Getting you started What we will cover

Transcription

1 OVERVIEW OF EXPORT CONTROL REGIMES & REGULATIONS Ms. Catherine Hamilton Division Chief, Space, Missile, and Sensor Systems Defense Trade Controls Licensing Scott Maslow Licensing Analyst Defense Technology Security Administration Adam Duvall Munitions Control Division Bureau of Industry & Security Marc Binder Senior Partner ITC Strategies Tom Donovan Director, Export Management Northrop Grumman Corporation Society for International Affairs Getting you started What we will cover Laws and regulations Why do we have export controls? Government agency overview DoS: Directorate of Defense Trade Controls (DDTC) DoC: Bureau of Industry and Security (BIS) DoD: Defense Technology Security Administration (DTSA) ECR/500 and 600 series Some basics to get you started Definitions Processes 1

2 Why Am I Here? Did you miss the meeting and have it delegated to you? Export Compliance Is the Law Supports National Security and Foreign Policy initiatives Is good business Failure can be very costly Fines Penalties Debarment Impacts your ability to deliver At all On time Protect your company s reputation and ability to make exports! 2

3 Export Control Law (cont d) Developed and implemented to control the release of strategically important technologies and products in order to enhance national security Through these laws the U.S. Government Limits weapons proliferation Prevents our adversaries from obtaining capabilities that threaten U.S. National Security Ensures U.S. Forces maintain cutting edge technologies, equipment and know-how Ensures our allies maintain state of the art technologies and equipment Supports U.S. foreign policy initiatives (human rights, trade sanctions, embargoes) Prevents supply shortages of critical materials Increase Global Growth & Stability Promote Interoperability with Allies Arms Export Control Act (AECA) Governs Direct Commercial Sales and Foreign Military Sales and requires: Registration of Manufacturers, Exporters and Brokers of defense articles Licensing of exports USG approval of end-use Broad Authority to Approve, Deny, Suspend, Revoke and Halt Shipments at U.S. Ports End-Use and Retransfer Assurances Establishes Fines and Penalties 3

4 International Traffic In Arms Regulations (ITAR) Implements the AECA Export Administration Act (EAA) Authorizes the Department of Commerce to regulate most U.S. dual use exports The EAA and the implementing EAR establish policies and procedures for the regulations of exports The Export Administration Act of 1979, as amended, has been in lapse since August 21, 2001 U.S. dual-use export control system continues due to the President's invocation of emergency powers under the International Emergency Economic Powers Act (IEEPA) 4

5 Export Administration Regulation (EAR) Implements EAA To Ensure Compliance Prior to export approval, requests are reviewed for: National Security concerns Foreign Policy objectives Human Rights concerns Proliferation concerns Regional stability 5

6 USG Players In Export Control Regulators or Reviewers US Department of State US Department of Commerce US Department of Defense Defense Technology Security Administration Defense Security Cooperation Agency Department of Homeland Security Bureau of Alcohol Tobacco and Firearms Department of Agriculture Department of Energy Department of Justice Nuclear Regulatory Commission OFAC US Congress White House Joint Staff Military Services Missile Defense Agency US Customs (CBP) National Security Council US Trade Representative Intelligence Community NASA Many USG Departments, Agencies and Offices Involved USG EXPORT CONTROL AGENCIES Ms. Catherine Hamilton Division Chief, Space, Missile, and Sensor Systems Defense Trade Controls Licensing Scott Maslow Licensing Analyst Defense Technology Security Administration Adam Duvall Munitions Control Division Bureau of Industry & Security Society for International Affairs 6

7 Introduction to Directorate of Defense Trade Controls Mission Statement Ensure commercial exports of defense articles and defense services are consistent with U.S. national security and foreign policy objectives 7

8 Department of State Yellow Borders are Political Positions Under Secretary for Arms Controls & International Security (T) Vacant Assistant Secretary for International Security and Non Proliferation (ISN) Vacant, Eliot Kang, PDAS Assistant Secretary for Political-Military Affairs (PM) Vacant, Tina Kaidanow, PDAS Assistant Secretary for Arms Control Verification and Compliance (AVC) Vacant, Anita Friedt, PDAS Deputy Assistant Secretary for Security Assistance Kevin O Keefe (A) Deputy Assistant Secretary for Defense Trade Mike Miller (A) Deputy Assistant Secretary for Security Negotiations Tim Betts (A) DAS Organization All Non-Political Professional Staff Deputy Assistant Secretary Of Defense Trade Mike Miller (A) Managing Director Tony Dearth (A) Management Staff Office of Defense Trade Controls Compliance Office of Defense Trade Controls Licensing Office of Defense Trade Controls Policy Office of Regional Security and Arms Transfers Vacant (No Acting) Terry Davis (A) Rick Koelling (A) Laura Cressey (A) 8

9 Office of Licensing Director Terry Davis (Acting) Deputy Director Vacant Plans, Personnel, Programs, & Procedures Vacant Division 3 Space, Missile, and Sensor Systems IV, V, XII, XIV, XV Division 4 Electronic and Training Systems IX, XI, XIII, XVI-XVIII, XXI Division 5 Sea, Land, and Air Systems II, VI, VII, VIII, X, XIX, XX Division 6 Light Weapons and PPE Systems I, III, Catherine Hamilton Angela Brown Alisa Forby Alex Douvile (Acting) Pete Walker (Acting) Office of Licensing Core Responsibilities Respond to licensing requests from industry Confirm answers to the following questions on every export request Who, What, When, Where, Why, and How Determine if the export is consistent with U.S. foreign policy and national security objectives (seek referrals) Make a final determination (approve, limit, deny, or RWA) 9

10 Office of Policy Director Sarah Heidema (Acting) Deputy Director Rick Koelling (Acting) Regulatory and Multilateral Affairs Rob Hart (Acting) Commodity Jurisdiction and Classification Nick Memos (Acting) Regional Affairs and Analysis Judd Stitziel Office of Policy Core Responsibilities Maintain and update the ITAR/ECR implementation Respond to requests from industry and USG for Commodity Jurisdiction determinations End-use monitoring of exports, research and risk analysis support to licensing Develop and implement policy and guidance for exporters, USG, and foreign partners 10

11 Office of Compliance Director Senior Compliance Advisor Daniel Buzby Vacant Office Management Specialist Policy and Operations Team Jae Shin (Acting) Compliance and Enforcement Team Julia Tulino Registration Team Dan Cook Office of Compliance Core Responsibilities Review registration submissions of arms manufacturers, exporters, brokers to establish profiles Ensure ITAR compliance through various means, including the company visit program, outreach, voluntary and directed disclosures, criminal referrals, and administrative/civil actions when warranted Maintain Watch List and screen export authorization requests Coordinate with law enforcement 11

12 Contact Information DDTC s website: (lots of resources) Generic Questions: DDTC Response Team, DDTCResponseTeam@state.gov DTC IT Issues: DDTC Help Desk, dtradehelpdesk@state.gov Case status: Introduction to Bureau of Industry and Security Introduction to Bureau of Industry and Security 12

13 BIS Organization MCD License Processing Three Part Review Policy review Country or countries involved (including country of end use), Country Groups (e.g., regime membership or countries of concern), risk of diversion, license exception eligibility, regional stability Compliance review Parties, bona fides, licensing history, MDE threshold, STA eligibility Technical review End use, quantity, classification (ECCN), technical documents, end-user requirements 13

14 Contact Information 600 Series Licensing and Classification Requests: Munitions Control Division Director (Acting): Thomas DeFee, Deputy Director (Acting):Christopher Williams, Technical Product Questions on Aircraft and Gas Turbine Engines Office of National Security and Technology Transfer Controls: Michael Rithmire, Munitions Control Division: Jeff Leitz, Regulatory Interpretation and Transition Guidance Regulatory Policy Division: Outreach Assistance: Outreach and Educational Services Division Director: Rebecca Joyce, Western Regional Office Director: Michael Hoffman, Web: Introduction to Defense Technology Security Administration 14

15 Mission and Vision Statement Mission: Identify and mitigate national security risks associated with the international transfer of advanced technology and critical information in order to maintain the U.S. warfighter s technological edge and support U.S. national security objectives Vision: Be the U.S. Government s premier experts on information sharing and information & technology security, safeguarding the U.S. qualitative military edge while enhancing foreign partners capabilities Defense Technology Security Administration Beth McCormick Director Mike Laychak Deputy Director Licensing Directorate License Reviews Commodity Jurisdictions Voluntary & Directed Disclosures Regulations Technology Directorate Air, Land and Sea Electronics and Sensors Space and Missiles Policy Directorate Regional Policy Technology Security Assessment & Assistance Bilateral & Multilateral Negotiations Outreach & Liaison Strategic Analysis End-User & Entity Review Patent Security Review Technology Security & Foreign Disclosure Office ATTR SSG Secretariat Releases in Principle / Specific DoD TSFD Process Oversight ATTR SSG TSFD Policies International Security Directorate Secretariat NDPC FG Disclosure Policy Security Surveys General Security Agreement NATO Security Policy Foreign Personnel Assignment Policy Monitor International Security Program International Security Training Oversight Management Directorate Finance Administration Contracts Human Capital Security Info Technology Integration 15

16 What Government Agency Do You Deal With? Primary Agencies for Regulating Exports Department/ Agency US Department of State Directorate of Defense Trade Controls (DDTC) US Department of Commerce Bureau of Industry and Security (BIS) Law Arms Export Control Act (AECA) Export Administration Act (EAA) Regulation Commodity List International Traffic in Arms Regulations (ITAR) US Munitions List (USML) Export Administration Regulations (EAR) Commerce Control List (CCL) Scope Military Military, Dual Use, Commercial General Approach Registration requirement? Registration Fee? Automation System Narrow area of control; Broad licensing requirement Yes Yes D-Trade Broad area of control; Narrow licensing requirement No No SNAP-R 32 16

17 What Agency Do You Deal With? It Depends: What is the Jurisdiction and Classification of your product? Jurisdiction: Different USG agencies have control over different types of products, and associated technology or technical data. Classification: Depending on Jurisdiction, can be ECCN or USML Category Also includes HTS or Schedule B. Jurisdiction Of Your Products And Data Knowing the Jurisdiction of your Export is Critical What are the general characteristics of your item? Does it align with a Category revised under Export Control Reform (ECR)? Always start your review process with the USML Follows a series of Yes/No answers Item enumerated on the USML Item caught by Specially Designed Criteria Item enumerated on 600 Series CCL Item caught by Specially Designed Item enumerated on the broader CCL Item caught by Specially Designed If you get the jurisdiction wrong, every export will be a violation! 17

18 ECR Transition Status USML Category No. Description Effective Date I Firearms TBD II Artillery TBD III Ammunition TBD IV Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, and Mines 07/01/2014 V Explosives and Energetic Materials, Propellants, Incendiary Agents, and Their Constituents 07/01/2014 VI Surface Vessels of War and Special Naval Equipment 01/06/2014 VII Ground Vehicles 01/06/2014 VIII Aircraft and Related Articles 12/31/2016 IX Military Training Equipment 07/01/2014 X Personal Protective Equipment 07/01/2014 XI Military Electronics 12/30/2014 XII Fire Control/Sensors/Night Vision 12/31/2016 XIII Materials and Miscellaneous Articles 01/06/2014 XIV Toxicological Agents 12/31/2016 XV Spacecraft and Related Articles 11/10/2014 XVI Nuclear Weapons Related Articles 07/01/2014 XVII Classified Articles, Technical Data, and Defense Services 10/15/2013 XVIII Directed Energy Weapons 12/31/2016 XIX Gas Turbine Engines and Associated Equipment 12/31/2016 XX Submersible Vessels and Related Articles 01/06/2014 XXI Articles, Technical Data, and Defense Services Otherwise Not Enumerated 10/15/2013 Second Revision Add in table of transitioned categories 600 Series? What? Huh? ITAR Strict limitations on re-export/retransfer Minimal exemptions No De minimis Rule 600 Series Munitions 500 Series Space Enhanced re-export/retransfer ability Six applicable Exceptions New 600 Series De minimis Enhanced re-export/retransfer ability (Subject to same scope of controls as 600 series items) Six applicable Exceptions Equivalent De minimis Broader CCL Broader re-export/retransfer ability All CCL exceptions may apply 25% and 10% De minimis 18

19 DTC Registration WHO MUST REGISTER? Exporters Manufacturers Brokers Foreign military sales (FMS) freight forwarders (ITAR 126.6(c)(6)(i)) Exemptions available 19

20 REGISTRATION REQUIREMENT Type Manufacturer / Exporter Broker Who Any person who engages in the U.S. in the business of manufacturing or exporting defense articles or furnishing defense services Broker means any person described below who engages in the business of brokering activities: Any U.S. person wherever located; Any foreign person located in the U.S.; or Any foreign person located outside the U.S., if owned or controlled by U.S. person Exempt USG agencies acting in an official capacity USG agencies, foreign governments and international organizations acting in an official capacity Ref. AECA Section 38 & ITAR Part 122 AECA Section 38 & ITAR Part 129 REGISTRATION & RENEWAL SUBMISSION PACKAGE DS-2032 Statement of Registration ( DS-2032 ) Supporting documentation Renewal package requires the same documentation as an initial registration package 20

21 MATERIAL CHANGES NOTIFICATION REQUIREMENTS Review DDTC website for notification templates Submit in writing by mail (overnight preferred) on registrant s letterhead Must be signed by a senior officer listed in Block 7 of the DS-2032 Brief summary of the changes and effective dates DTCC-issued registration codes for all registered parties Name, , and telephone number for a knowledgeable point of contact For reorganizations and ownership changes provide: Before and after organizational charts Names, addresses, and telephone numbers of all firms involved Names of the ultimate as well as intermediate owners ITAR compliance program(s) effective following the change Note, any changes made for subsidiary must be submitted by registrant Don t forget to date your letter! Faxes and s will not satisfy the change notification requirement Web guidance and templates: HINTS ON SUBMITTING A REGISTRATION RENEWAL PACKAGE Lapsed registration - unable to obtain authorizations or invoke exemptions Submit to DTCC 60 days ahead of expiration Cite existing registration number on DS-2032 Highlight changes Include copy of renewal fee letter with submission Revise USML categories Include broker activity report Same basic requirements as new registrants Keep registration information current including contact 21

22 Basic Overview and Key Definitions What Is Controlled For Export? Commodities Software Technology Technical Data Defense Services 22

23 How an Export Occurs Tangible shipments Hand-carrying products Electronic transmission (e.g., fax or ) Technical presentations open to the public Publishing technical articles Oral conversations of a technical nature Foreign visitors (technical meetings, plant tours) Demonstrating products at a Trade Show (US and Foreign) Offshore procurement/sourcing (build to print) Re-export of US goods and data Foreign person access to technical information on computer servers Providing a Defense Service to a foreign person Definitions Export (ITAR) Sending or taking defense article out of US Transferring registration, control or ownership Disclosing or transferring any defense article Disclosing or transferring technical data Performing a defense service Or simply put The transfer of anything controlled to a FOREIGN PERSON by any means, anywhere, anytime, or the provision of a service related to a military designated article. 23

24 Definitions Defense Article (ITAR) Any US Munitions List item or technical data Includes data recorded or stored in any physical form, models, mockups, or other items that reveal technical data Definitions Defense Service (ITAR) The furnishing of assistance (including training) to foreign persons in the of defense articles The furnishing to foreign persons of any technical data controlled under this subchapter (22 CFR ). Military training of foreign units and forces, regular and irregular. 24

25 Definitions Technical Data (ITAR) Information required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles Classified information Invention secrecy order information Software directly related to defense articles Technology (EAR) Specific information necessary for the development, production or use of Commerce Control List product Technical Data/Technology Exclusions Does notinclude information concerning general scientific, mathematical or engineering principles or in the public domain Does notinclude basic marketing information on function or purpose or general system descriptions of defense articles Be Careful: Public Domain Information: Was it placed there legally? Are there Defense Services in connection? Basic Marketing Information or General Systems Descriptions No Technical data can be contained within 25

26 Definitions US Person (ITAR) Lawful permanent resident or protected individual Any US corporation, business association, partnership, society, trust, entity, organization or group Definitions Foreign Person (ITAR) Any natural person who is not a lawful permanent resident or who is not a protected individual of the US Any foreign corporation, business association, partnership, trust, society, entity or group Any international organizations, foreign governments, agencies or subdivisions 26

27 Definitions Dual National (DN) (ITAR) An individual who holds nationality from the country of their employer who is a foreign licensee (or sublicensee) to the agreement, and also holds nationality from one or more additional countries Third Country National (TCN) (ITAR) An individual who holds nationality from a country other than the country of their employer who is a foreign licensee (or sublicensee) to the agreement Deemed Export / Re-export (EAR) Any release of technology or source code subject to the EAR to a foreign national of another country is a deemed Export /re-export to the home country or countries of the foreign national. Does not apply to persons lawfully admitted for permanent residence. Deemed export /re-export licensing requirements are based on a foreign national's most recent country of citizenship or permanent residency. Foreign Person Vs. Foreign National For export purposes, a green card holder is a U.S. Person. However, for Security purposes, that person would be treated as a Foreign National. Security Perspective Foreign National Non U.S. Citizen with No Right to Work in U.S. Non U.S. Citizen with Temporary U.S. Work Permit Export Perspective Foreign Person Non U.S. Citizen with Permanent Resident Status or Refugee / Asylee Status U.S. Person U.S. Citizen 27

28 Prohibited Destinations Countries Suppl. 1 Part 740 D:5 Countries Countries subject to U.S. arms embargoes are identified by the State Department through notices published in the Federal Register. Comprehensive Embargos Country Group E Cuba Iran Korea, North Sudan Syria Export Licensing Process 28

29 Authorizing Your Export: Do You Need A License? You want to export items/data and you need an Authorization You now have to determine what type of authorization Do you need a License? Commerce Department Very often, no Many Exceptions available State Department Almost always need a license Few Exemptions available Exemption criteria can be tough to meet What Are Exemptions/Exceptions? Authorizations to export without a license provided that all of the defined criteria for its use can be met prior to export ITAR EXEMPTIONS More than 50 exemptions each with a unique set of criteria Review the ITAR completely to ensure that all of the eligibility criteria can be met Don t stop once you ve found something that appears to be applicable Review subcategories completely Special reporting/certification requirements may apply EAR EXCEPTIONS List-Based and Transaction- Based Country groups related to reason for control Know the 10 General Prohibitions Don t stop once you ve found something that appears to be applicable Additional reporting requirements may apply 29

30 Commerce Department Exports Export licensing requirements for Commerce depend on: Export Control Classification Number (ECCN) Country where item is being exported Country(ies) of any proposed re-exports Whether or not General Prohibition 1-10 apply to the export see EAR Reasons For Control ( Part 742) Once ECCN is determined, exporter will look to see what the controls are that apply to that ECCN: AT = Anti Terrorism CB = Chemical & Biological CC = Crime Control EI = Encryption Items FC = Firearms Convention MT = Missile Technology NP = Nuclear Proliferation NS = National Security RS = Regional Stability SI = Significant Items SS = Short Supply UN = United Nations SL = Surreptitious Listening 30

31 Commerce Department Exports Do I need a license? It depends Does ECCN require an authorization for the country you are sending it to? Is it eligible for an exception? If not License is a BIS-748P and is filed electronically in SNAP-R State Department Exports A license is required for most State Department Exports A few select exemptions may apply Licenses DSP-5 DSP-6 DSP-61 DSP-62 DSP-73 DSP-74 DSP-85 Permanent Export - unclassified hardware and/or tech data Amendment for DSP-5 Temporary Import - unclassified hardware being returned Amendment for DSP-61 Temporary Export - unclassified hardware Amendment for DSP-73 Permanent and temporary export/import - classified Hardware and/or technical data (DSP - Department of State Publication/Proforma) 31

32 State Department Export Applications Agreements TAA Technical Assistance Agreement MLA Manufacturing Licensing Agreement WDA Warehouse and Distribution Agreement Other GC AO* DSP-83* General Correspondence Letter Advisory Opinion Re-transfer and End-Use Assurance Document * Not an export authorization Export License Application Process Should a license be required U.S. Exporter will prepare and send it to the appropriate agency that has jurisdiction over the export of that item Military items/technology State Department Directorate of Defense Trade Controls Civil items/technology (including munitions list items transferred to the CCL from the ITAR under ECR) Commerce Department Bureau of Industry and Security Knowing jurisdiction is crucial to getting the right license request 32

33 Export License Application Process Once received by the Regulating agency, the license is then often referred to, or staffed out to other agencies or offices for their review Final disposition of the license provided to the exporter using input from reviewing organizations Approve Approve with proviso/limitations/conditions Deny Return Without Action (RWA) Now What? Three long days ahead this is a very complicated business Don t worry if you can t remember it all, it takes time to get good at this... Hopefully you will leave with the basic knowledge and tools that you need to ask the right questions of the right people Much of your success will depend on: Your knowledge/training Your relationships with peers in this field 33

34 Questions To Get You There Simple First Steps for Export Compliance Ask yourself these six (6) simple questions: Questions To Get You There Ask yourself these six (6) simple questions: 1. What is it? Tech data, Hardware, Services, Information, etc 2. Is it controlled? All hardware is controlled for export, but not all data or information is. Remember definitions in the ITAR and EAR of what is and is not controlled (Public domain information, financial information, and delivery schedules are examples of what is NOT controlled). 3. Which agency has jurisdiction over its export? (Jurisdiction and Classification process) State (ITAR) Commerce (EAR) 4. Who will handle or access it and why? Identify the chain of custody for all that will get access. 5. Who will ultimately get it? Who is/are the ultimate end-user(s)? 6. For what purpose is it being exported? Program, Platform, End-use 34

35 Export Compliance It s not the squeaky wheel be aware of what is going on in your Company You don t always know there s a problem until something goes terribly wrong... At that point it may be too late for the easy fix! On To The Questions Good luck and ask lots of questions People are here to help 35