will need to work directly with Navantia/Customer - a foreign company/supplier to work on the S80 ITAR program • Request a Manufacturing License Agreement (MLA) for- a foreign company to manufacture items that are controlled under the ITAR. • Request a DSP5 to make a permanent export of either hardware to a foreign entity or for a foreign employee to work on ITAR program. 1. TAA/MLA are specific for individual foreign person or individual foreign company.2. Need specific approval for dual nationals employed at a foreign company.3. Need specific approval when a foreign company sub contracts to another company

5. Export Basics • What is an export? - An export is an actual shipment or transmission out of the United States. - It’s also the transfer of technical data or article to a foreign person or foreign owned company regardless of their location. • Exports can occur in many ways: Email Mail Face-to-Face Website Visual inspection that reveals technical data Conference – AT&T conference/meeting Hand-carried items – laptops, memory devices

6. Export Basics • Who is considered to be a US Person – a US citizen, either by birth or naturalization, a green card holder, or an asylee to the U.S. (specific requirements on asylees ) • Who is considered to be a Foreign person – anyone who doesn’t meet the definition of a US person. (i.e. those in the US on a visa status). In addition, US persons who are employed by a foreign entity are considered “foreign persons.” For example – Lili Zhang, US citizen, works for UTRC China.

7. Export Basics • What is ITAR Technical Data - Technical Data is information which is required for the design, development, production, manufacture, utilization, repair or reconstruction of articles or materials. It may take the form of: Blueprints SpecificationsManuals SoftwareTraining Programs Plant ToursElectronic transmissions Technical meetingsPhotographs Instructions Instructions: Step #1……. Step #2……. Bake in oven

8. Export Basics Technical data does not include information concerning general scientific, Mathematical, or engineering principles commonly taught in schools, colleges and universities or information in the public domain. It also does not include basic marketing information on function or purpose or general system descriptions. Definition of Public Domain – Information which is published and which is generally accessible or available to the public: 1. through sales at newsstands and bookstores; subscriptions (without restrictions); 2. at public libraries or from which the public can obtain documents; 3. through patents or published applications available at any patent office (MUST BE AVAILABLE – published, NOT merely submitted patents); 4. through unlimited distribution at conferences, meetings, seminars, where anyone could attend; 5. through public release in any form AFTER approval by the cognizant U.S. Gov’t dept or agency; 6. through fundamental research in science & engineering at accredited institutions where the resulting information is ordinarily published and shared broadly in the scientific community. Cannot contain proprietary restrictions or other restrictions such as U.S. Gov’t access & dissemination controls.

9. Who can Work on KAD ITAR Programs ADDITIONAL GUIDANCE - FOREIGN SUPPLIERS • If discussing components we already purchase, or that are otherwise commercially available, then it’s OK to discuss w/foreign suppliers – as long as not a sanctioned country – or debarred entity • If discussing components that are specifically designed, modified or ITAR-controlled, then it’s NOT OK to discuss w/foreign suppliers – until such time as the appropriate license has been granted from theDoS (add to the TAA

10. What is your Responsibility? Export control compliance starts with you. • Know what you are working on and whether the technology or commodities are controlled under: The Department of State’s ITAR regulations or The Bureau of Industry & Security’s Commerce Control regulations. • Know how to protect against an unauthorized export. • Know where and when to get help.

11. Shipping Internationally Diversion Statements ITAR and Dept of Commerce controlled information must be indentified and marked

12. Export Penalties • Individuals and Corporations are subject to criminal and civil penalties for violations of the ITAR. Fines are up to $1M per violation or imprisonment of not more than 10 years. In addition, loss of export privileges may occur.Ignorance Is Not a Defense - Exporter’s knowledge of the export regulations is irrelevant ==================