So far, my focus has been upon on the issues involved with complying with the the International Traffic in Arms Regulations, 22 C.F.R., parts 120-130 (the “ITAR”), in connection with the export of defense articles, technical data and defense services from the United States. However, the ITAR is just one element composing the U.S. export compliance regime; there are a few other regulations and U.S. government agencies involved as well.This week’s post addresses the steps to be taken when the products you intend to export from the U.S. involve so-called “dual use” goods.
Do I Have a Dual-Use Commodity?
As I mentioned here, Step 1 of the export compliance analysis involves determining which regulation will control the export of your particular item or service. As I also mentioned, determining jurisdiction is a zero-sum game, as “either the goods and services are regulated by ITAR or they are not.” Id.
In short, if the goods do not appear on the United States Munitions List, ITAR § 121.1 (the “USML”), then those goods are probably not “defense articles” within the definition of tITAR § 120.6, and an export license from DDTC may not be required. See, ITAR §123.1, et seq. (export licenses for defense articles), and ITAR §125.1, et seq. (export licenses for technical data). If your contract does not contemplate furnishing services or technical data related to a defense article, then you probably are not be providing a “defense service” to that particular foreign entity within the meaning of ITAR § 120.9(a)(1)-(3); and an export license from DDTC may not be required for this as well. ITAR § 124.1.
However, this does not mean that your analysis is done yet. To the contrary, you may have a “dual use” item on your hands, and its export may still be regulated under the EAR. Under the EAR, the term “dual-use” denotes “EAR-controlled items that can be used both in military and other strategic uses (e.g., nuclear) and commercial applications.” 15 C.F.R. § 730.3. As the EAR further explains, “[i]n general, the term dual use serves to distinguish EAR-controlled items that can be used both in military and other strategic uses and in civil applications from those that are weapons and military related use or design and subject to the controls of the Department of State or subject to the nuclear related controls of the Department of Energy or the Nuclear Regulatory Commission. ” Id.
Thus, the term “dual use” includes those goods and/or services that could fall into the category of “defense articles,” but that arise from or are based upon commercial/civilian goods and services. However, successfully classifying your item as “dual-use” is only the first step in determining whether or not you will need an export license from the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”), in order to export your item from the U.S.
In my next post, I will walk you through a sample analysis under the EAR to determine whether you would need a license to export a particular foreign country or foreign organization, entity, government, or person, and why.
Simon Courtman is a lawyer at Fluet Huber + Hoang, a full service law firm focused on the needs of growing government contractors. He previously served in the United States Air Force. You can reach him by email here.