How To Check If A Company Is Itar Registered

Is My Company Required to Register Under ITAR?

A often asked compliance question among authorities contracts firms is whether they are required to register under the International Traffic In Arms Regulations (ITAR).

ITAR are the State Department controls that regulate defence products, technical data and services.  Under ITAR 22 CFR §122.1, parties that manufacture, export or temporarily import "defense articles" or replenish "defense services" are required to annals with the Directorate of Defence force Trade Controls (DDTC) within the State Department.  Information technology is of import to note that even parties that engage solely in domestic manufacturing of defence manufactures that do not engage in any exporting or importing are required to register.  Under §122.one, engaging in such activeness "requires only one occasion of manufacturing or exporting, or temporarily importing, a defense article or furnishing a defence force service" to trigger this registration requirement.  In add-on, parties that engage in defense force "brokering" (see below) and freight forwarders that perform services under the Foreign Military Sales plan are also required to annals under ITAR.

Defense Articles.  "Defense articles" are any items that are listed on the U.Due south. Munitions List.[one]  The USML is a list of 21 categories of items covering a wide assortment of products, parts, components, technical data, software and services that are useful in defense force applications.  These include products in the aerospace, maritime, communications, IT/computer/software, electronics, optical, toxicological/biological and other industries.  To appraise if a company is required to register, it must offset by reviewing the USML to determine if products or services with which it is involved are listed.

Companies that oft are required to annals under ITAR include:

• Federal contractors involved in defense, intelligence, security, homeland security and free energy contracts;
• Subcontractors and second- or third-tier suppliers of parts, components, subsystems, accessories and attachments used in such contracts;
• It, computer, software, information security and similar firms involved in defense force applications;
• Companies engaged in projects involving classified information (USML Category XVII is "Classified Articles, Technical Information and Defence Services");
• Companies engaged in the repair, refurbishment and maintenance of defense products and systems, and logistics activities related to such items;
• Companies that perform military training or provide military advice;
• Companies that receive research grants and contracts from the DOD including under SBIR and similar programs;
• Manufacturers of firearms, ordinance and related equipment, gunsmiths;[2]
• Universities (especially those that receive research grants and contracts from defense agencies); and
• Firms involved in engineering science and technical services related to defense projects.

Since the USML covers non just finish items but also certain subsystems, parts and components, many 2nd- and third-tier suppliers that exercise not consider themselves to be in the defense industry are withal required to register.  In addition, firms that merely perform services and practise not supply any products may be required to annals in certain circumstances.

DFARS §225.79 and 252.225-7048.  Information technology has get common for federal prime contractors involved in defense projects to crave their subcontractors to annals nether ITAR, and this has created significant confusion among subcontractors and suppliers.  This requirement is due in part to DFARS §225.79 and 252.225-7048[3] which utilise to many federal defense contracts.[4]  Based on these requirements, prime number contractors are increasingly concerned that if their subcontractors commit ITAR violations (such as failing to register), the prime contractors could likewise accept liability.  Consequently, prime contractors are ofttimes requiring that their subcontractors annals under ITAR and adopt ITAR compliance programs.  If a prime number contractor is registered, this does not relieve the subcontractor of the responsibleness to register separately – each house must acquit its own assessment and annals individually if required.  Subcontractors that are registered and have ITAR compliance programs in place often create less compliance risk for prime contractors and thus are frequently more than desirable candidates for subcontract awards.

ITAR registration is a mechanism for the U.S. government to rail firms involved in the U.S. defense industry.  In addition, registration is a prerequisite for a company to apply to DDTC for licenses, Technical Assistance Agreements (TAAs) and other authorizations.  Since it takes up to 60 days for a registration to become effective, failure to register tin can consequence in significant delays in obtaining licenses, TAAs and authorizations.  DDTC as well advises that registration is required for a company to rely on ITAR exemptions.

Registration Procedure.  Equally part of the registration procedure, the registrant is required to submit documentation that demonstrates that information technology is incorporated or otherwise authorized to exercise business organization in the U.S.  The registration documents must include a certification past an authorized senior officer stating if the registrant, its affiliates and officers, directors and principals (i) take ever been indicted, charged or convicted of violating certain criminal laws; or (ii) are ineligible to contract with or receive export/import licenses from the U.Due south. regime.  In improver, the registrant must identify if it is owned or controlled by a foreign party, and if and then provide an explanation of such buying or control, including the identities of the strange person or persons who ultimately own or control the registrant.

Penalties.  Penalties for ITAR violations include ceremonious and criminal fines of up to $1 one thousand thousand per violation and 20 years' imprisonment, including personal liability for the visitor's officers, directors and employees.  Failure to register is listed as an ITAR violation in 22 CFR §127.1(b)(ii) and (b)(three).[five]

Exemptions and Broader ITAR Requirements.  In that location are certain exemptions from the registration requirement.[6]  Yet it is of import to annotation that fifty-fifty if a visitor is exempt from the ITAR registration requirement, it may still be field of study to other requirements under ITAR and this exemption does not save it of the responsibleness for complying with these other requirements.  Such requirements include:  the requirement to obtain export and temporary import licenses for the export/import of defence articles, the requirement to obtain authorizations for the transfer/disclosure of ITAR-controlled technical information and software to foreign nationals in the U.S. (including foreign national employees of the U.S. contractor), the requirement to enter TAA's authorized by DDTC for the functioning of defense services, restrictions on reexports and retransfers and reporting and recordkeeping requirements.  A more than detailed list of requirements under ITAR are set along in ITAR For Government Contractors.

Brokers and FMS Freight Forwarders.  Registration is also required for ITAR "brokers" under ITAR §129.three.  Brokers are parties that facilitate the auction or transfer of ITAR-controlled products, services and technical information by others, even if they are non directly principals in the transaction.[vii]  Brokers are also subject to other requirement under ITAR including the requirement to obtain advance authorization from DDTC for sure transactions, reporting requirements, recordkeeping requirements and restrictions on engaging in transactions involving countries identified in 22 CFR §126.1.  In improver, equally referenced in a higher place, pursuant to ITAR §126.6(c)(six)(i), U.S. freight forwarders performing services under the Foreign Military Sales (FMS) program are required to register with DDTC.

Empowered Official.  As part of the registration process registrants are required to engage an "empowered official."  This is a U.S. person directly employed by the registrant that has a position of authority for policy and direction within the company and is: (i) legally empowered past the registrant to sign license applications; (ii) understands the requirements of the export laws and penalties for violating them; and (three) has the independent authority to inquire into whatsoever aspect of a proposed transaction, verify the legality of the transaction and decline to sign any license applications without agin recourse from the company.

Other Requirements.  Other obligations under the ITAR registration requirement that frequently utilize to authorities contractors include:

• Amendments.  If at that place are changes in the key information submitted in the registration statement, the registrant is required to notify DDTC of such changes in writing inside five days of the event.
• Almanac Renewal.  The registration must exist renewed annually, provided that the company continues to appoint in activities that trigger the registration obligation.
• ITAR Recordkeeping Requirements.  Registrants are required to maintain records of their ITAR activities for a 5-year period (and longer in sure instances) pursuant to 22 CFR §122.5.

Registration is but part of the broader obligations that may utilise to government contractors nether ITAR.  Contractors should understand the specific requirements that may ascend in their detail activities and use care to comply with these in their business operations.  For a more detailed discussion of these requirements see ITAR For Government Contractors.

To be placed on our listing to receive boosted articles on export and import law delight contact Thomas McVey at tmcvey@williamsmullen.com or (202) 293-8118.  Additional articles on ITAR, EAR and U.S. sanctions programs are available at: "Export Articles."

Note:  This article contains general, condensed summaries of actual legal matters, statutes and opinions for information purposes.  It is non intended and should not be construed every bit legal communication.

[one] The U.Due south. Munitions List is set forth at 22 CFR §121.1.

[3] DFAR 252.225-7048(b) and (e) provide in pertinent part:

      (b)  The Contractor shall comply with all applicable laws and regulations regarding export-controlled items, including, but not express to, the requirement for contractors to register with the Department of State in accordance with the ITAR. The Contractor shall consult with the Department of State regarding whatsoever questions relating to compliance with the ITAR and shall consult with the Department of Commerce regarding any questions relating to compliance with the EAR.

* * *

      (e)  The Contractor shall include the substance of this clause, including this paragraph (eastward), in all subcontracts.

[four] These provide that contractors are required to comply with ITAR and the Export Administration Regulations in performing the relevant contracts and are required to "menses down" this requirement to their subcontractors.

[5] 22 CFR §127.1(b)(3) provides as follows: "(b) It is unlawful:  * * * (3) To engage in the The states in the business of either manufacturing or exporting defense articles or furnishing defense services without complying with the registration requirements. For the purposes of this subchapter, engaging in the business concern of manufacturing or exporting defence articles or furnishing defence services requires merely one occasion of manufacturing or exporting a defense force article or furnishing a defense service."

22 CFR §127.1(b)(two) provides as follows: "(b) It is unlawful:  * * *(2) To appoint in the business of brokering activities for which registration and a license or written approval is required by this subchapter without offset registering or obtaining the required license or written approval from the Directorate of Defense Trade Controls. For the purposes of this subchapter, engaging in the business of brokering activities requires just one occasion of engaging in an activity as reflected in §129.two(b) of this subchapter."

[6] 22 CFR §122.ane(b) provides every bit follows: "(b) Exemptions. The registration requirements of paragraph (a) of this section do not utilize to:(i) Officers and employees of the U.S. Authorities acting in an official capacity; (2) Persons whose pertinent business concern activity is bars to the product of unclassified technical data only; (3) Persons all of whose manufacturing and export activities are licensed under the Diminutive Energy Act of 1954, every bit amended; or (4) Persons who engage in the fabrication of articles solely for experimental or scientific purposes, including research and development."  See as well 22 CFR §129.three(b) for exemptions for registration by brokers.

[7] See 22 CFR §129.2.

How To Check If A Company Is Itar Registered,

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