Export controls are US laws and regulations that restrict the shipment and transmission of certain articles, services, commodities, materials, software and technology outside and within the US for the purpose of protecting national security and advancing foreign policy. Complying with export control regulations and conducting export controls training is not only important for businesses, it’s also critical for university research departments that share information and technology with foreign nationals and work with items on the export control list.
What agencies oversee export controls?
Given the variety of purposes export controls serve, different US government agencies have their own rules and lists specifying who or what is considered export-sensitive and where export controls apply. Among the US agencies are the:
- Department of Commerce – Bureau of Industry and Security (BIS) implements and enforces the Export Administration Regulations (EAR), which regulate the export and re-export of most commercial items, primarily dual-use items, that is, products that are commercial in nature but could be used in a military application. The EAR also regulates items with a purely commercial purpose..
- Department of State, Directorate of Defense Trade Controls oversees defense articles and defense services under the International Traffic in Arms Regulations (ITAR).
- Department of Treasury, Office of Foreign Assets Control (OFAC) prohibits or restricts trade with a list of countries and an ever-growing directory of individuals and companies subject to economic and trade sanctions.
Who and what is subject to export controls?
Export controls apply to transfers both outside of the US to anyone, including US citizens or foreigners; and inside the US to individuals who are not US citizens or green card holders. Export laws apply to the disclosure or transfer of technical data through face-to-face meetings, telephone conversations, email, shared computer files, access to an IT network and site tours and visual inspections.
In determining if an export transaction is controlled, consider these four questions:
- What is being exported?
- What is the end use?
- Where is the export going?
- Who will be involved in the transaction?
Penalties for export violations
Violations of export control laws can result in a range of negative consequences for individuals and organizations including disciplinary action and termination, debarment, reputational damage, fines and prison sentences. A recent example is an aerospace and defense contractor who agreed to pay $13 million to resolve allegations it exported defense technology and software in violation of the Arms Export Control Act (AECA), and the International Traffic in Arms Regulations (ITAR).
Complying with export control laws can be a complicated process and violations can be costly, underscoring the need for export controls training for any individual whose activities in and out of the US may be subject to these laws. Training can help reduce the risk of violations and penalties by raising awareness of the types of items that are controlled, the applicable laws and regulations, and the importance of complying with an organization’s export control policy and procedures.