Keeping Your Equipment Itar Compliant
Manufacturers producing equipment that may be exported outside of the United States
fall under the rules set forth in ITAR (International Traffic in Arms Regulations). Breaches of ITAR can incur substantial penalties, even if those breaches were unintentional.
What Is ITAR?
ITAR was first enacted in 1976 in order to limit arms exports to Eastern Bloc countries. Items or services on the United States Munitions List (USML) were under strict regulations and companies had to receive authorization from the US Department of State before exporting them. In the last ten years, government enforcement of ITAR has risen dramatically and American manufacturers have had to be more diligent about ITAR compliance.
Manufacturers who produce equipment listed on the USML must register with the US Department of State before exporting this equipment to a foreign customer. That customer can be a government, retailer, distributer or even an individual. The company must operate in accordance with ITAR requirements to export the equipment. However ITAR compliance requirements extend outside the company itself.
Are Your Components ITAR Compliant?
A problem can arise when a company is registered and compliant with ITAR, but uses components such as custom silicone keypads from a non-compliant supplier. Even if the manufacturer was unaware of the noncompliance, ignorance is not a valid defense and the manufacturer can be held liable for the breach.
Some manufacturers are unaware of this requirement. ITAR regulations are purposely vague in order to give federal authorities flexibility in prosecution, but that can lead to misinterpretations of the law. A manufacturer might think that because custom silicone keypads are not explicitly listed on the USML they are exempt from ITAR. However if those custom silicone keypads are used on USML-listed equipment, then they become subject to export regulations.
Choosing American Components
It is common for manufacturers of USML-listed equipment to stick with domestic vendors for their components. Although high quality custom silicone keypads or other components may be available from foreign suppliers, using them complicates the ITAR process.
Foreign vendors themselves are not subject to ITAR. Some that deal with American manufacturers may implement training and other procedures to be in compliance to ITAR, but these procedures may not be satisfactory. Other vendors may have an office in the US but be headquartered in another country, which again complicates the definitions under ITAR. A company of this nature could be considered a "US person" or a "foreign person" depending on how they are incorporated and how one interprets the ITAR definitions of these terms.
The safest bet is to buy custom silicone keypads and other components only from American companies who are registered with the US Department of State and actively maintain ITAR compliance. A twenty-five cent component on a million dollar piece of equipment could jeopardize the manufacturer's ITAR compliance and their ability to do business.
by: Christine Harrell
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