ITAR compliance, or International Traffic in Arms Regulation, controls the import and export of products and services on the United States Munitions List. ITAR requires that all companies that supply the defence services and products must be ITAR-compliant, but what does that mean?
What Does it Mean to be ITAR-Compliant?
The simplest part of being ITAR-compliant involves registering with the State Department’s Directorate of Defence Trade Controls. The more difficult part is implementing the actual steps to abide by ITAR. Failure to do so will result in hefty fines of up to $1,000,000, as well as potential jail time.
It can be seen here that to be ITAR-compliant, a company must put data security at the forefront of its operations. According to ITAR, information and knowledge related to ITAR-controlled products may not be shared except with permission from the United States State Department. As a result, ITAR-compliant companies must invest in encryption, know the end-use and end-user of all products and services, and track their shipments. Most ITAR-compliant companies set up firewalls, assign user-specific log in information for each employee, regularly test security systems, and maintain a vulnerability management program. Additionally, all of these security measures and this user information must be meticulously logged.
What Industries are ITAR Compliant?
It may surprise you what companies may be ITAR-compliant. ITAR-compliant industries that may surprise you include engineered coating services, video conferencing technology, cloud network services, and a myriad of small manufacturing companies that supply parts for larger companies further along the production chain. All of these industries have a hand in providing material and services for the purpose of defence and therefore must be ITAR-compliant.
How Does This Benefit Non-Military Clients?
When purchasing from an ITAR-compliant company, you benefit from the regulations that ITAR has put in place for that company, even though ITAR regulations do not explicitly address research or commercial objectives of ITAR-compliant companies. ITAR-compliant companies must also keep impeccable records per ITAR requirements, which likely means your records with this company will be flawless. Additionally, ITAR-compliant companies are known for their great reputations and higher quality products.
ITAR-compliant companies are under much stricter scrutiny than most companies and face higher fines for company failures or missteps than most companies, so they act accordingly to perfect their record-keeping, distribution, and manufacturing protocols. The entire production chain for ITAR-controlled products must be ITAR-compliant so you can be sure that the product you are receiving is of the highest quality every step of the way.
Whether you are part of a company hoping to become ITAR-compliant or a client of an ITAR-compliant company, it is always a good idea to understand what that means for you. ITAR can be a complex thing to understand. For example, even companies who are ITAR-compliant often state that they are ITAR-certified, which is a designation that does not exist. But you now have a basic understanding of ITAR and are better prepared to make your own purchasing decisions with this information or prepare your company to become ITAR-compliant.