The Ultimate Guide to ITAR Compliance Checklists

Written by: Michael Greenman

By ensuring that export-controlled data isn’t shared without authorization from the U.S. government, International Traffic in Arms Regulations (ITAR) helps protect U.S. national security and restricts access to sensitive military technologies.

This simplified ITAR compliance checklist can help government contractors comply with the government’s strict export regulations. The following information will help you learn the key steps to meeting legal requirements and handling protected information correctly and confidently. This checklist is intended to provide best practices and suggested steps toward compliance with ITAR regulations. This information, and any other sources, should be tailored to specific organizational needs and always reviewed and approved by legal counsel prior to implementation.

In This Article:

• What Is an ITAR Compliance Checklist
• Benefits of ITAR Compliance
• What Types of Businesses Require an ITAR Compliance Checklist?
• ITAR Compliance Checklist

By using a checklist, companies can take necessary precautions to prevent the unauthorized transfer of sensitive export-controlled items. This can include items such as technologies and informational data that must be protected from potentially falling into the hands of unauthorized persons.

Related articles:

• What is ITAR?
• Guide to Government Contracting Compliance
• How Deltek Supports Compliance for Government Contractors

Although ITAR compliance is a requirement for many individuals and companies, it's more than just another regulatory challenge. Having an ITAR compliance program has many valuable benefits. Here are a few:

1. Access To Government Contracts: Many government contracts require ITAR compliance. Companies that have established an ITAR compliance program are seen as reliable and trustworthy partners for government agencies and can increase their chances of winning and maintaining contract awards.
2. Lower Compliance Risk: Complying with ITAR regulations minimizes legal risks that companies will face such as fines or criminal charges for mishandling export-controlled items listed on the United States Munitions List (USML).
3. Intellectual Property Protection: ITAR controls can help protect data, which will include your valuable IP from unauthorized access, theft or exploitation.
4. Competitive Advantage: Having an ITAR compliance program sets businesses apart from competitors, especially in government contracting and international markets.
5. Secure Operations: Implementing ITAR compliance measures helps companies define and refine their internal processes to increase operational security, transparency and efficiency.
6. Enhanced Reputation and Credibility: Adhering to ITAR compliance regulations demonstrates commitment to responsible, secure business practices. This signals trust and can help attract more business collaborations.

 

Your Guide to ITAR Compliance

Find out why International Traffic in Arms Regulation (ITAR) matters for government contractors and how to prepare your firm for compliance.

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ITAR compliance casts a wide net across the government contracting and defense industry, covering an array of organizations. From defense contractors to aerospace innovators, many entities must navigate ITAR compliance.

Let's explore the types of organizations that typically need ITAR compliance checklists.

Cybersecurity & Technology Contractors

Government contractors focusing on cybersecurity and related IT are at the forefront of export-controlled ITAR data protection compliance mandates. These organizations, which range from small startups to large enterprises, often handle sensitive information and technologies crucial to national security. They may provide IT security support, logistics management or specialized consulting to agencies ranging from the Department of Homeland Security (DHS) to the Department of Defense (DoD). ITAR compliance can be essential for these contractors to ensure they safeguard both classified and controlled unclassified information.

Defense Contractors

Closely related to cybersecurity contractors are defense contractors, who are directly involved in creating and supplying military equipment and services. These organizations design, develop, manufacture or sell defense articles and services listed on the United States Munitions List (USML). Their work might include producing advanced weapon systems, military vehicles or cutting-edge targeting technologies.

Aerospace Companies

The aerospace sector, which focuses on spacecraft and related components, is another key industry where ITAR compliance can be critical. Many aerospace technologies have dual-use potential, meaning they could have both civilian and military applications. As such, aerospace companies must be vigilant in managing the transfer of their technologies.

Research & Development Firms

Organizations that specialize in defense-related R&D also deal with export-controlled ITAR data. These entities could be dedicated research institutions within academia or divisions within large companies, working on advanced materials, electronics, sensors or propulsion systems. Their work often pushes the boundaries of defense and military technology, making security and ITAR compliance a top priority.

Military Equipment Manufacturers

Companies producing firearms, ammunition, armored vehicles and electronic warfare systems most certainly have ITAR compliance considerations, not just a legal requirement but as a fundamental part of their daily operations. Implementing the right security and access controls for handling and shipping weapons and manufacturing information is paramount.

Companies often need reliable guardrails for ITAR compliance.

1. Determine ITAR Applicability: This is the first step. Businesses must determine whether their products or services are included in the USML so that they can determine whether ITAR regulations apply. The USML is a list of products, services and related technology designated by the government as defense and space related.
2. Review ITAR Regulations: Firms should thoroughly review ITAR requirements and implement an internal awareness program to ensure key personnel have access to the latest ITAR policy information and internal procedures specific to your organization.
3. Determine Whether You Need to Register with the DDTC: Depending on your operations, you may need to register your business with the U.S. Department of State’s Directorate of Defense Trade Controls (DDTC). This includes completing and signing the Statement of Registration along with collecting and submitting supporting documentation and paying a registration fee.
4. Gather Supporting Documentation
   When you submit your Registration Form, you must also include registration documents, including your business license. You may also need Articles of Incorporation, potentially an organizational chart that illustrates your relationship with other entities such as subsidiaries, divisions, or affiliates. If applicable, you may need to submit other documents, such as a Federal Firearms License.
5. Classify Products: Companies should classify all their products according to the USML and provide a rationale for all their classification decisions.
   
   Pro Tip: Use the DDTC Decision Tool. The DDTC's free Order of Review Decision Tool recommends the most likely USML classification for each of your products or services. This tool is for guidance only and shouldn’t replace a thoughtful study of the USML itself.
6. Implement Security Measures: Contractors can safeguard export-controlled ITAR data by setting up access controls, encrypting all data and establishing clear standards for transmitting, storing and disposing of data. In general, only U.S. citizens on U.S. soil should have access items on the USML. However, the U.S. Department of State can issue exceptions to this rule.
7. Develop Export Procedures: Firms need the correct licenses to export items covered by ITAR. The license type will depend on factors such as the item's category, where it’s going and who will use it. Several license types cover the temporary or permanent export or import of unclassified defense articles. Contractors should also establish a system for screening end users and transactions and implement processes for monitoring and tracking exports.
8. Develop an Incident Response Plan: Firms should have a plan that clearly outlines procedures for reporting and addressing ITAR violations when they occur according to the contract guidelines.
9. Provide ITAR Compliance Training to Employees: Contractors should train their employees on pertinent ITAR regulations and best practices for safeguarding export-controlled ITAR data.
10. Maintain Records of ITAR-Related Activities: Firms should retain records in accordance with governing laws after they complete any ITAR-related transaction or activity. These records must be readily available for compliance audits and should include details of all ITAR-related activities, including:
• Manufacturing, acquisition and disposition of defense articles.
• Export licenses and agreements.
• Technical data related to defense articles.
• Transactions involving defense services.
11. Manage Third Party Risk: ITAR compliance doesn't end with the primary contractor firms. Conducting due diligence and verification on suppliers and third-party partners is essential, ensuring these organizations understand and comply with any shared ITAR requirements.
12. Develop an Internal Compliance Program: This program should establish internal controls and monitoring procedures and create an export compliance manual.
13. Conduct Risk Assessments: Contractors should perform risk assessments regularly on their ITAR-related procedures and activities to identify potential vulnerabilities in their processes.
14. Stay Up to Date: ITAR regulations continue to evolve. Companies should monitor changes and regularly update their compliance procedures in response.