Working with the government is a world of acronyms and multi-level agencies. In the case of international arms trading, there is one particular acronym that you will hear a lot about: ITAR. ITAR, or International Traffic in Arms, is a certification standard that is managed through the State Department. Any U.S.-based company who wishes to partner with outside nations but be ITAR-compliant and -certified.

Greenwood Aerospace is your ITAR-certified aerospace expert, ready to offer support for all your program needs. With over forty years providing comprehensive service in the aerospace industry, we are dedicated to simplifying logistics and supply chain needs so you can focus on keeping your program in flight and on time. Our services include: 

And those are only a handful of our many offerings. Contact us today to speak with one of our aerospace specialists, and discover everything we provide our contractors.

Now, let’s take a look at what an ITAR-controlled facility is, what it means, how it helps, and why you should work with one. 

Understanding ITAR

Before we dive into this any further, we need to build the foundation of this reading by explaining what ITAR is

The International Traffic in Arms Regulations (ITAR) is a United States government regulation that controls the export and temporary import of defense articles and related technical data. The ITAR is administered by the Directorate of Defense Trade Controls (DDTC) of the United States Department of State.

A fighter jet climbs into the sky as it retracts its landing gear

The ITAR applies to all individuals and entities within the United States and foreign persons who engage in activities in the United States that are subject to the ITAR. The ITAR covers various items, including weapons, ammunition, aircraft, spacecraft, and related technical data.

To be ITAR-compliant, a company must register with DDTC and obtain a license for each export or temporary import of a defense article or related technical data. The company must also maintain records of all ITAR-controlled transactions.

Penalties for ITAR compliance violations can be severe, including civil and criminal fines, imprisonment, and government contract debarments.

There are many reasons why you should work with an ITAR-compliant company. First, an ITAR-compliant company will have the necessary knowledge and expertise to ensure that your transactions are in compliance with the ITAR. Second, an ITAR-compliant company will have the licenses and registrations to export or temporarily import defense articles and related technical data. Third, an ITAR-compliant company will maintain the necessary records of all ITAR-controlled transactions.

If you are considering working with a company that exports or temporarily imports defense articles or related technical data, you should make sure that the company is ITAR-compliant.

The Differences Between ITAR and EAR

There are two different but fairly similar regulatory entities that both impact the international trade of military equipment. We’ve covered ITAR above, but let’s talk a little bit about Export Administration Regulations.

A close-up of a Herc propeller

The Export Administration Regulations (EAR) are another important set of regulations. EAR is a Department of Commerce's Bureau of Industry & Security project, unlike ITAR, which is a State Department program. 

EAR is a federal code found in Title 15 CFR. Here are a few of the key parts of EAR compliance:

  • EAR requires export information to be filed when U.S. Possessions are transferred to foreign nations or areas (see 15 CFR 758.1(b) and 772.1). 
  • There are requirements to impose certain export controls from the EEI in the EAR (See 15 CFR 758.1(g) and 15 CFR 758.2).
  • The export control information must be on export control documents on shipments that are exempt from AES filing (See 15 CFR 758.1(d).

The main difference between the two is that ITAR is for items that are strictly used for military operations. For instance, a main battle tank or armored personnel carrier are only used in military operations and has no use or value outside of tactical applications. 

The EAR regulates items being traded as military assets but not military-specific. If a business jet is being sold to a foreign government for military use, it falls under the umbrella of EAR.   

Industries Affected by ITAR

The industries most affected by ITAR are aerospace and defense, military, satellite and space, and nuclear technology. As you would expect, these are highly regulated industries because we can’t afford to let anyone have access to our military equipment and technology. So, the potential buyers must be fully vetted, which we have discussed at length in our Foreign Military Sales article

However, there are regulations on both sides of the transaction: FMS is about vetting the buyer, ITAR and EAR are about the seller. Industries impacted by both include: 

  • Aerospace and Defense
  • Military Technology
  • Satellite and Space Technology
  • Nuclear Technology

Let's explore each in their relation to ITAR.

Aerospace and Defense

All items that fall under ITAR jurisdiction are listed in the U.S. Munitions List. 21 distinct categories make up the USML, and every ITAR item is under one of those categories. 

Aerospace and defense fall under several of these categories, namely:

  • Launch vehicles, guided missiles, ballistic missiles, rockets, torpedoes, bombs, and mines (cat. IV).
  •  Aircraft and all related articles. This pertains to all aerial assets, from UAVs to fighters (cat. VIII). 
  • Fire control, laser, imaging, and guidance equipment. These would be fire control systems for all kinds and types of delivery devices (cat. XII). 
  • Spacecraft and associated equipment (cat. XV).

Anything in the aerospace and defense industry that is sold for the specific purpose of being used as an instrument of war must be sold from an ITAR-controlled vendor. The point of this is simple: our technology is highly sophisticated and sensitive. We must control who has access to that information and to what degree, because once it is in their possession, they can (not the right) exploit that technology. 

Military Technology

All dedicated military technology is subject to ITAR control since that is the point of ITAR. 

Again, this is all dedicated military technology. If the technology is dedicated military technology, it must be regulated by ITAR. So, under this umbrella is all manner of tech, both kinetic and non-kinetic.

A C-130 Hercules in landing profile.

Kinetic weapons are anything that goes boom, basically—bombs, missiles, artillery, small-arm munitions, etc. 

Non-kinetic is a whole host of military technology used for everything, especially ISR and communications. The U.S. fields the most advanced communications suite in the world, so keeping that information secure is of deadly importance. 

Satellite and Space Technology

The importance of a presence in space has been well-known since the U.S. won the Space Race decades ago (and before we won it). It is the marquee location to keep tabs on everywhere in the world. 

If our satellite and space technology were to be compromised, it would have a dire impact on our defensive apparatus as a whole.  

Nuclear Technology

The most sensitive technology that the U.S. shares is nuclear technology, so it is extremely important to keep this information secure and safe. The proliferation of nuclear-related materials and technology would have grave consequences for the national security of the U.S. 

This speaks to more than just nuclear weapons; nuclear energy secrets are afforded high levels of security because the technological crossover is so close. Now, this isn’t just referring to the hardware or software of nuclear technology. Also included in ITAR compliance are the following:

  • Plans
  • Diagrams
  • Photographs
  • Various other technical documentation was used to build ITAR-controlled military hardware. 

What Is an ITAR-Controlled Facility?

Okay, we have talked a lot about ITAR, like what it is, how it differs from EAR, and even what is covered under ITAR. But what exactly is an ITAR-controlled facility? 

The Department of Defense has extremely strict standards for all things supply and logistics, from MIL-SPEC packaging to warehousing. These stringent standards are in place because the weapons being stored or shipped must be in peak working order when they reach their destination. That hydraulic pump may be the difference between the F-16 sitting on alert or it being parked in the sunshade, waiting for parts. 

An ITAR-compliant facility is an American operator that is registered for ITAR. Beyond just a basic registration, though, the facility needs to have an established program for compliance and the necessary controls for sensitive military hardware. ITAR-controlled facilities are already equipped with the processes and equipment to meet military-grade shipping and packing requirements. 

The ITAR registration process has a few steps that must be followed:

  • All registration fees will be paid
  • DS-2032 Statement of Registration from submitted and approved
  • Any additional supporting documentation

Once a facility has been registered and compliant, it must remain compliant to continue selling ITAR-regulated items. Part of this continuing compliance is a written and approved program in place that lays out the following tasks and responsibilities:

  • Risk assessment
  • Written procedures, which include facility policies
  • Established record-keeping practices and procedures
  • Standardize continuing training (quarterly, semi-annual, annual, etc.)  
  • Internal auditing program
  • Roles and responsibilities within the organization

Who Needs to Be ITAR-Compliant?

Who exactly needs to be ITAR-compliant? That’s a very important question. First, any company that does business with the U.S. DOD must be ITAR-compliant, which makes sense since most of the things that the U.S. military acquires fall under the USML somewhere. 

9x19mm NATO ammunition.

But it doesn’t end with physical products. All organizations that produce information that concerns defense articles, services, or any other data are included in the USML. While the USML largely covers physical products, large pieces of it are regulations for digital products—technical manuals, diagrams, schematics, charts, maps, etc. 

The list of companies that must be ITAR-compliant does not end at the primary contractor. The shortlist of who must be ITAR-compliant includes:

  • Wholesalers selling to the U.S. DOD or abroad
  • Primary contractors
  • Tech and software providers
  • Distributors working in this space
  • Any third-party vendors

In short, the entire supply chain working with ITAR items needs to be ITAR-compliant. This is a huge undertaking, but ensuring our hardware and secrets' safekeeping is necessary. 

How to Achieve ITAR Compliance

If you are in this space and determine that your company needs to become ITAR-compliant, there are some steps that you must follow to make it happen. 

The first step in the process is registering with the Directorate of Defense Trade Controls (DDTC). The DDTC is a branch of the State Department tasked with regulating the commercial export of defensive articles. 

So, the first step is registering, which you can do here

Part of the registration process is a non-refundable fee, which you must pay when you enroll through DECCS. While you are setting up your account for ITAR-compliance, remember these things:

  • You will have to renew your ITAR registration annually
  • Submit your registration renewal at least two months (60 days) before it expires. 

Once your company is registered with DDTC and your dues are paid, you must adopt an ITAR compliance program. This demonstrates that your business has developed processes to ensure ITAR compliance and the DDTC has issued guidelines on setting up a compliance program. This is in the best interests of all parties involved, so use them judiciously. 

With the program up and running and a compliance program in place, obtain prior authorization for ITAR-controlled transactions. This is any articles, services, technical data, or anything else categorized under the USML

Next, make absolutely sure to track ITAR-controlled items all the time. You must know where they are located, who can access them, and when they are transferred. Once transferred, tracking them as far down the supply chain as possible is still a good idea. 

Finally, make sure that your cloud storage complies with ITAR. We meant it when we said that every organization dealing with ITAR-compliant items must also be compliant. Cloud storage should use end-to-end encryption as well as being ITAR-compliant

Penalties for ITAR Compliance Violations

ITAR is a serious program, and violating ITAR has serious consequences. By serious, we mean really serious. 

The penalties for violating ITAR compliance can be severe, including:

  • Civil penalties of up to $1 million per violation
  • Criminal penalties of up to 20 years in prison
  • Forfeiture of property
  • Exclusion from government contracts

It is important to note that the penalties for ITAR violations are not limited to the company or individual who committed the violation. Third parties, such as customers or suppliers, may also be liable for violations.

Let’s take a look at a couple of examples. 

In 2020, global aerospace giant Airbus agreed to pay nearly $4bn in global penalties to resolve bribery. 

“Airbus SE (Airbus or the Company), a global provider of civilian and military aircraft based in France, has agreed to pay combined penalties of more than $3.9 billion to resolve foreign bribery charges with authorities in the United States, France and the United Kingdom arising out of the Company’s scheme to use third-party business partners to bribe government officials, as well as non-governmental airline executives, around the world and to resolve the Company’s violation of the Arms Export Control Act (“AECA”) and its implementing regulations, the International Traffic in Arms Regulations (“ITAR”), in the United States.  This is the largest global foreign bribery resolution to date.” -U.S. Department of Justice (source).

More recently, ten ITAR-certified brokers were debarred in conjunction with the criminal court convictions. Don’t mess around with ITAR-compliance. You will lose if you do. 

Why Work With an ITAR-Compliant Company?

There are plenty of good reasons to work with an ITAR-compliant company. 

  • ITAR-compliant companies have the expertise and experience to navigate the complex ITAR regulations.
  • ITAR-compliant companies have the necessary licenses and registrations to export controlled items.
  • ITAR-compliant companies have security measures in place to protect controlled items from unauthorized access.
  • ITAR-compliant companies are subject to regular audits by the Department of State to ensure compliance.

Working with an ITAR-compliant company can help you avoid the risks and penalties associated with non-compliance, namely fines and potential criminal convictions.

Greenwood Aerospace is an ITAR-compliant organization specializing in procuring, storing, MIL-SPEC packaging, and selling aircraft parts and services. With our expertise and experience comes a certain level of credibility within the industry. It is an unwritten code, but there is inherent risk in conducting ITAR business with a contractor or vendor who is new to the game. There are so many potential pitfalls because the regulations are complicated. In this business, experience counts, and we've been doing this for more than four decades. 

Your business will see a boost in credibility and reputation by partnering with the established name of Greenwood Aerospace. 

Work With Greenwood Aerospace, Your ITAR-certified Expert

ITAR compliance is a big deal. There are so many different facets that attempting to understand them all is impossible. The USML is hundreds upon hundreds of pages long, covering every conceivable military article, product, service, and even data. If you are inexperienced in the military trades, you need to partner with a trusted advisor who will safely guide you through the legal complexities of ITAR compliance.

Greenwood Aerospace is that trusted advisor. Give us a call or click the link, and we can get started today!

Interested in more on ITAR? Check out these News stories next: 

  1. How to Become ITAR-certified
  2. What is ITAR and What Items Does it Cover?
  3. An In-depth Look at Government Contractor Defense & Military Procurement
  4. Base/Facility Support Around the DOD