Introduction to US Arms Control Regulations

Companies producing defense-related products must be aware of the U.S. regulations governing the sale of such products in order to conduct business. However, American arms control regulations have a layered legal history. As such, businesses ought to situate the current arms regulation landscape within its historical legal framework.

Arms Export Control Act (AECA) of 1976

The Arms Export Control Act (AECA) of 1976 empowers the President to oversee the import and export of defense-related articles and services. AECA stipulates that businesses and individuals must obtain licenses for the exportation of such defense-related shipments, which the President may grant at their discretion. The decision to grant an export license relies on several factors, such as the potential of such an export to: supply an arms race, arm terrorists, enhance the risk of conflict and negatively impact arms control and nonproliferation agreements. Defense articles and services regulated by AECA are detailed on the United States Munitions List and encompass a range of items specifically designed for military use.

Executive Order 13637: The Administration of Reformed Export Controls 

In 2013, President Obama issued Executive Order 13637, which amended the AECA. Obama delegated the power to oversee the import and export of defense articles and services to the Secretary of State barring some exceptions: the Secretary of Defense would oversee all defense articles and services with export controls assigned under Section 38 of the AECA, and the Attorney General would oversee “the control of [the] permanent import of defense articles and defense services”. 

International Traffic in Arms Regulations (ITAR)

The International Traffic in Arms Regulations (ITAR), which finds its origins in 22 U.S.C. 2778 of AECA and Executive Order 13637, governs the export of defense-related materials, including articles, services, and technical data, from the United States. Administered by the Directorate of Defense Trade Controls (DDTC), ITAR is designed to safeguard national security by controlling the dissemination of sensitive defense information and technology. Businesses must register with the Directorate of Defense Trade Controls (DDTC) for ITAR compliance. 

ITAR employs specific terms to define the scope of export-controlled items. 'Defense articles' refer to physical items with military application, while 'technical data' includes blueprints, plans, and instructions. 'Defense services' refers to any training and assistance related to the use of defense articles and services.

United States Munitions List (USML)

The USML is a categorization system within ITAR that lists and controls specific defense items. Exporters are encouraged to classify their own items using the USML, a process known as self-classification. Self-classification involves determining the appropriate ITAR classification for a product based on its description and intended use. Refer HERE for the full U.S. Munitions List. 

Export Authorization and Regulations

Authorization to export under ITAR requires registration with DDTC and obtaining the necessary permits, such as licenses, agreements, or exemptions. Exporters must comply with the regulations, which include restrictions on exports to certain countries and individuals. ITAR prohibits exports to countries that are not friendly to the United States or that may use the exported items for hostile purposes. ITAR regulations and restrictions by country are available HERE.

Export Administration Regulations (EAR)

The U.S. government implemented Export Administration Regulations (EAR) to provide guidelines to manage the export and import of an array of commercial products. Administered by the U.S. Department of Commerce, these regulations are designed to control the distribution of items with both civilian and military applications, known as dual-use items. EAR plays a significant role in safeguarding national security while facilitating international trade.

Determining Jurisdiction and License Requirements

Businesses can consult the Commerce Control List (CCL) to ascertain whether a product falls under the purview of the EAR. EAR provides an Export Control Classification Number (ECCN) for any products that fall under their jurisdiction. The ECCN is a unique identifier that classifies the item's export control status and is a crucial step in determining whether a license is necessary. The need for a license is contingent upon the item's technical specifications, the intended destination, the end-user, and the end-use of the product.

The Role of the U.S. Department of Commerce

The U.S. Department of Commerce serves as the primary enforcer of the EAR, ensuring that exports and imports comply with the regulations. The Department of Commerce issues licenses, conducts audits, and enforces penalties when violations occur. Non-compliance with the EAR can result in severe consequences, including civil penalties, criminal charges, and denial of export privileges. These penalties are imposed to deter violations and maintain the integrity of the export control system.

The Importance of EAR in International Trade

The EAR is not only a set of regulations, but also serves as a critical component of the international trade system by establishing trust and transparency in global commerce by regulating the flow of dual-use items. Regulating such items, in turn, contributes to the security and stability of global supply chains and markets.