ITAR and Printed Circuit Boards (Part 2).
In part one of this series we discussed the purpose of ITAR (International Traffic in Arms Regulations) and the government agency responsible for it’s oversight and enforcement. We also talked about what items are covered by ITAR through category 21 of the USML (United States Munitions List) and what the potential penalties are for violations. In this posting we shall talk about who ITAR applies to and the registration process.
Why do we have to register for ITAR?
Registration provides the United States Department of State necessary information used monitor and regulate defense items that are manufactured, imported and exported. It is important to point out at this point that simply registering with the United States Department of State DOES NOT grant you the authority to import and export defense items to and from the United States. If you register with the United States Department of State and then export an item covered by the USML out of the United States you shall be in violation of ITAR and subject to heavy fines and potential imprisonment.
For example, a contract manufacturer is registered with the United States Department of State for ITAR. The contract manufacturer has an order for an assembly to be built. The assembly is used in a radio headset used by the US Military even though the assembly does not call out any military specifications. The procurement agents of the company start locating components for the assembly. A printed circuit board is required for the assembly. One of the procurement agents emails the the fabrication drawing, artwork and drill information to five printed circuit board manufacturers for a quotation of price and delivery time. Three of those printed circuit board manufactures are located outside the United States. The procurement agent has just committed three ITAR violations by sending the data to the printed circuit board manufacturers located outside the United States. Each violation is subject to heavy fines and potential imprisonment.
How does one register for ITAR?
Individuals or organizations interested in registering for ITAR may do so through the United States Department of State Directorate of Defense Trade Controls (DDTC). A complete package for registration along with what is required for supporting information and fees may be found on their web site here.
Who must register with the United States Department of State for ITAR?
This information may be found on the DDTC web site located here. For the purposes of this article the two key groups that need to register are as follows…
- Manufacturers and Exporters. These are either individuals or organizations that either manufacture and export defense related articles and/or services. Even if the manufacturer does not engage in the exportation of such items they are still required to register. If you manufacture or provide services listed on the USML you have to register regardless of whether you export or not.
- Brokers. This is essentially anyone who engages in the business of brokering activities with respect to the manufacture, export, import, or transfer of any defense article or defense service subject to ITAR. An independent sales representative for an ITAR registered company would be considered a broker. If that broker is involved in the transfer of any defense article or defense service subject to ITAR and are not themselves registered for ITAR they are potentially subject to heavy fines and imprisonment.
OK, I’ve submitted my registration information and fee. What happens next?
The DDTC does a background check and verifies all of the information provided. Submitting the registration information and fee is not a guarantee that you shall be approved for registration. However once approved you shall receive a registration notice from the DDTC. The notice shall list your registration code.
NEVER GIVE ANYONE ACCESS TO YOUR REGISTRATION CODE!!!
The registration code that you are issued is the equivalent of your social security number. This code is used to identify yourself to the DDTC. The only two groups that should have access to this number is you and the DDTC. A public statement from the Department of State directing ITAR registered organizations to not publish this information may be found on their web site at…
The passage to note reads…
Once an entity has properly registered with DDTC, a unique registration code will be assigned to the registrant. The DDTC registration code consist of a letter prefix, M (assigned to a manufacturer and/or exporter) or K (assigned to a broker), followed by four or five digits (e.g. K-1234 or M 12345). The code is proprietary to the registrant and should be handled as such. Company registration codes should not be posted online or given out freely to the public.
Being ITAR registered requires you to put a system in place to track and to monitor items that are ITAR restricted. If a manufacturer or exporter publishes their registration code on their website to make it available over the Internet (when clearly directed not to) can you trust them to take care of your ITAR restricted information?