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Export Compliance: Ask The Experts

 

 

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2016 Archive

 

We know when preparing a DSP-5 for SME in furtherance of a TAA that we must obtain DSP-83s from the foreign end user and all foreign consignees leading up to the delivery to the ultimate end user. But please clarify if once the hardware is received by the ultimate end user, if the end user determines it will send the hardware to a maintenance facility, a warehouse or integrator who is cited on the TAA as a licensee or sublicensee, must a DSP-83 be obtained from those parties even if they will only receive the hardware temporarily?

Once the license and agreement have been approved, you normally do not have to get additional DSP-83s, unless, of course, there is a proviso on the approval that requires that you get an additional 83.


We are a small energetics manufacturer in the mid-west supporting US military, foreign military, and the commercial market.  What are the ITAR regulations regarding sourcing and manufacturing of the in process tooling we use to support our manufacturing process?

You need to read the US Munitions List.  Different USML categories control tooling in different ways. You have to look on the USML for the specific tool in question and make a case-by-case decision.  There is no single rule for tooling.


As a citizen of Germany I am planning to move (for some years) to the US to work for my US employer who has more than 20 business units, all of them dealing with a certain amount of ITAR relevant components. Is it possible to receive one general approval covering all business units as a non-US citizen?

If all the business units are part of the same legal entity (for example, part of the same corporation), it is possible to get one license to cover the single legal entity consisting of multiple business units.


We are a manufacturing firm and I am trying to find current information on how to understand what the restrictions of EAR Part 744 are, and how to apply it to our End Use Statement. We may be awarded some new work and it looks like there could be a conflict.

It is very difficult to answer your question about how to modify your own internal end use statement form that your organization has decided to use.  We would need to know what you export in terms of types of products and ECCNs, the countries to which you export and the nature of the types of business relationships you have with the parties to which you export. There is no one size fits all answer to your question. 

I recommend you go to the BIS website and get the Export Management and Compliance Program guidelines which include an extensive discussion of procedures related to complying with EAR 744.


If one US company temporarily imports a US origin item for repair (from a lawful foreign recipient ("Foreign Party")) under 123.4(a)(1),  can a different US party export it back to the Foreign Party to close out the exemption or does the exporting US party have to be the same as the importing party?

ITAR 123.4(a)(1) says the export shipment must be made by the US importer or a foreign government representative of the country from which the goods were imported.


Does follow up training on an ITAR controlled product require any additional licenses?  Training would be conducted in the country the product is to be exported to.

If the original export authorization authorizes the training you do not need an additional export authorization. If not, whether you need additional authorization depends on the nature, content, and scope of the training as well as all of the other details such as country, USML classification, etc.


We are integrating ITAR controlled Software, rated USML Category XI(d), into a higher level system for ultimate end use by the UK Government. Integration and design of the system will take place in the UK. By integrating ITAR controlled software into our system, would the entire system then be considered ITAR controlled or only if the system was exported from the US?

Typically one of the conditions of the US export approval for the ITAR software to go to you will be to assert US ITAR controls on the software when it is inside your item regardless of where you items is, which as a practical matter imposes ITAR controls on your items with the US software inside.


Can you confirm when an item is transferred from ITAR to EAR if an additional EAR license is required for the commodity or can the existing ITAR license still be used to re-transfer between foreign parties (approved under the original DSP5)?

You may use the ITAR retransfer authorization that was obtained for the item. The retransfer authorization does not have an expiration date.


We are an ITAR designated facility, with only certain areas quarantined. We have numerous employees coming from sister divisions for business meetings / training/ and a plant tour.  It has come to light that two of these visitors (employees of the company that owns this company) have dual citizenship:

U.S. / Brazil
U.S. / Canada

Are they restricted from entering our ITAR designated areas in the manufacturing area?

The ITAR defines both of those people to be US persons because they have US citizenship.
 


We have been asked to manufacture a part for an Israeli company based on their drawings and specifications. Is it considered a dual use item although it is not planned for use in defense? Would this be considered an ITAR-controlled export requiring an export license?

The only way you can determine if it is ITAR controlled is to read the US Munitions List (USML) in the ITAR. If it is made in the US and on the USML it is ITAR controlled.  If it is made in the US and not ITAR controlled, it likely is EAR controlled.


Does the quantity on a commerce licence restrict the number of movements covered by the licence once the goods have been exported (e.g. where a commerce licence is authorised for quantity x10)? Would we have to seek additional authorisation to move the goods more than x10 times for repair and return to local UK repair facility authorised by the licence?

Hi, good question.  Unless the license application, the license, or the conditions on the license specify a number of times the items may be sent for repair, there is not limit.  The quantity limit of 10 means the license authorizes only 10 items but it does not affect the number of times the items may be sent for repair.

While it seems like you do not need it for these items, for future reference, as you may already know, License Exception RPL also authorizes transfers, reexports and US exports for items to be serviced or replaced. So if the license had a condition that said the items may be moved only once for repair, RPL might have been useful after the first move.


Is it necessary to issue a power of attorney to freight forwarding agents?

If you want them to act on your behalf, for example, filing EEI, you probably should give them a power of attorney.


Is there any regulation(s) that prohibits my employer company from designating all parts being manufactured as "ITAR Controlled" vs. making an in-house determination of each and every job as to whether or not the ITAR applies?

That would be like sending in 90% of your income each year to the IRS instead of figuring out how much income tax you owe.  It is not illegal, but it may be a waste of money/resources. 

More military items are not ITAR controlled than are ITAR controlled.  If you do not analyze something closely enough to determine whether it is ITAR controlled, you run the risk that you will not accurately understand the actual ITAR issues for that item/activity. Some ITAR items/activities are subject to more restrictions than others.  That said; if you over control everything as ITAR, there is not a big chance you will violate export regulations. I do not recommend that approach.


If you are selling aircraft parts classified under 9A991.d for commercial aircraft such as a private jet or a commercial helicopter operated by a foreign government such as SAR, Police or Coast Guard, Air Force, Fire Department in a country that is not under embargo or restricted military end use such as China, Russia, Venezuela, do you need a specific export license or you sell as if you are selling to a standard commercial airliner?

Typically that would not require a license but, of course, you have to look at all aspects of the transaction and the regulations.  For example, if the recipient is on a US prohibited party list or destined for a prohibited WMD application you would not be authorized to make the export.


How does a General Correspondence letter get submitted to State? Is it done electronically, if so through what portal, or is a paper submission required & where can one find the address if so?

You maybe submit a GC request on paper via postal service, express carrier or courier.  The address is at: http://www.pmddtc.state.gov/about/contact_information.html.


We have imported one of our components that is ITAR under 123.4(a)(1) exemption. It has been determined that the parts are not repairable and our customer has asked us to scrap in house.  Can we scrap in house since we imported under the exemption?  If so, what would be the process for informing CBP that we are not returning the parts to our customer?  We also are not replacing the parts.

The ITAR does not say what you should do when a temporary import under the exemption turns into a permanent import. Arguably, you do not have to do anything according to the ITAR.  If you wish, you may contact Customs at the port of import and ask if they would like you to do anything.


I was told that if our company has a MAA in place with a company in the UK to manufacture defense articles, to bring them into the US on a permanent basis (import), we would need to apply for a permit with the ATF.  I have perused the ITAR and could not find anything about this. Would you please clarify?

The ITAR has nothing to do with BATF requirements.  If the items are on the BATF US Munitions Import List they generally require a BATF import authorization.
 


The final rule for Cat XII has finalized, but to definitely be sure that our products will no longer be governed under the ITAR, we submitted a CJ to State.  According to the Order of Review process, our product should be governed by ECCN 0A606.x.  We have a tradeshow we plan to attend in the UK in 2 weeks and a demo in Belgium the following week.  Can we proceed with export under ECCN 0A606.x or should we use DSP licenses?

Obtaining an official ruling is not required.  If you make an accurate determination as to an item's USML or CCL classification, you may proceed based on that.  There is no way for me to know the classification of the item based on the information your provided.  If you feel comfortable with your jurisdiction classification, you should feel comfortable proceeding on that basis.