The DDTC final rule issued on Tuesday April 16, 2013 amends the ITAR categories VII (aircraft and related articles, XVII (classified articles, technical data and defense services not otherwise enumerated) and XXI (articles, technical data and defense services not otherwise enumerated). The final rule also creates a new category, XIX that will cover gas turbine engines and associated equipment.
The BIS final rule also issued on Tuesday April 16, 2013 (link to final rule) creates ten new 600 series Export Control Classification Numbers (ECCN) in order to provide an ECCN for those items being transferred from the USML.
There is a 180 day transition period until the date of publication and the effective date (October 15, 2013). During these 180 days exporters should take the following steps to ensure they implement the final rule in their companies: 1.Review your product line and determine if any of your items will move from the USML to the CCL.
2.Determine the new CCL classification and become familiar with the Export Administration Regulations (EAR).
3.Develop a plan to draft and submit Commodity Jurisdictions for any items you are not able to determine if they have moved over to the CCL. Submit any Commodity Jurisdiction as soon as possible, as it is expected that the number of request will increase during this period.
4.Determine if you have any open licenses or agreements that involved the items moving over to the CCL and determine if you need to submit a new license request through SNAP-R.
5.Review your policies and procedures and modify your licensing determination, license application and license implementation procedures to accommodate for differences in DDTC and BIS licensing requirements.
6.Update your training materials to include changes to your policies and procedures and the final rule.
7. Contact Trade Consulting Services for assistance in implementing the final rules.
We are here to help.
While other compliance service firms are trying to learn the EAR regulations, Trade Consulting Services has experience in both the ITAR and the EAR and can help you navigate the next steps to ensure your company complies with the regulations.
In addition to our knowledge of the regulations we provide:
4.Peace of mind.
You can trust our consultants to help you understand and implement the EAR CCL, determine license exceptions, submit export license applications and Commodity Classification Requests.
This week I am going to deviate from the Essentials of Export Controls blog posts to provide information on technical data and how to determine if your information may be considered technical data.
The definition comes straight from the ITAR, 22 CFR 120.10. U.S. Customs and Border Protection provide additional guidance on some common ITAR questions. This blog post will be helpful to all of those people just diving into the ITAR world and who don’t understand when information may be considered technical data.
Technical Data Definition
For ITAR purposes, the term “technical data” means:
1.Information, other than software as defined in 22 CFR 120.10(4), which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles. This includes information in the form of blueprints, drawings, photographs, plans, instructions or documentation.
2.Classified information relating to defense articles and defense services;
3.Information covered by an invention secrecy order;
4.Software as defined in 121.8(f) of this subchapter directly related to defense articles;
5.This definition does not include information concerning general scientific, mathematical or engineering principles commonly taught in schools, colleges and universities or information in the public domain as defined in 120.11. It also does not include basic marketing information on function or purpose or general system descriptions of defense articles.
Is your information technical data?
Here are some key points you need to ask yourself and your engineers to determine if the information you have should be considered technical data. It may be considered technical data if it:
1.Contains quantitative information;
2.Is not found in the public domain, either in whole or in part;
3.Was generated by independent R&D for military application;
4.Was generated under a DoD contract;
5.Is a genuine engineering scale drawing,not a “cartoon”;
6.Provides understanding of sensitive capabilities (e.g. stealth characteristics), or vulnerabilities (e.g. EMI problems);
7.Provides meaningful insight in the areas of design or manufacturing;
8.Contains answers to questions involving “how to” and “why”;
9.Is extracted unabridged from technical documents directly relating to defense articles or defense services;
10.Goes beyond general scientific, mathematical or engineering principles commonly taught in universities.
These are just a few of the points you should consider when determining if something may be considered technical data. Technical data should not be released to a foreign person without prior written approval from DDTC.
Contact TCS if you need assistance determining if you information is considered technical data or if you need to obtain a license or an agreement to provide the technical data to a foreign person.
Trade Consulting Services-
or at 214-810-0204.
Training is a critical element of any export compliance program under the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). Training ensures that all employees understand the export regulations and reinforces the policies and procedures implemented by the export department.
All employees from the assembly line to the CEO should attend an annual training.
Different types of training and Frequency
Training under your export compliance program can be customized to meet the needs of your company.
Not all employees need to go through rigorous training every year. Training should be based on the employee’s level of involvement with the export regulations. The frequency and how in-depth topics are covered in the training should correlate to the employees job function. For example, you may consider providing general awareness training at a companywide meeting for all employees and following up with those employees whose job functions deal with the International Traffic in Arms Regulations (ITAR) or the Export Administration Regulations (EAR) with a more detailed training session.
Below are some recommendations that can be adopted by many different organizations:
New Employee Orientation
This type of training involves taking all new employees and providing a general overview of how the companies export and import policies and procedures affect their job duties. This is also a great time for the new employees to be introduced to the Empowered Official and other employees with key export responsibilities should the employee have questions on the companies export compliance program or its policies and procedures.
Company Wide Awareness Training
This sort of training can be effective if the company has employees who don’t deal with exports such as accounting and floor shop employees. All other employees who have interaction with export policies and procedures should still be required to attend a more detailed training session.
Comprehensive Annual Training
This training, if possible, should be tailored to each department so that they understand how the export regulations and internal policies and procedures affect their roles and responsibilities. The training should also review any changes to internal policies and procedures that have taken place since the last training.
Training for Export Department Personnel
Export department personnel are responsible for ensuring any changes to the regulations are implemented at your company. As a result, they should attend at least 1 or 2 external training sessions provided by local and national organizations or by consultants so that they may stay current with the regulations.
Changes to the regulations and internal policies and procedures should be communicated throughout the year via internal communications (email, memos, etc.).
Topics that must be covered
The topics to be covered depend on the type of training you are providing (New Employee Orientation, Company Wide Awareness Training, etc.) but in general here are some topics that should be covered:
General instructions on export compliance;
The United States Munitions List (USML) and/or the Commerce Control List (CCL);
Changes to U.S. export regulations;
The roles and responsibilities of all company personnel;
Employees reporting obligations and requirements;
The implications of export violations and Voluntary Disclosures; and
Record keeping requirements.
All training sessions should be documented and the export department should maintain a list of attendees, training date(s), and topics covered.
Are you ready to move forward with your internal company training? Contact TCS for customized training that meets the needs of your employees. Contact us at
or at 214-810-0204.
Over the next couple of weeks we will be focusing on the Essentials of an Export Control Program and what you company needs to have in place in order to help ensure you are on the right track to export compliance.
We will focus on both the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR). The Bureau of Industry and Security (BIS) and the Directorate of Defense Trade Controls (DDTC) both have guidelines of what should be included in the compliance program.
DDTC suggest a comprehensive compliance program includes the following elements:
Corporate Commitment Policy;
Identification, Receipt and Tracking of ITAR Controlled Items/Technical Data;
Restricted/Prohibited Exports and Transfers;
While BIS suggest the core elements of a compliance program are:
Continuous Risk Assessment of the Export Program;
Written Export Management and Compliance Program;
Training and Awareness;
Cradle to Grave Export Compliance Security;
Compliance Monitoring and Audits
Reporting Export Violations; and
Corrective Actions in Response to Export Violations.
Over the next few weeks we will focus on each of these topics and we will start by covering the topics that are common to both the DDTC and BIS guidelines.
Next week we will focus on Training and why you should provide training to all of your employees as well as the type of training that should be provided to your employees that deal with export controls on a day-to-day basis. Check back next week or follow us on Twitter and Facebook to get notified of when the blog is uploaded.
Contact TCS if you are ready to start implementing an export compliance program, 214-810-0204 or
I often encounter misconceptions about the International Traffic in Arms Regulations (ITAR). Among the biggest sources of confusion is registering as a Manufacturer, Exporter or Broker under the ITAR. Let’s clear up the confusion and shed some light on the matter.
Let me start off by saying that under the ITAR, “Any person who engages in the United States in the business of either manufacturing or exporting defense articles or furnishing defense services is required to register with the Directorate of Defense Trade Controls.”(122.1(a))
This applies to everyone, even if you only plan to manufacture or export one time. It also applies to manufacturers who ONLY manufacture and do not export.
We often hear people say, “I’ve been manufacturing for many years and I’ve never registered.” That may be the case, but under the ITAR if you are manufacturing defense articles you are required to register with the Directorate of Defense Trade Controls (DDTC). Failing to do so violates regulations and could also cause you to lose business. Many defense contractors have begun requesting verification that their suppliers are registered and will move their business to an ITAR registered supplier if a company refuses to register.
What is the ITAR?
The International Traffic in Arms Regulations control the export and import of defense articles including items, services and technology. The regulatory text of the ITAR can be found in 22 C.F.R. Chapter I, Subchapter M, Parts 120-130.
Within the ITAR you will find the United States Munitions List (USML). The USML provides a list of all items controlled within the ITAR and can be found in Part 121.
What does a company have to do to register?
To register, the company must submit a complete registration package to the Office of Defense Trade Controls Compliance (DDTC). The registration package includes:
1.Statement of Registration – Form DS-2032
2.State Incorporation Certificate, State Certificate of Good Standing, or State of Incorporation, Sole Proprietorship, Partnership, limited liability partnership/company and corporations.
How much does it cost?
There is a 3-tier fee for applications for renewal registrations. If you are a first time registrant the current application fee will be $2,250. For renewals:
1.If DDTC has not reviewed, adjudicated or issued a response to any application the current applicable fee is $2,250 per year.
2.If DDTC has reviewed, adjudicated or issued a response to between 1 and 10 applications the current application fee is $2,750 per year.
3.If DDTC has reviewed, adjudicated or issued a response to more than 10 the fee is $2,750 plus an additional fee based on the number of applications.
Tip: Companies that are processing a registration renewal should use the form DS-2032 directly from the pmddtc.state.gov website to ensure your registration application will be processed in a timely manner. Many companies re-use the previous year’s application and there have been several changes to the current form that were not included in previous versions.
How long does it take?
DDTC takes about 30 days to process a registration request. Once the request has been processed the applicant will receive a letter with the registration code and guidelines on the type of controls to implement within your organization. The guidelines include information on the creation of a compliance manual, recordkeeping, audits, and management commitment.
Some companies tout that they are “ITAR Certified” when they really mean that they have registered with DDTC. DDTC does not grant certification.
Registration does not grant the registrant authority to export either. The export of technical data or hardware can be accomplished through a license or agreement which will be covered in a future post.
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