One of the most important areas of regulation for defense contractors is the International Traffic In Arms Regulations (ITAR). ITAR are the State Department controls that regulate the defense industry.[1] Companies regulated under ITAR are subject to a number of requirements including registration, licensing, restrictions on transferring controlled technical data and performing defense services, among others. Following recent amendments, a second set of regulations - the Export Administration Regulations (EAR)[2] - impose related requirements for government contracts firms and must be considered alongside ITAR. Contrary to popular belief, these apply beyond export transactions to many domestic activities of U.S. defense firms - they can apply even if the company’s only customer is the U.S. Government. Due to the potential civil and criminal liability involved, it is imperative for defense firms to have a clear understanding of these laws. The following provides an overview of these requirements and strategies for complying with them.
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[1] The ITAR can be found at 22 CFR Chapter I, Subchapter M, Parts 120-130.
[2] The EAR can be found at 15 CFR Chapter VII, Subchapter C.
