Understanding ITAR

19 Dec 2013

As a global company, one of our main concerns is any reluctance potential customers may have to purchasing from General Digital. With a large (and rapidly growing) international customer base, we are aware that ITAR (International Trade in Arms Regulations) and EAR (Export Administration Regulations) may cause some international businesses to be wary about buying from us. We feel a relatively brief explanation is in order.

ITAR government regulationsThe International Traffic in Arms Regulations (ITAR) is a compilation of United States government regulations designed to control the export and import of defense-related articles and services as found on the United States Munitions List (USML). For the sake of brevity, ITAR dictates that information and material pertaining to defense- and military-related technologies (for items included on the U.S. Munitions List) may only be shared with U.S. persons unless the Department of State authorizes the transfer or a special exemption is granted; these regulations implement the provisions of the Arms Export Control Act (AECA). Items on the U.S. Munitions List include, but are not limited to: firearms, guided missiles, explosives, tanks and military vehicles, military training equipment, vessels of war, and special naval equipment.

The Department of State Directorate of Defense Trade Controls (DDTC) interprets and enforces ITAR. Its goal is to safeguard U.S. national security and further U.S. foreign policy objectives. To this end, a person or company found to be in violation of the AECA can be subject to heavy fines (civil fines up to $500,000 per violation; criminal fines up to $1,000,000) and imprisonment (10 years of incarceration per violation). This, undoubtedly, has led to many international companies being wary of working with companies in the United States. However, even a cursory glance of the USML will reveal that most industries are not affected by ITAR.

Night Vision GogglesThough General Digital’s clientele is largely military (both domestic and international), the only products that are included on the USML are any monitors that are NVIS (Night Vision Imaging System) or NVG (Night Vision Goggle) compatible. With this in mind, even though a monitor may be used by the military, it may not be listed on the USML.

However, Export Administration Regulations may also apply. EAR (Export Administration Regulations) are the rules used by the U.S. Department of Commerce Bureau of Industry and Security (BIS) to regulate and control exports of goods from the United States. EAR covers all goods and services that are not included on the USML. The goods and services which EAR oversees are contained on the Commerce Control List (CCL) of regulated commercial items, including those items that have both commercial and military applications.

Maximum civil fines under EAR can reach as much as $250,000 per violation. Criminal penalties can carry fines as high as $1,000,000 and up to 20 years imprisonment per violation. Computers and/or software are included on this list because, though designed for commercial use, these items could have military applications. Because the majority of our products are LCD monitors that contain no computers, they are considered ‘EAR99’. This means that though our monitors might be subject to EAR, they are exempt and not included on the CCL with a specific Export Control Classification Number (ECCN).

Our international customers buy from us regularly for two reasons. First, General Digital products are of the highest quality and provide years of service. Second, the ease with which they are able to transact business with us. Our products are generally free from any export restrictions. General Digital is registered with the DDTC and complies with the rules set forth by the Department of State and the Bureau of Industry and Security. The information presented here helps illustrate our understanding of, and comfort with, engaging in international business.

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