Comparison between US export controls and EU export controls
The United States and the European Union are the world’s two largest trading partners. In 2021, 15.5% of total U.S. exports (by dollar value) went to EU member states, while 17.3% of total U.S. imports came from the EU, according to the U.S. Office of Technology Assessment. With so much goods flowing back and forth, it’s perhaps surprising that there isn’t a comprehensive bilateral trade agreement between the two countries. source: Worldtopexports.com Both the US and EU export control systems follow four multilateral export control mechanisms that establish common control lists and practices for governments around the world. They are: Different and sometimes surprising combinations of governments work together to develop these common rules because it makes their national policies more effective—both for exporters who follow the rules and for the government agencies that enforce them. As a result, the EU rules (now known as Regulation 2021/821) have much in common with the U.S. Export Administration Regulations (EAR). Both regulations…
Permanent vs. Temporary Importation: ITAR vs.
As people become familiar with the International Traffic in Arms Regulations (ITAR), they are often surprised to learn that the regulations not only control exports, but also have certain provisions for temporary imports. In one of the more concise sections of the regulation (ITAR 120.53), temporary importation is defined as follows: “…bringing into the United States from a foreign country the following defense articles: return it to the country from which it was sent or from which it was taken; or Any defence article that is in transit to another foreign destination.” The definition includes “the withdrawal of defense articles from a customs bonded warehouse or foreign trade zone for shipment back to the country of origin or shipment, or to another foreign destination.” A common situation that is classified as a temporary import is bringing something into the U.S. for service or a one-to-one replacement. Other examples include equipment used for display at a trade show or for private…
Disclosing Political Contributions, Fees and Commissions |
The very last section of the International Traffic in Arms Regulations, Part 130, establishes rules about political contributions, fees and sales commissions related to defense trade. It's an odd-duck piece of the ITAR, because it appears to have less to do with export controls than with enforcement of a different law altogether: the Foreign Corrupt Practices Act (FCPA) of 1977. The FCPA prohibits US entities from making payments to foreign officials for the purpose of obtaining or retaining business. The anti-bribery law isn't limited to arms sales; it can apply to anything. It was the first law of its kind globally, and was initially seen by many as putting US businesses at a disadvantage by prohibiting what was then a common business practice around the world. But over time, other countries have enacted their own anti-corruption statutes , changing standards for the conduct of global business. As that has happened, enforcement of the FCPA has increased—as measured both by enforcement…
Best Practices for Screening Denied or Restricted Parties
Screening for denied or restricted parties is one of the most important risk management tasks in export compliance—particularly for items subject to the Export Administration Regulations. Intuitively, for transactions involving the most sensitive items, such as defense articles governed by the International Traffic in Arms Regulations or military items in the 600 series of the Commerce Control List, particular care should be taken in vetting restricted parties. But the greater risk may lie with organizations that export a wider variety of items subject to the EAR - especially those classified as EAR99 and other ECCNs, which can often be exported or re-exported NLR. This is because nearly all items subject to the ITAR require a license. This is generally true for 600-series items as well. But the EAR allows so many items to be exported to the NLR that this status is often misinterpreted as meaning that export controls do not apply. This is not the case, and if you…
ITAR Registration Fees | Registration Overview
In April 2024, the Department of State released a proposal to increase DDTC registration and renewal fees. This is the first fee increase proposed in 16 years, and while a final decision may be several months away, it is reasonable to assume that some form of increase will be approved. For some entities, such increased costs will be negligible, but for others, the costs will be significant. Any business or person in the United States that manufactures, exports, or temporarily imports defense articles or services subject to the International Traffic in Arms Regulations must register annually with the Directorate of Defense Trade Controls (DDTC). According to the U.S. State Department, DDTC receives approximately 38,000 export license applications each year from approximately 14,000 registered entities. Below are the current and proposed fees. Applies to: Current Fees Recommended Fees Increase Tier 1 New registrants; and renewals for entities that did not receive any licenses in the previous year (see details) USD 2,250…
Export Control Audits: What You Need to Know
The purpose of an export control audit is to ensure that your organization is properly managing all compliance issues related to export activities. Auditing is critical to an export control program as it helps identify gaps in compliance and assess the effectiveness of a company’s export control measures. Auditing should not be viewed as a separate activity but rather as a standard business practice and an integral part of a comprehensive export control program. This is an important process; depending on the size and business of your company, compliance issues can be widespread, involving many people who have never heard of the EAR or ITAR, and who are unaware that their work involves exports. For example, a programmer at a computer services company might have good reasons to share code snippets with programmers at a foreign subsidiary, but this could inadvertently be exporting controlled information. A sales representative might be doing the same thing if he provides a quote to…
U.S. Export Controls and Sanctions on Venezuela
When considering Venezuela in the context of U.S. export controls and sanctions, it is important to grasp some basic aspects, such as the specific sanctions in place and Venezuela’s status under the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). Venezuela is subject to strict restrictions and controls under the International Traffic in Arms Regulations and the Export Administration Regulations due to U.S. foreign policy and national security concerns. Venezuela has been subject to U.S. sanctions since 2005 targeting the government of Nicolás Maduro (and before that, Hugo Chavez) and individuals who engage in criminal activity, corruption, and anti-democratic behavior. These sanctions include not only sanctions on Venezuelan individuals and entities, but also industry and financial restrictions. Venezuela and the International Traffic in Arms Regulations Venezuela is included on the 126.1 Prohibited List under the International Traffic in Arms Regulations, which prohibits imports, exports, and sales from certain countries. The list is determined by three key…
Export Control Jurisdiction Overview and
Determining the classification of an item under the Export Administration Regulations (EAR) or the International Traffic in Arms Regulations (ITAR) can be the trickiest part of the entire export process. It can also be the most important part; until you correctly classify the item, you can't be sure if you need an export license. The following is a high-level overview of the process, along with some key points learned through hard-earned experience. It is intended to provide a basic approach to item classification for those just beginning their education in export compliance. To gain insight into this process, the ECTI course “The Ultimate Guide to Classification: Basics, New Advances, and Expert Tips” may be helpful. Terminology and background Before we dive in, let’s get some basic definitions out of the way: Even in the field of international trade,Classification” can mean different things. When we use it, we are specifically referring to determining whether an item is on the United States…
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