The International Traffic in Arms Regulations, known as ITAR, controls the import and export of any defense-related goods, technologies, and data as defined in the United States Munition List (USML). All parties involved in supply chains that relate to these goods must act in compliance with these laws, including manufacturers, distributors, or contractors. While these laws are straightforward, these parties do have to get specific licensure and documentation and be registered properly to avoid being charged with ITAR violations. These violations can be for a range of non-compliant actions. Below are some of the most common reasons that people face charges under ITAR.
1. Failing to Register
All manufacturers of firearms, ammunition, or components of these items are required to register with the U.S Department of State, Directorate of Defense Trade Controls (DDTC), even if they do not intend to export their product. Any manufacturing of the items on the USML is illegal without proper registration. Additionally, the DDTC requires advanced approval for any exports. Failure to go through these processes is considered a violation of ITAR.
2. Lack of Technical Data Licenses
In addition to the goods themselves, any export of technical data or defense services related to firearms and ammunition require prior approval and licensure. Exporting these without prior approval is considered a violation of ITAR. An example may include sending technical drawings to a foreign vendor to obtain a quote without getting a license to do so beforehand. Any discussion of technical data with foreign companies also requires this licensure. Most people who violate ITAR in this way are simply not aware of the rules, but they will still be enforced.
3. Incorrect Documentation
Any error in a document can lead to an ITAR or customs violation, even if it was a simple mistake or an omission. Documents subject to this rule may include DDTC license applications, electronic export information filings, destination declarations, delivery verifications, applications for registration, purchase orders, foreign import certificates, bills-of-lading, non-transfer and use certificates, and shipping documents that contain information related to the export of defense articles. In short, any export of defense articles requires meticulous attention to details, as simple mistakes can have legal implications.
4. Not Vetting Other Parties
As an exporter of record for any ITAR-related items and services, the Department of State holds you accountable for knowing every party involved in a transaction. It is your responsibility to confirm that each party is not prohibited from engaging in ITAR-controlled transactions, as well as confirming that the information they provide regarding end-users is reliable. Doing due diligence is critical to avoiding violations, as failure to investigate exposes your entire organization to enforcement from the government. Even if you are licensed or operating under ITAR rules, exporters have continued responsibility for the items they export.
5. Uncontrolled Technical Data
If you manufacture, design, or perform manufacturing services related to ITAR-controlled items, it’s very likely you are also in possession of technical data controlled by ITAR. The definition of technical data is very broad under ITAR, including all information used in the design, manufacture, testing, repair, or quality assurance of the defense articles. You are prohibited from transferring or disclosing this technical data to foreign persons, even in the United States, without the proper licenses.
This can be a particular challenge as there are many foreign persons in the U.S., both lawfully and unlawfully, and it is not always easy to identify them. Additionally, it is not always clear what counts as technical data. It’s important to know that if you work with this data, the burden is always on you to avoid unauthorized exports.
6. Willful Failure to Comply
While most ITAR violations can happen as a result of oversights or a lack of diligence, there are also cases where exporters purposefully do not comply with the regulations. This may be done to avoid red tape and complex processes, or it may be a more malicious decision intended to work with foreign actors who are not aligned with the United States’ goals. These cases may be treated more harshly than others or lead to additional charges, depending on what regulations were violated and why.
If you are unsure whether or not you have been charged, it is vital that you have a skilled criminal defense attorney by your side.