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In an effort to control the export of certain products as well as the technology to build and operate them effectively, the U.S. government has enacted laws that restrict or prohibit their export outside the country.  These laws, called export control regulations, are aimed at restricting the flow of these products, technical information, and services to countries who might be in a position to use them against the U.S. and its allies.  

These laws, called the International Traffic in Arms Regulations (ITAR), provide for the control of data and hardware related to the defense of the U.S. from leaving the country.  ITAR is actually made of two sections, 22 CFR Parts 120-130 and 15 CFR Parts 700- 799 also known as the Export Administration Regulations (EAR). There are other sections, but these are the two most important.  Another portion, known as the US Munitions List (Part 121) is a list of the specified products that these regulations encompass and must have a defense export license in order to move.

ITAR pertains to the actual transmission and/or shipment of technical data, services, and actual items that are subject to either EAR or ITAR to foreign nationals in the US.  This also includes technology, technical data, and software that is released for shipment via a visual inspection by a foreign national of US origin, facilities and equipment, 2) information exchanged orally within the US or abroad or 3) application of technical or personal knowledge acquired in the U.S.

It doesn’t take but just a quick reading of these requirements and the laws they pertain to to realize that the processes involved in them are very complex and take a high level of understanding and fully comply with them.  In an effort to alleviate this situation and to facilitate businesses that wish to do business with foreign entities in controlled equipment and information, certain firms have been formed to assist them. As a result, anyone who wishes to do business with a foreign government, especially when transactions involve items involving the ITAR, can develop plans that could allow them to engage in them, depending on their industry and structure.

The defense industry and elements of high technology involve strict rules for doing business.  As a result, compliance can be a difficult undertaking, but with the right guidance, it can be done.  And even after your facility has been cleared for use, there can still be certain safeguards that are required to be maintained as a business goes from doing business with one country and then another.

It should be noted that once a business is cleared for working with a foreign government, the process from there on out is usually very simple.  This is as long as the proper security protocols are followed throughout the future business processes since everyone should be concerned that these protocols are properly followed.

It is also important to know that once an application for the proper licenses has been filed, there is usually a short waiting period of between one and three months before a decision is made.  This is largely dependent on the complexity of the project. You can get a general idea of the processing times for Defense Trade Controls by visiting this website: https://www.pmddtc.state.gov/processtime.htm.

Once a Defense Export License has been obtained, there are several unique items that will be covered.  These include software, hardware and data pertaining to the export (permanent as well as temporary) and import, etc.  By contrast, if a company wishes to engage in business with a foreign government providing assistance to or manufacturing support an agreement, instead of a license is required.

There are other factors that are important to keep in mind when considering whether to attempt doing business with a foreign government.  These include which government it is, since not all governments are considered belligerents. Further, also at issue is the type of technology that is being considered for export.  Not all technologies are considered at risk. As a result of these factors, there can be a big difference in the time it would take to complete a license or being turned down for one.

If you have questions about this process, contact the Commerce Department for information.


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