There are very specific laws and regulations to be followed when dealing with exports. These laws and regulations are administered by the State Department for defense articles and services and by the Department of Commerce for dual use (i.e. military or civilian) items. They are in place to protect U.S. national security and foreign policy objectives (State) as well as to protect U.S. economic interests (Commerce).
EXPORTS are items or knowledge provided to foreign persons in the United States or abroad and to U.S. citizens in foreign countries.
Exportable items or knowledge may include, for example:
A foreign person is:
U.S. subsidiaries of corporations located outside the United States may require special review because, in some instances, they may be considered foreign persons and/or may employ foreign persons.
WHEN AND HOW DO EXPORTS OCCUR?
The party you want to communicate with or the country involved may not even be eligible for an export license because of U.S. government prohibitions.
ELEMENTS OF AN EXPORT LICENSE
Exports require government permission in the form of a license or written approval. The license must be specific and identify the items, services or data to be exported, and is issued for a fixed period of time.
Export licenses or approvals may be needed:
Some exports may be covered under an existing license and others will require a separate license. It is possible that you may need an export license covering a product before you begin to work on a contract. In any case, before you begin any of the activity with a foreign person, be sure you have the license you need.
Individuals violating the federal law and applicable regulations on exports are subject to civil and criminal penalties which include fines, jail terms, suspension or denial of exporting privileges and debarment from government contracting.
Employees involved with exports or doing business overseas must also be familiar with the laws and regulations governing these activities, namely. The Arms Export Control Act (AECA) as implemented by the international Traffic in Arms Regulations (ITAR), the Export Administration Act (EAA) as implemented by the Export Administration Regulations (EAR). The Foreign Corrupt Practices Act (FCPA), The Office of Foreign Assets Controls (OFAC) and the Anti-Boycott Act.
ITAR – These regulations administered by the State Department require that all exports of defense articles and services and technical data on the U.S. Munitions List be Authorized by a U.S. State Department approved export license, an approved agreement or an ITAR exemption.
EAR – These regulations administered by the Department of Commerce control the export of dual use items or items as specified on the Commerce Control List (CCL).
FCPA – This act prohibits any payments, offers of money or other items of value to an official of a foreign government or a foreign politician or political party for the purpose of improperly influencing the official’s actions or decisions in helping the company get or keep business. It also prohibits making false or misleading entries in company records. (See companion "Test Yourself" brochure on FCPA.)
OFAC – This agency controls the sanctions and embargoes authorized by the U.S. which prohibit exports to or the conduct of business with certain countries and/or governments.
ANTI-BOYCOTT ACT – This act prohibits companies and their employees from providing certain types of information to foreign customers and agreeing to certain contractual provisions such a supporting embargoes not approved by the U.S..
You want to buy a product from a UK company to support one of your military products. The UK company produces a standard product that is used in commercial boats. In order to satisfy your military requirement, you need to provide technical data to the UK vendor explaining how to modify their standard product to meet your requirement.
Your company has recently purchased a subsidiary located in Germany. You provide technical data to the German subsidiary to enable the subsidiary to manufacture one of your products.
You have been invited to make a presentation at a company offsite meeting to be held in Paris, France. Your presentation slides will include technical data, but you have been told that the audience is going to be U.S. citizens only.
You have been instructed by the Singapore Ministry of Defense to send spare parts they purchased from you directly to a Singapore company that manages their inventory. The Singapore company is not a party to your license.
You have an approved license to export a product to the Brazilian Ministry of Defense. After you received the approved license for the export of the product, the customer requested you to provide them with an enhanced version of the product.
You have been requested by the Algerian Ministry of Defense to provide them with intermediate level training for a defense article you already sold and legally exported to the Algerian Ministry of Defense.
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Last modified: March 11, 2006