1. LESSON 8 International Traffic in Arms Regulation and Export Administration Regulation (Export Controls)
15November2013
Lesson 4: Safety Stock

2. Lesson Introduction
Given a contract with export requirements, the student will be able to relate the Defense Contract Management Agency (DCMA) surveillance responsibilities relative to the International Traffic in Arms Regulations (ITAR) and Export Administration Regulations (EAR).

3. Lesson Objectives
Upon completion of this lesson, you should be able to:
Identify the difference between ITAR and EAR with regard to export controls.
Recognize United States (U.S.) Export License stipulations relative to export controls.
Differentiate between the terms “U.S. Person” and “Foreign Person” relative to export controls.
Identify an export within a contractual requirement.
Identify controlled items with regard to export controls.
Recognize ITAR’s effect on the DCMA in the performance of certain Quality Assurance (QA) surveillance functions.
Lesson 4: Safety Stock

4. Lesson Topics This lesson covers the following topics:
ITAR and EAR Guidelines
Export Licenses/Exemptions
What Constitutes an Export
Types of Controlled Exports
QAS Surveillance Responsibilities

5. WIIFM? Introduce export controls to
Help avoid inadvertent mistakes that could result in severe penalties or loss of job.
Protect national defense information and the U.S. overall.

6. ITAR and EAR Guidelines
Lesson Topics:
ITAR and EAR Guidelines
Export Licenses/Exemptions
What Constitutes an Export
Types of Controlled Exports
QAS Surveillance Responsibilities

7. Topic 1: ITAR and EAR Guidelines
ITAR - Controls export of defense items (data, services, etc.)
EAR - Controls export of items used in military and non-military capacity

8. ITAR Authority ITAR 22 Code of Federal Regulation (CFR) 120-130
Overarching authority for ITAR: Public Law (PL) , Arms Export Control Act (AECA) of 1976, as amended (22 USC 2751 et seq.)
ITAR 22 Code of Federal Regulation (CFR)
Regulates
Export of:
Defense articles
Technical data
Defense services
Controlled by
U.S. State Department - Directorate of Defense Trade Controls (DDTC)
Violation Penalties
Criminal (Entities)
Up to $1M
Criminal (Individuals)
Up to $1M/10 years
Civil Fines
Up to $500K and forfeitures
Removal from federal service

9. Removal from federal service
EAR Authority
Overarching authority for EAR: PL 96-72, Export Administration Act (EAA) of 1979, as amended (50 USC 2401 et seq.)
EAR 15 CFR
Regulates
Export of “dual use” (i.e., suitable for military and non-military use), found on Commerce Control List (CCL)
Controlled by
U.S. Department of Commerce
Bureau of Industry and Security (BIS)
Violation Penalties
Criminal (Entities)
Up to $1M
Criminal (Individuals)
Up to $250K/10 years
Civil Fines
$10K - $100K
Removal from federal service

10. Removal from federal service
ITAR and EAR Compared
ITAR 22 CFR
EAR 15 CFR
Regulates
Export of:
Defense articles
Technical data
Defense services
Export of “dual use” (i.e., suitable for military and non-military use), found on Commerce Control List (CCL)
Controlled by
U.S. State Department - Directorate of Defense Trade Controls (DDTC)
U.S. Department of Commerce
Bureau of Industry and Security (BIS)
Violation Penalties
Criminal (Entities)
Up to $1M
Criminal (Individuals)
Up to $1M/10 years
Up to $250K/10 years
Civil Fines
Up to $500K and forfeitures
$10K - $100K
Removal from federal service

11. Department of Defense ITAR/EAR Authority
Under Secretary AT&L
Under Secretary Policy
DUSD (TSP&NDP)
DTSA
Under Secretary Intelligence
Department of State
DDTC
Department of Commerce
BIS
Defense Technology Security Administration
AECA
ITAR
U.S. Munitions List (USML)
EEA
EAR
Commerce Control List (CCL)

12. Authority
DoD adds Defense Federal Acquisition Regulation Supplement (DFARS) clauses and to raise awareness
Imposes obligation on the Requiring Activity to determine if supplier is expected to generate or require access to export-controlled items

13. Contract Clauses DFARS 252.225-7048
Mandatory for all contracts; suppliers must flow down requirements to subcontractors/vendors
Imposes obligation on
supplier to comply with applicable laws and
regulations regarding
export-controlled items

14. Question and Answer
Which U.S. agency is responsible for export control under the EAR 15 CFR ?
Department of State
Department of Labor
Department of Treasury
Department of Commerce

15. Export Licenses/Exemptions
Lesson Topics:
ITAR and EAR Guidelines
Export Licenses/Exemptions
What Constitutes an Export
Types of Controlled Exports
QAS Surveillance Responsibilities

16. Topic 2: Export Licenses/Exemptions
ITAR export controls
U.S. person
Foreign person
End-use and end-user

17. Export Controls (1 of 3) ITAR controls exports:
Of defense articles, defense services, and related technical data
From the U.S. to foreign destinations
To foreign persons located domestically and abroad

18. Export Controls (2 of 3) U.S. Person No export license required
A U.S. citizen
Holds lawful permanent resident status (green card)
Is a “protected person” or refugee under the U.S. Asylum Program
No export license required

19. Export Controls (3 of 3) Foreign Person Export license required
Foreign Government, offices, and embassies
Ambassador
U.S. person representing foreign entity
Foreign Supplier/Vendor
Holds a student or work visa
Export license required

20. U.S. Export License Requirements
End-use and end-user specific for:
Parties listed on the license
Parties in countries listed on the license
Identified end-use on the license
State Department responsible for supplier’s licensing compliance
Some form of authorization is required to export controlled items to ANY foreign person.

21. Question and Answer
Which of the following individuals is classified as a “foreign person?”
U.S. citizen representing a Chinese business
Toyota executive from Japan
Filipino student attending Yale I II
II and III
I, II, and III

22. What Constitutes an Export
Lesson Topics:
ITAR and EAR Guidelines
Export Licenses/Exemptions
What Constitutes an Export
Types of Controlled Exports
QAS Surveillance Responsibilities

23. Topic 3: What Constitutes an Export
Export definition
Types of exports

24. E X P O R T An Export Defined
Transfer of anything to a foreign person by any means, anywhere, anytime
Knowledge that an item being transferred to a U.S. person who then transfers/exports to a foreign destination/person T R O P X E

25. Two Types Of Exports Intangible Tangible Electronic Oral Visual
Physical
Visual

26. Question and Answer
Which item would MOST LIKELY be considered an export within the contractual requirements for a U.S. citizen?
Sending a package to a relative in Chicago while visiting Italy
Explaining the company's valve redesign to a co-worker onsite in Malaysia
Discussing a project's grinding specifications with an old friend working for Toshiba in Tokyo
Explaining a weapon systems' technical manual to a coworker in Virginia through teleconference

27. Types of Controlled Exports
Lesson Topics:
ITAR and EAR Guidelines
Export Licenses/Exemptions
What Constitutes an Export
Types of Controlled Exports
QAS Surveillance Responsibilities

28. Topic 4: Types of Controlled Exports
Controlled exports include:
Defense articles
Defense services
Technical data

29. Defense Articles 22 CFR 121, U. S. Munitions List (USML) Ordnance
Aircraft
Military training equipment
Chemical/Biological agents
Nuclear weaponry
Tooling
Launching vehicles
Projectiles

30. Defense Services

31. Defense Services - Examples
Training a foreign person to use repair manuals
Collaborative discussion to explain key concepts or methodologies
Installing military software into a foreign system

32. Classified Information
Technical Data
Defense Article
Design Information
Classified Information
Software

33. Technical Data (cont.)
DCMA is NOT authorized to distribute technical orders or data to foreign suppliers.

34. Question and Answer Which item(s) are considered controlled exports?
Defense articles
Defense services
Civilian building codes
III
I and II
II and III
I, II, and III

35. QAS Surveillance Responsibilities
Lesson Topics:
ITAR and EAR Guidelines
Export Licenses/Exemptions
What Constitutes an Export
Types of Controlled Exports
QAS Surveillance Responsibilities

36. Topic 5: QAS Surveillance Responsibilities
QAS surveillance includes:
QAS awareness
Limited DCMA involvement

37. QAS Awareness
Host Nation Agreements do NOT act to exempt Host Nation activities from export control restrictions.
ITAR affects DCMA’s ability to rely on Locally Engaged Staff (LES) and Host Nation personnel to perform certain functions.

38. Points of Emphasis
DCMA is not required to perform surveillance of supplier's compliance with ITAR restrictions.
DCMA should ensure proper flow down of requirements via supplier's subcontract management process.

39. Question and Answer
Which of the following are QAS surveillance responsibilities in relation to ITAR?
Ensure proper requirements flow down
Assure supplier's compliance with export restrictions
Review Host Nation's QA activities
Authorize Host Nation QA surveillance for export controlled items

40. Summary Having completed this lesson, you should now be able to:
Identify the difference between ITAR and EAR with regard to export controls.
Recognize U.S. Export License stipulations relative to export controls.
Differentiate between the terms “U.S. Person” and “Foreign Person” relative to export controls.
Identify an export within a contractual requirement.
Identify controlled items with regard to export controls.
Recognize ITAR’s affect on the DCMA in the performance of certain QA surveillance functions.
Lesson 4: Safety Stock

41. Questions

42. Review Question 1
Which U.S. agency is responsible for export control under the ITAR 22 CFR 120 – 130?
Department of State
Department of Labor
Department of Treasury
Department of Commerce

43. Review Question 2 Which statement about U.S. persons is INCORRECT?
They are also a U.S. citizen.
They may possess a green card.
They require an export license.
They have guaranteed protection under the U.S. Asylum Program.

44. Review Question 3 Which of these are tangible export controlled items?
Facility visit
22 CFR 121, USML
Mail
Trade shows

45. Review Question 4
What policy document lists “controlled” defense articles such as ordnance, projectiles, and aircraft?
AQAP-2070
22 CFR 121, USML
STANAG No. 4107
DFARS (1)(ii)