ITAR compliance – how can you become an ITAR registered manufacturer

Sam Miles Date published: Mar 02, 23

ITAR (International Traffic in Arms Regulations) is a United States set of regulations that controls the exportation of defense and military technology and data. If you are a manufacturer that deals with US defense related items, either within in the US or outside of it, you need to follow ITAR.

Understanding ITAR compliance

International Traffic in Arms Regulations (ITAR) is a set of United States regulations controlling the exportation of defense and military technology and data. If you are a registered manufacturer dealing with U.S. defense-related items, either within the U.S. or internationally, ensuring ITAR compliance is crucial.

About ITAR compliance

ITAR specifically regulates the export and import of defense articles and services listed on the United States Munitions List (USML). This includes products on the USML, defense services, and the technical data used to build or support these products. Examples of technical data include software, part drawings, and photos.

The purpose of ITAR is to protect U.S. national security by preventing sensitive military and defense information from falling into unauthorized hands. Unless otherwise authorized, only U.S. citizens and U.S. Green Card holders can access items on the USML.

ITAR requirements for registered manufacturers

If manufacturers engage in projects involving defense articles, services, or technical data listed on the USML, they must ensure compliance with ITAR. Additionally, when working with subcontractors, vendors, or other companies in your supply chain that handle ITAR-controlled items, you must verify their compliance with the regulations.

Failing to meet ITAR requirements can result in significant business losses, legal issues, and hefty fines that could run into billions.

Ensuring your business is ITAR compliant

ITAR's intentional vagueness allows the U.S. government flexibility in controlling military and defense technology. However, at a minimum, if your business is subject to ITAR, you need to:

1. Register with the DDTC: The U.S. State Department’s Directorate of Defense Trade Controls (DDTC) requires registration for all businesses under ITAR, which is generally a prerequisite for obtaining any further export licenses or approvals.
2. Understand ITAR applications: Recognize how ITAR applies to your USML goods, services, or data, and ensure you're meeting ITAR compliance requirements.
3. Develop policies: It’s the manufacturer’s responsibility to develop, implement, and maintain policies to meet ITAR's demands, as there is no specific ITAR certification to obtain other than DDTC registration and compliance.
4. Secure global data: Businesses with global operations must secure their data to ensure non-U.S. citizens do not access ITAR-related information.
5. Implement data security measures: While implementing ITAR-related security measures can be challenging, it's essential for manufacturers who work with ITAR-controlled products, whether directly with the U.S. military or as part of a supply chain for contractors. Non-compliance can lead to missing lucrative business opportunities.

Steps to ensure ITAR compliance

1. Determine applicability: Evaluate whether ITAR applies to your business.
2. Register with the DDTC.
3. Implement an ITAR compliance program across your organization.
4. Comply with reporting and recordkeeping requirements.
5. Obtain necessary licenses and approvals for defense services.
6. Ensure supply chain compliance.
7. Understand possible exemptions.
8. Report any ITAR violations immediately.

Penalties for failing ITAR compliance

Penalties for ITAR non-compliance include:

• Civil or criminal fines up to $1,000,000 per violation.
• Up to 20 years imprisonment per violation for criminal charges.
• Debarment from participating in ITAR-controlled transactions.

For example, in 2020, Airbus was fined $3.9 billion for, among other issues, ITAR violations.

Opportunities through ITAR compliance

Becoming ITAR compliant and registered can open new doors for small manufacturers, enabling access to customers who produce ITAR-controlled parts.

Ideagen solutions for ITAR compliance

At Ideagen, we offer software solutions to aid businesses in achieving ITAR compliance. From managing sensitive data to providing training on ITAR requirements, ensuring 360-degree supply chain visibility, and offering robust CAPA and audit functionality, we deliver the tools needed to comply with ITAR regulations effectively.

Get your free ITAR checklist

Find out more about how you can become ITAR compliant by downloading our ITAR Requirements Checklist

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