When your business is engaged in the weapons industry, you should know that there are sets of legislation that you have to abide by to ensure your operations are warranted. One of them is the International Traffic in Arms Regulation (ITAR), with which compliance is important especially when it involves the US Department of Defense (DoD).
Now, if you are new to the trade and only have a vague idea of what this regulation is, it might be high time for you to learn the information that you need to avoid the hefty fines that come with non-compliance.
What Is ITAR
ITAR is a set of government regulations enacted by the US Department of State Directorate of Defense Trade Controls (DDTC) to ensure that the country’s commercial exportation of defence articles and services is in line with their national security and foreign policy objectives. In essence, it dictates how defence companies should distribute their products to foreign entities.
Not only that ITAR governs the trade of physical products, but it also regulates the distribution of information related to the trade. This means that you should also have a military grade encrypted file sharing platform in place for your business.
Who Are Regulated by ITAR
Basically, the regulation stipulates that only US citizens can gain access to the United States Munitions List (USML) of items. However, the DDTC offers an exemption to that rule for specific purposes. For example, there are countries with standing agreements with the US that are consistent with ITAR policies, such as the UK, Canada, and Australia. So, if you are operating in one of these countries, you can do business with US defence contractors, given that you are compliant with ITAR.
The companies regulated by ITAR are:
- Wholesalers
- Distributors
- Third-party suppliers
- Contractors
- Software and hardware vendors
The fines for violating ITAR are stiff, which can run between $500,000 and $1,000,000, so make sure you are compliant to avoid such penalties.
How to Be Compliant with ITAR
Before you can start working with ITAR-covered business prospects and import or export regulated items, there are four steps that you should take, first.
-
Determine if your business is ITAR-controlled.
You should re-evaluate your business to know if ITAR compliance is necessary. One way to do this is by looking at all the products and services you offer, as well as the information your process. Also, you can check the USML list. If you fall into its categories, then you should be subject to ITAR.
-
Register your business with the DDTC.
You can register with the DDTC on their official website. Once you have completed the process, your application will be reviewed for approval.
-
Apply for a licence.
Once your registration is approved, you can already apply for a licence that allows you to legally trade defence-related products, services, and data. You can apply for the licence on DDTC’s official website as well.
-
Set up a compliant file-sharing platform.
Being registered with the DDTC and having a licence does not mean you are done. You still need to have a compliant file-sharing platform to be fully compliant with the International Traffic in Arms Regulation. After all, one primary goal of ITAR is to prevent sensitive defence-related information from falling into the wrong hands.
The Importance of Having a Compliant File Sharing Platform
Make no mistake—hackers will try to access your data. Thus, you should have an ITAR compliant file sharing solution that ensures secure information storage and distribution. When choosing a platform, check if it has built-in features that make your system up to the mark, such as:
- Country access restriction – Since your business involves sensitive data, you should have control over who can access it. With a government encrypted file sharing platform, you can restrict access by country, which means users from other countries will be kept out.
- IP address restriction – This means that only those who have approved devices can access your files.
- Secure physical location – This ensures your data will be housed at ITAR-recognised centres.
- Encryption – This ensures that your data can only be deciphered by the sender and the intended recipient.
A highly secure file-sharing solution is your strongest tool in keeping your business compliant with ITAR rules, so assess your options carefully.
Conclusion
Compliance with the International Traffic in Arms Regulation not only brings legal benefits but also increases your sales from importing or exporting defence products. In a way, it strengthens your credentials while giving you an edge in a competitive business environment.
So, take the time to re-evaluate your company and make sure it is fully compliant with this set of regulations.
For more information that you can use in running your business, check out the other articles on our site!
