Overview of the International Traffic in Arms Regulations (ITAR)

By Margaret McClellan Gatti, Esquire

Article Appeared in 2005 Official Export Guide.
All Rights Reserved

The International Traffic in Arms Regulations (ITAR) are administered by the State Department’s Directorate of Defense Trade Controls (DDTC).  The regulations promulgate the Arms Export Control Act (AECA) and govern the export of defense articles from the United States (U.S.). 

The listing of products that qualify as defense articles is embodied in the U.S. Munitions List (USML), which is found in Part 121 of the ITAR.  Responsibility for designating products as defense articles rests with the State Department.   In making its determination of defense article status for a given product, the State Department applies the policy statement outlined in Part 120.3 of the ITAR, which makes it clear that it is not the intended use (i.e. military or civilian) of an article after export that is relevant for determining whether an article is a defense item.  Instead, it is an item’s inherent capabilities and design, which are considered in determining whether or not an item should be given defense item status.

The ITAR policy statement further guides the State Department in defense article designations by presenting a two-part test for defense item status.   According to this two-part test, articles may be designated as defense items and placed on the Munitions List if they: (1) are specifically designed, developed, configured, adapted or modified for a military application; and do not have: (a) a predominant civil application; and (b) a performance equivalent to that of an article or service used for civil applications; or (2) are specifically designed, developed, configured, adapted, or modified for a military application and have significant military or intelligence applications, such that control by the State Department’s DDTC is necessary. 

Many exporters readily jump to the conclusion that Munitions item status is relevant only for tanks, fighter jets, and missiles and fail to consider even the possibility that their products are defense articles.  However, this is an erroneous (and rather dangerous) conclusion, because even a product as innocuous as a fuel gauge on an aircraft will qualify as a Munitions Item, if the aircraft in which the fuel gauge is installed is a Munitions List item and the fuel gauge was specially designed or specially modified for such aircraft. 

There are many reasons why it is important for exporters to make correct determinations of the defense article status of their products.  Foremost among these reasons is the fact that virtually all exports of defense articles require export licenses and that defense article exports made without such export licenses place the relevant exporter in violation of the ITAR – even in those instances when the exporter did not know that his or her product qualified as a defense article!

Other reasons why it is important for exporters to correctly determine the defense article status of their products include ITAR’s broad definition of export and ITAR’s inclusion as prohibited or embargoed countries a rather large number of countries that are not prohibited or embargoed by other U.S. government export control agencies.

With regard to ITAR’s definition of an export, it is important to keep in mind that the State Department defines the term “export” very broadly and that you may indeed be involved in an export transaction, even if your product does not physically cross U.S. borders.  According to ITAR, an “export” includes:

1.   Sending or taking a defense article out of the United States in any manner, except by mere travel outside of the United States, by a person whose personal knowledge includes technical data;  

2.   Disclosing (including oral or visual disclosure) or transferring in the United States any defense article to an embassy, agency or subdivision of a foreign government (e.g. diplomatic missions);

3.   Disclosing (including oral or visual disclosure) or transferring technical data to a foreign person, whether in the United States or abroad;

4.   Performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the United States or abroad.

Thus, according to ITAR, exports include disclosures and/or transfers of ITAR-controlled technical data that take place wholly within the United States when a foreign person is involved.  To gauge whether or not this type of export will occur, it is necessary to understand that for ITAR purposes, a “foreign person” is any person who is neither a U.S. citizen nor a U.S. “green card” holder. 

With regard to countries that ITAR considers prohibited or embargoed, the number as of the date of this article (July 2005) is 22 – not just the 4 countries (Cuba, Iran, Sudan and Syria) currently embargoed by the Commerce Department’s Bureau of Industry and Security and the Treasury Department’s Office of Foreign Assets Control.  Further, the ITAR embargoed countries include the People’s Republic of China – not just countries to which the U.S. does not export to under any circumstances.

Not only does ITAR cause additional export hurtles through its definition of export and its comprehensive listing of embargoed countries, ITAR also prescribes a registration requirement for exporters of defense articles and for manufacturers of defense articles—even those manufacturers who do not export the defense articles they make.  According to ITAR, manufacturers of defense articles as well as exporters of defense articles must register with the State Department’s DDTC and renew their registration statement as upon its expiry. 

Determining if an item is a defense article is not always easy.  This problem is not insurmountable, however, in that an exporter can submit to the State Department a written Commodity Jurisdiction Request (CJR) for an authoritative and binding decision.  Exporters who take this step, however, need to recognize that while the CJR is pending, the product for which the CJR has been submitted must be treated as a Munitions List item and can only be removed from that status if the CJ Ruling returned by the State Department prescribes that the item is NOT a Munitions List item.