Upcoming Seminars

Stumbling Over ITAR: How Does Industry Cope with the Regulations?

Tuesday - December 1, 2015

12:00 PM - 2:00 PM

Potomac Institute for Policy Studies 

901 N. Stuart Street, Suite 1200

Arilnigton, VA, 22207

What is ITAR?

Born out of the Arms Export Control Act (AECA) of 1976, the International Traffic in Arms Regulations (ITAR) authorizes the executive branch to control exports of “defense articles and services.” While a list of items and information regulated under ITAR are enumerated in the U.S. Munitions List (USML), interpretation is difficult and often includes ambiguous categories that reach deep into supply chains and research areas. ITAR places the burden on the developer possessing information. Essentially, every U.S. person is expected to understand the USML and export restrictions to prevent transfer of ITAR technical information to a non-U.S. person.

ITAR’s Effect on Industry

ITAR-compliant commercial enterprises cannot compete in a global marketplace in which other businesses have a self-advertised, ITAR-free competitive advantage, and are thus not frozen by the incessant threat of ITAR litigation. Small business is especially disadvantaged when competing with large multinational counterparts. Non-military systems that contain USML components become ITAR restricted, which induces foreign manufacturers to use non-U.S. components in order to market their systems as “ITAR-free”. This encourages U.S. companies to avoid participating in defense work for fear of tainting products with the ITAR label. Both domestic and foreign industries avoid purchasing American components in order to develop products that are exclusive of ITAR’s inherent complications. U.S. multinationals establish research centers abroad specifically to conduct research that might be subject to ITAR if performed by Americans, sacrificing American employment opportunities. Under ITAR, every commercial enterprise engaging in defense research work, together with all employees, must track the “U.S.-person” status of every staff member and every visitor. ITAR might not be such a burden if the USML were clear and concise; if the distinction between defense work and commercial research were delineated; and nationality were easily identified. However, globalization and increasing convergence of technology research with multi-use objectives makes discernment using the USML impossible. The regulations are dependent upon self- declaration by foreign persons, resulting in guesswork as opposed to compliance. In those areas in which U.S. technological dominance is not as commanding as it once was, protecting USML-related information from disclosure makes no sense. ITAR not only suppresses commerce by restricting foreign sales, but also erodes America’s technological superiority by inhibiting our best scientists and researchers from vital collaboration.

Seminar

This seminar will assemble leaders in ITAR-regulated industries and government officials who implement these policies. We will discuss the benefits and barriers created by ITAR and determine if, and how, its goals can be achieved while maintaining an environment conducive to industry innovation. A distinguished panel will examine ITAR’s implementation, its pitfalls and advantages, and potential alternatives. By creating an environment where industry and government can discuss these issues candidly, we seek to instigate positive change to better serve the goals on which ITAR was originally founded.