ITAR Exemptions vs. EAR License Exceptions. Steve Casazza General Atomics

Transcription

1 ITAR Exemptions vs. EAR License Exceptions Steve Casazza General Atomics

2 ITAR Exemption Themes 50 exemptions in the ITAR with unique criteria. -Requires DDTC Registration. -Most cannot be used to destinations. -Many are tied to some form of prior export authorization. License required until proven exemption applicability!!!

3 EAR Exception Themes Criteria based on commodity and transaction type. -Does not require registration. -*Rarely are exceptions prohibited for all commodities to all countries (i.e (a) restrictions) -BIS encourages exceptions instead of licenses where applicable. Exception (or NLR) until proven license is required!!!

4 Comparable ITAR Exemptions & EAR License Exceptions ITAR Exemption EAR License Exception Temporary Import License RPL , TMP 740.9(b)(2), TMP 740.9(b)(4) (a)(1) Overhaul/Service/Repair, (a)(2) Enhancement/Upgrade, (a)(3) Exhibition/Demonstration/Marketing, (a)(4) Rejected Items, (a)(5) FMS Temporary Imports, (b) Incorporation into other Articles (b)(2) LVS Unclassified components and parts less than $ (b)(5) Unclassified temporary exports to public exhibitions and trade shows (b)(9) Unclassified temporary exports to U.S. Subsidiaries Overseas (RPL) One-for-one replacement of components, (TMP(b)(2)) Reexport of items imported for marketing/display/tradeshows. (TMP(b)(4)) Rejected items. Commodity specific value limit to Country Group B destinations. TMP 740.9(a)(5) Temporary exports for exhibition and demonstration (except Country Group E:1) with effective US person control. TMP 740.9(a)(10) TMP 740.9(b)(1) Canadian and Mexican border shipments (b)(4) Export of data previously authorized for export. Temporary exports to a US person s foreign subsidiary, affiliate or facility abroad. Items moving in transit through the US. TSU (g) Copies of technology previously authorized for export to same recipient.

5 Comparable ITAR Exemptions & EAR License Exceptions 125.4(b)(1) ITAR Exemption Export of data pursuant to a written request of DoD (b)(3) Export of data in furtherance of a DoD contract Exports by the USG or for USG end-use. * 126.6(a) Foreign Military Sales Program 125.4(b)(5) Export of data on basic operations, maintenance & training information (b)(10) Export of data for employees of institutions of higher learning. GOV (b)(2) EAR License Exception Exports of items for personal use by personnel and agencies of USG, exports made by or consigned to a department or agency of the USG, exports made for or on behalf of a department or agency of the USG, and exports at the direction of DOD. TSU (a) Operation technology and software minimum necessary required for installation, operation, maintenance, or repair of lawfully exported commodities. TSU (f) Release of technology and source code in the U.S. by U.S. universities to their bona fide and full time regular employees.

6 EAR License Exceptions & 600 Series Items Restrictions on use of License Exceptions for 600-Series - Only for LVS, TMP, RPL, GOV, TSU, STA, BAG - Cannot be used for Country Group D:5 (except (b)(2) of GOV) - Cannot be used if sold under a contract that includes $14M or more of Major Defense Equipment exports to a country not listed in Country Group A:5 - Cannot be used if sold under a contract that includes $25M or more of Major Defense Equipment exports to a country listed in Country Group A:5 - Other applicable restrictions in (i.e. MT, etc.) or specific sections of relevant license exceptions.

7 EAR License Exceptions & 600 Series Items STA Strategic Trade Authorization for 600 Series Items Key Requirements - Foreign parties must have been approved on a license issued by BIS or DDTC at some point. - No 600 Series Major Defense Equipment on a contract exceeding $25M. - Some ECCNs & reasons for control excluded. - Applies to specific reasons of control (NS, CB, NP, RS, CC, SI) - Specific agency of a government from Country Group A:5 ( (c)(1)); or - For development, production, installation, maintenance, repair, overhaul or refurbishing of an item in A:5 or US and ultimately will be used by such government agencies or USG or person in the US; or - USG has authorized the ultimate end-use via previous license or other authorization still in effect, and the consignee verifies in writing that they have such authorization and provides the license or other approval to the exporter.

8 EAR License Exceptions & 600 Series Items STA Strategic Trade Authorization for 600 Series Items Process - Acquire consignee statement that: - Indicates awareness that items are shipped under STA; - Identifies ECCN; - Certifies no subsequent License Exception APR (a) or (b) shipments; - Certifies not ship or transfer in violation of the EAR; - Agrees to USG documentation upon request; - Certifies understanding that STA is limited to Country Group A:5 as well as nationals of a country in A:5; - For non-government end-users, certifies USG end-use checks. - Certifies that: - Ultimate end-user must be a specified agency of a government in A:5; or - For development, production, installation, maintenance, repair, overhaul or refurbishing of an item in A:5 or US and ultimately will be used by such government agencies or USG or person in the US; or - The USG has otherwise authorized the ultimate end-use, previous license or other authorization is still in effect, and the consignee verifies in writing that they have such authorization and provides the license or other approval to the exporter.

9 Best Practices & Common Mistakes for Transitioned Items Have a documented and rigorous classification process to ensure proper classification. Make sure your transaction requires a license (i.e. X in the box!). If license is required, make sure the license exception is applicable to your ECCN. Keep thorough documentation of all STA transactions in order to pass BIS spot checks. Monitor authorization applicability for 600 Series items in furtherance of FMS authorizations. Include.x on your ITAR authorizations to avoid double licensing or unneeded exception use. Don t forget AES filing for 600 Series items (except.y items). Required regardless of value. Everything s gonna be alright Bob Marley

10 Impacts of Post-ECR Changes Classification is even more important when utilizing exemptions/exceptions. ECR created three buckets (ITAR, 600 Series, Dual-Use) for classification and treatment of commodities. Foreign Military Sales programs have become more complicated than they need to be. 600 Series and ITAR items that have transitioned to the CCL confuse foreign end-users. STA is an advantage combined with rigorous recordkeeping and foreign customer education. Complex defense program violations may involve both DDTC Compliance and BIS Enforcement. The first step toward change is awareness. The second step is acceptance. - Nathaniel Branden

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