Making ITAR Your Friend –All You Ever Need to Know!

Debbie ShafferBoulder OfficeJuly 18, 2012

At long last….

Licenses – What are they, what do they accomplish?

DSP-5 The permanent export of unclassified

hardware and/or technical data DSP-73

The temporary export of unclassified hardware and/or technical data

DSP-61 The temporary import of unclassified

hardware and/or technical data manufactured abroad

Licenses – What are they, what do they accomplish? (Cont’d)

DSP-85: The permanent or temporary export of

classified hardware or technical data.

Permanent Imports

Bureau of Alcohol, Tobacco and Firearms Separate munitions list Not as extensive as the ITAR list Items on the list require a permit to

import

Technical Assistance Agreement (“TAA”)

The only license that allows extended defense services

TAA must include certain information about participants, project, and the tech data/defense services to be performed.

New form to be implemented in preparing TAAs.

Parties to the TAA

Signatory parties (“Licensee”) US team members Foreign team members

Sublicensees US contractors/subcontractors Foreign participants

Foreign Employees Ours Theirs

What about Dual/Third Country Nationals?

Must ask all US partners whether we need to cover any foreign person participation

Must ask all foreign partners to verify the status of citizenship of their foreign employees.

“Briefing Form”

When TAA or licenses are received, the Project Manager will be provided with a Briefing Form, and asked to sign indicating responsibility for compliance.

Copy distributed.

With Approval Comes “Provisos”

Standard on all:Conditions of Issuance

1. This license is issued under the conditions cited in 22 CFR § 120 - 130, including the provisos as applicable, that:

A. It shall not be construed as implying U.S. Government approval or commitment to authorize future exports of any article (equipment or technical data) on the Munitions List, or a U.S. Government commitment with regard to any proposed manufacturing license or technical assistance agreements which may result from an authorized export.

“Standard” Provisos, Cont’d.

B. If a license is issued for technical data only, it does not authorize the export of any hardware; if a license is issued for hardware only, it does not authorize the export of any technical data, unless specifically covered by an exemption.

The issuance of this license does not release the licensee from complying with other requirements of U.S. law and regulations.

“Standard” Provisos, Cont’d.

2. The prior written approval of the Department of State must be obtained before U.S. Munitions List articles exported from the U.S. under license or other approval may be resold, diverted, transferred, transshipped, reshipped, reexported to, or used in any country, or by any end-user, other than that described on the license or other approval as the country of ultimate destination or the Ultimate end-user.

“Real” Provisos (Unique to your TAA)

Proviso 1 is always the expiration date Hardware shipments –

Export or temporary import of hardware in furtherance of this agreement by separate license is authorized. If used, separate license, submitted in accordance with Section 15.1 of the Guidelines for Preparing Electronic Agreements, must reference this agreement and must not exceed $10,000. This proviso does not limit the use of separate authorizations for repair and replacement purposes.

“Real” Provisos, Cont’d.

NASA Requirements Applicant must provide NASA HQ, Export Control and

Interagency Liaison Division/Paula Geisz, 300 E. Street, SW, Washington, DC 20546, with a copy of the State-approved license and signed TAA.

Applicant and U.S. signatories to the TAA are authorized to transfer NASA-controlled technical data and defense services as described in the T AA and its Attachments. Transfer of other NASA non-public domain technical data in support of this T AA requires an amendment to this agreement; such an amendment must receive NASA approval prior to submission of the amendment to this office. Contact Paula Geisz for approval (phone: 202-358-1620, fax: 202-358-4080, email: Paula.L.Geisz@nasa.gov).

“Real” Provisos, Cont’d.

NASA Requirements (Continued) Applicant must brief applicable NASA

project managers/staff on the scope and limitations of access allowed by this license.

Technology Transfer Restrictions Design methodology, engineering

analysis or manufacturing know-how, as defined in 22 CFR 124.2(c)(4)(i-iii) MUST NOT be released.

Technology Transfers (Cont’d)

The applicant MUST NOT augment or suggest changes that optimize, enhance, improve or increase the foreign licensees' processes or their capability to design, develop, or manufacture. Collaborative design IS NOT authorized. This limitation DOES NOT preclude the applicant from discussing requirements, specifications, interfaces, functions, performance, and test requirements.

Technology Transfers (Cont’d)

All anomaly/problem resolution, repair, and modification for the foreign-built/modified components MUST BE accomplished solely by the foreign party. The applicant's independent analyses products and test data MUST BE limited to results only. Analyses released concerning problem reports, anomalies, and repair MUST BE limited to problem identification, cause, analysis rationale, results of analysis, and verification of the foreign licensees' corrective actions. This does NOT prohibit the applicant and the foreign licensees from having meetings and discussions related to the spacecraft/instrument specifications and requirements and the indications of non-compliance or non-conformance.

Access Restrictions

Applicant MUST comply with 22 CFR 125.5(c) for foreign licensee visits to the applicant's facilities and:

a. Foreign licensee personnel MUST NOT have access to any areas at applicant's facilities where activities occur pertaining to other U.S. Government (USG) systems not related to this Agreement.

b. Foreign licensee personnel MUST NOT be permitted access to the applicant's Information. Technology (IT) data sources/files or technical data NOT authorized under this license.

Access Restrictions (Cont’d) Information on USG systems, operations,

limitations and capabilities that is NOT germane to this license or NOT already in the public domain MAY ONLY BE offered, discussed or released by the applicant AFTER obtaining a written approval letter from the cognizant USG program office and/or agency. All released data, along with relevant USG approval letters, MUST BE included in the applicant's library of release technical data.

Recordkeeping

The applicant MUST maintain a library of released technical data, subject to USG inspection and audit.

What is a “library”? How/Where will you “build” it? Who will maintain it?

“BAD” Proviso!

U.S. signatories to this Technical Assistance Agreement (TAA) MUST release technical data or engage in any technical meeting/discussions/interchanges with the foreign licensees through the applicant or through a separate license.

Not practical on big programs!!

Document Marking

When you send technical data, hardware, software, etc., it should bear an ITAR marking.

SwRI recommends standard language: This document contains technical data that is controlled

by the International Traffic in Arms Regulations (ITAR) (22 CFR 120-130) and may not be exported, provided, disclosed or transferred in any manner to any person, whether in the United States or abroad, who is not 1) a citizen of the Unite States; 2) a lawful permanent resident of the United States; or 3) a protected individual as defined by 8 USC 1324b (a) (3), without the prior written permission of the United States Department of State.

ITAR Exemptions

22 CFR 125.4(b)(2)

“…The following exports are exempt from the licensing requirements of this subchapter: Technical data, including classified information, in furtherance of a…technical assistance agreement approved by the Department of State…”

Exemptions Recordkeeping 22 CFR 123.26 When an exemption is claimed for the

export of unclassified technical data, the exporter must maintain a record of each such export. The business record should include the following information: A description of the unclassified technical

data, the name of the recipient end-user, the date and time of the export, and the method of transmission.

What’s Next? PLANNING!

Anticipate exports! A license is valid for 4 years! Get it early.

Temporary exports/imports Calibration Vibration Testing Integration

Meet Priority One

Contractual arrangement Consulting for difficult situations Preparation of export paperwork Find carrier Research requirements for foreign

countries

Always provide complete charge number 1.15.XXXXX

How to Successfully Ship or Receive Your Goods!

Edie BretzPriority One International Orlando, FL

Think about shipping!

When preparing the license application, think about export documentation requirements.

Include in the license all the U.S. freight forwarders and foreign intermediate consignees. Foreign Customs Brokers & Foreign Freight Forwarders

When an item’s name does not describe the item, describe it Example : “source” – is it the spare, the flight model, or something

else?

List dangerous goods items individually as you may need to ship them separately

Once your license is approved, review it!

Export Declaration

No more “SED”; now, we have “AES” (Automated Export System). AES is the system for collecting electronic export information (“EEI”).

Priority One files all AES filings for you.

• Using an agent to file your EEI does not relieve you from the compliance responsibilities.

Advance Filing of EEI Required

Mode USML 22CFR123.22(b)(1)

CCL 15CFR30.4

Truck 8 hours prior to departure

1 hour prior to arrival at US border

Air 8 hours prior to departure

2 hours prior to scheduled departure

Rail 24 hours prior to departure

2 hours prior to arrival at US border

Vessel 24 hours prior to departure

24 hours prior to loading of cargo on

the vessel

Duties and Taxes

At ports of entry, importer completes local documentation in local language and deposits applicable duty and taxes, at each country for each entry. Duties (varies, mostly based on CIF value) Taxes – VAT, GST

At time of departure and at same port, importer completes exit document

Deposit may be returned in full or portion in 2-6 months, in local currency (e.g., Yen, Euros)

How will you handle these fees?

How will you pay for the duties and taxes that will be assessed? Duty-free certificate Write a check – Pay duties and taxes Carnet

What is a Carnet? “Merchandise Passports.” 

international customs documents simplify customs procedures for the temporary importation

of various types of goods. 

ATA Carnets are use for - Commercial Samples (CS), Professional Equipment (PE) Exhibitions and Fairs (EF).

Carnets facilitate international business avoiding extensive customs procedures eliminate payment of duties and value-added taxes replace the purchase of temporary import bond

Benefits of Carnets

Carnets save time, effort, and money.  

Unlimited exits from and entries into the U.S. and foreign countries for a period of one year

Accepted in over 75 countries and territories Eliminate value-added taxes (VAT), duties, and the posting of

security normally required at the time of importation Simplify customs procedures (a single document for all customs

transactions, make arrangements in advance) , and at a predetermined cost,

Facilitate reentry into the originating country by eliminating the need to register the goods with Customs at the time of departure.

Obtaining a Carnet does not release your obligation to comply with U.S. Government export controls or foreign country import controls. 

Clearing Goods on a Carnet Components of a Carnet

Green Cover Sheet General List Certificates (Vouchers/Counterfoils)

Partial or Split Shipments Possible Avoiding a foreign Customs claim

Creating Carnet “Master List”

Carnet application contains a numbered list of all items to be exported Description with model/serial number Weight Value

STEP BY STEP

Step 1 Before Departing the U.S

sign lower right corner of green cover

Step 1

STEP BY STEP

Step 2 At U.S. Customs (departing)

stop at U.S. CBP Export Office for validation of: ▪ a) shaded “Customs” box on green

cover, and ▪ b) yellow exportation counterfoil #1

Step 2a

Step 2b

STEP BY STEP

Step 3 At Foreign

Customs (arriving) stop at foreign customs for validation of importation sheets: ▪ a) counterfoil #1,

and▪ b) voucher #1

Customs removes voucher

Step 3a

Step 3b

STEP BY STEP

Step 4 At Foreign Customs

(departing) stop at foreign customs for validation of▪ a) re-exportation

sheets: counterfoil #1, and

▪ b) voucher #1

Customs removes voucher

Step 4a

Step 4b

STEP BY STEP Step 5

At U.S. Customs (returning) stop at U.S. CBP Ship’s Office for validation of reimportation counterfoil #1

Step 5

After Final Return:Upon final use, make a full Carnet copy for your records and return the original to Debbie Shaffer or David O’Neal in the Export & International Affairs Office

Partial Shipments

For partial shipments Strike out lines

containing items not being taken or shipped

Amend ONLY the voucher copy never edit the

green sheet

Partial Shipments

Make sure your carnet shows the correct line items being exported.

All goods must leave the foreign country by expiration date.

1, 3,4, 6 - 25

1, 3, 4, 6 - 25

Transit Counterfoils - Blue

Used by customs to track goods “in transit” Moving from one country

to another

For example, might be used to transit the U.S. en route to Mexico from Canada

1 - 25

Step by Step

The Carnet, along with the goods, must ALWAYS be available for customs clearance and inspection.

Expired Carnets must be returned to the Export Office in San Antonio.

Carnet

Extra Sets: additional counterfoil/voucher sets enable you to visit more countries with the same goods.

Duplicate Carnet: used for a lost, stolen or destroyed Carnet. Expiration date remains the same

Replacement Carnet: by foreign customs approval, extends time during which goods may remain in-country

How to get a Carnet?

Give us a call, send us an e-mail 407-855-0925 Edie@priority-one.com Daniel@prioritty-one.com James@priority-one.com

Complete application form Describe the goods Countries visiting and transiting

How fast can I get the Carnet?

Standard Processing $ 2nd Business day

Rush Processing $$ Next business day

Same Day Pick up $$$$

Any questions?