I’ve Heard of ITAR, does it matter to me?
International Traffic in Arms Regulations (ITAR) control the export and import of defense-related articles and services on the United States Munitions List (USML), while EAR covers commercial and dual-use items and technologies. EAR items are listed on Commercial Control List (CCL). The United States government mandates that any company that manufactures, exports, as well as brokers of defense articles, defense services, or a company that is involved with related technical data, must be ITAR compliant.Technical Data Under ITAR (in summary only) is all the information generated or gathered during the design or production stages and may include engineering, manufacture, assembly, integration, testing, inspection and quality assurance data.
How does this affect me? Employees of Australian companies handling ITAR articles or data must be:
- Australian citizens,
- Non-Australian citizens who hold an Australian Government security clearance or they qualify for the exemption at ITAR §126.18, being employees who do not hold an Australian Government security clearance or are not exclusive national of Australia, Japan, New Zealand, Switzerland or countries that are members of NATO or the EU. In this case (to qualify under ITAR §126.18) where the access is to occur within the territories of the above mentioned countries, they will need to be screened for substantive contacts, a potentially long and drawn out process.
Suitable questions for prospective employees should address the points below:
- Personal or business contacts with foreign Government Officials, Agents, or Proxies.
- Family contacts with foreign Government Officials, Agents, or Proxies.
- Continuing demonstrated allegiance to a third country.
- Frequent travel to an ITAR §126.1(a) country.
- Maintaining assets in a third country.
It is important to note that mere contact with individuals or organisations from these §126.1 countries does not automatically raise a concern, it is the nature and type of contact that is to be evaluated. If the substance of the relationship poses a risk of disclosure then the Australian entity needs to consider its options.
This is critical to get right. Disclosure (know as an “export”) even inadvertently of ITAR data to a non-eligible person can involve penalties and sanctions being imposed on the discloser, or in the case of a sub-licencee can cause issues for the licencee (usually a prime). Australian entities should consider developing questions that encourage the employee to disclose any substantive contacts as part of the screening process.
For assistance with ITAR (or EAR) compliance send me an email or give me a call.