The U.S. Government regulates exports and imports within the United States and overseas through the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR). Since the September 11, 2001 attacks, the U.S. Government has increased its scrutiny of educational institutions and various industries to ensure export control compliance. In addition, the U.S. Government launched the Export Control Reform (ECR) initiative to improve the entire export control and enforcement regime.
The ongoing scrutiny and latest reforms require U.S. exporters, small businesses, and individuals to review their practices and operating procedures and refresh their compliance programs. Centre Law & Consulting attorneys are ready to counsel clients, develop compliance policies and train employees, and represent companies in internal-investigations, disclosure, and enforcement matters.
Areas of practice and legal solutions include:
Export Control and Compliance are Important for the Following Industries:
The ITAR stands for the International Traffic in Arms Regulations. The ITAR is a set of U.S. Government regulations on the export and import of defense-related articles and services. Many U.S. Government contracts require that U.S. prime contractors are “ITAR compliant.” The U.S. Department of State is responsible for implementing the ITAR. Compliance with the ITAR requirements is very important.
The EAR stands for the Export Administration Regulations. The EAR is a set of U.S. Government regulations on the export and import of commercial items. Many of the commercial items may be “dual-use” which means that they both have commercial and military functions. The U.S. Department of Commerce is responsible for implementing the EAR. Compliance with the EAR requirements is very important.
According to the U.S. Department of Commerce, many controlled items, including software and technology, require a license from the Bureau of Industry and Security. Each exporter has the responsibility to obtain a license when the EAR requires it. When you are deciding whether a license is required, the U.S. Department of Commerce recommends to ask the following questions: (1) what is being exported? (2) where is the item being exported? (3) who will receive the item? and (4) how will the item be used?
Without a comprehensive compliance program, export violations may occur without knowing about them. Some of the potential danger areas include:
Penalties may range from criminal convictions, debarment, fines, loss of export and import privileges, suspension and termination of contract. For example, according to the recent U.S. Department of Commerce Bureau of Industry and Security (BIS) report “Don’t Let This HAPPEN TO YOU!,” in 2014, BIS investigations led to the criminal convictions of 39 individuals and businesses for export violations with penalties of over $137 million in criminal fines, and more than $1 million in forfeitures and 568 months in imprisonment, addition of 155 new parties onto the BIS Entity List, and 44 administrative export cases completed with over $60 million in civil penalties.
President Obama directed a broad-based interagency review of the U.S. export control system in order to strengthen national security and increase the competitiveness of key U.S. manufacturing and technology sectors. The review found that the current U.S. export control system was redundant and overcomplicated. As a result, the U.S. Government launched the Export Control Reform Initiative (ECR Initiative) to fundamentally reform the U.S. export control and enforcement system. Current reforms are divided into 3 separate phases.
President Obama created the Export Enforcement Coordination Center (E2C2) to enhance information-sharing and law enforcement and intelligence coordination concerning possible U.S. export control laws violations. The E2C2 is located within the U.S. Department of Homeland Security and the following federal agencies have presence in this center: U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, U.S. Department of Defense, Air Force Office of Special Investigations, U.S. Department of Defense, Defense Criminal Investigative Service, U.S. Department of Defense, Defense Intelligence Agency, U.S. Department of Defense, Defense Security Service, U.S. Department of Defense, Naval Criminal Investigative Service, U.S. Department of Energy, National Nuclear Security Administration, U.S. Department of Homeland Security, Customs and Border Protection, U.S. Department of Homeland Security, Homeland Security Investigations, U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Department of Justice, Federal Bureau of Investigation, U.S. Department of Justice, National Security Division, U.S. Department of State, Directorate of Defense Trade Controls, U.S. Department of the Treasury, Office of Foreign Assets Control, U.S. Export-Import Bank, Office of the Inspector General, U.S. Postal Service, Postal Inspection Service, and Office of the Director of National Intelligence, Office of the National Counterintelligence Executive.
There are many regulations involved in the U.S. export control and enforcement regime. In addition to the ITAR and EAR, exporters must comply with the Office of Foreign Asset Control regulations, the U.S. Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives regulations, U.N. Security Council sanctions, and international sanctions and embargoes.
Tyler Freiberger is an associate attorney at Centre Law & Consulting primarily focusing on employment law, litigation, and compliance with regulations on federal contractors. He has successfully litigated employment issues before the EEOC, MSPB, local counties human rights commissions, the United States D.C. District Court, Maryland District Court, and the Eastern District of Virginia. On behalf of Centre Law & Consulting, he has advised federal contractors on compliance with the Service Contract Labor Standards/the Service Contract Act and examined contractor products for BAA/TAA certification.