International Traffic in Arms Regulations Export Administration Regulations Nadcap ITAREAR Training

1
International Traffic in Arms
Regulations/Export Administration
RegulationsNadcapITAR/EAR Trainingfor Auditors
2
Required Training for All Nadcap Auditors

• The following presentation is required reading
  for all Nadcap Auditors. This information is
  provided here to keep you abreast of Federal
  regulations that may impact your audits. It is
  essential that you be aware of this law to assure
  compliance.
• Please review the following information, print
  out the training affirmation page of the
  presentation and sign and return to PRI.
• Following review of this information, should you
  have additional questions, contact your Staff
  Engineer.

3
What is ITAR EAR?

• International Traffic in Arms Regulations
• Code of Federal Regulations Parts 120 130
• EAR
• Export Administration Regulations
• Full text of the Federal Law available at
• (http//pmdtc.org/reference.htm)

4
I am an Auditor -- Not
an Arms Trafficker!

• How Does this Impact Me?
• Job audits and your ability to review blueprints,
  specifications, or other documentation may be
  impacted by this law.
• U.S. Citizens, Registered Aliens, and valid
  Licensees are allowed to review this information,
  but then incur some responsibility under this
  law. These individuals are unrestricted.
• Non-U.S. Citizens (not qualified by above) are
  not allowed to review material covered by this
  law and are considered restricted.
• All auditors shall follow the requirements in
• NIP 7-07.

5
What is the Impact to Me?

• Many Nadcap participating prime contractors, are
  bound by this law and are required to assure
  control and relevant education.
• As you audit their parts, you must be aware of
  the requirements of this law should you encounter
  any ITAR/EAR hardware.
• The law provides for penalties including fines,
  jail, and civil penalties under U.S. criminal
  statutes.

6
Technical Data is an Exportable Commodity

• Technical data is included as an export under the
  ITAR regulations (http//pmdtc.org/reference.htm)
  
• Information required for the design, development,
  production, manufacture, assembly, operation,
  repair, testing, maintenance or modification of
  defense articles. This includes information in
  the form of blueprints, drawings, process
  specifications, photographs, plans, instructions,
  and documentation.

7
Export

• The definition of Export includes
• Disclosing (including oral or visual disclosure)
  or transferring technical data to a foreign
  person whether in the U.S. or abroad or
• Performing a defense service on behalf of, or for
  the benefit of, a foreign person, whether in the
  U.S., or abroad

8
Nadcap Internal Procedure 7-07

• NIP 7-07 has been issued to address Nadcap
  requirements with regard to ITAR and EAR.
• As defined in NIP 7-07, it is the Suppliers
  responsibility to identify any auditable material
  that is restricted under ITAR and EAR.
• The Auditor shall not be held liable for any
  unauthorized transfer of Restricted Data, unless
  such Auditor knew or should have known of the
  restricted nature of the data.

9
Nadcap Auditor Responsibilities

• Nadcap Auditors shall be thoroughly familiar with
  the requirements of NIP 7-07.
• Nadcap Auditors shall comply with the
  requirements NIP 7-07.
• Nadcap Auditors shall to aware of the ITAR/EAR
  regulations and understand the impact of these
  regulations.
• Nadcap Auditors shall know their status as
  restricted or unrestricted and the roles and
  responsibilities of that status.

10
Nadcap Auditor Responsibilities (Continued)

• Auditable material restricted by ITAR/EAR shall
  not be posted on eAuditNet or removed from the
  supplier facility by the Auditor. Contact the
  Staff Engineer for direction if objective
  evidence is necessary to support audit.

11
Recognizing ITAR/EAR Material

• May be identified as
• ITAR/EAR Control
• Export Control
• Identification may be on
• Face of drawing
• First sheet of specification or embedded in text
• Purchase Order
• May not be identified as such, but is on
• the covered Munitions List

12
Applicable at Non-U.S. Suppliers

• Suppliers located outside of the U.S. may be
  licensed under this legislation and may be
  processing ITAR/EAR material
• As Auditors for PRI and Nadcap, Restricted
  Auditors must be especially vigilant to comply
  with this U.S. law and avoid review of any
  ITAR/EAR material.

13
Overview of ITAR/EAR

• An overview of the ITAR/EAR Law follows. This
  overview was originally presented at the NASA
  Export Control Program website at
• http//www.hq.nasa.gov/office/codei/nasaecp/
• and has been modified for purposes of relation
  to Nadcap. While the examples given relate to
  NASA activities, all items on the U.S. Munitions
  List are covered by this law.
• Following review of this information and NIP 7-07
  at the end of this presentation please print out
  the following page, sign and return via fax to
  the Auditor Staffing Training Dept., 1
  724/772-1699.

14
Definitions Unrestricted Auditors Citizens of
the USA, Registered Aliens (Green Card Holders)
and valid licenses issued to non-US citizens who
are permitted access to information restricted
under ITAR and EAR Guidelines. Restricted
Auditors Non-US citizens who are not qualified
to have access to information restricted under
ITAR and EAR Guidelines.
15
Affirmation of ITAR/EAR Training

• Name___________________________
• I have read the ITAR/EAR Overview and NIP 7-07
  and I understand my role and responsibilities
  under this law. I understand that I am
  considered a
• Restricted or Unrestricted Auditor
• Circle the
  Appropriate
• and will act in accordance with the
  requirements.
• I understand that penalties for violation
  include fines, jail, civil penalties under U.S.
  criminal statutes.
• If, during the course of a Nadcap Audit, I
  should knowingly come into contact with ITAR/EAR
  material, I shall act in accordance with NIP
  7-07.
• Signature_________________________________________
  _____
• Date_____________________________________________
  ____
• Please fax to 1 724/772-1699 Auditor Staffing
  Training Dept.

16
U.S. EXPORT CONTROL LAWS AND REGULATIONS

• This material is intended only as an overview
  tool and does not provide all substantive
  information needed to make a responsible export
  decision. Please contact your Center Export
  Administrator or Counsel for assistance in
  interpreting and applying U.S. export control
  laws and regulations to your specific export or
  import requirement.
• Bob Tucker
• Director, Assessments and Technology Division,
• Office of External Relations
• and NASA Export Administrator

17
INTRODUCTION

• Just What Is An Export Anyway?
• A Simplified Definition
• The transfer of anything to a FOREIGN PERSON by
  any means, anywhere, anytime, or the knowledge
  that what you are transferring to a U.S.
  PERSON, will be further transferred to a
  FOREIGN PERSON.

18
U.S. Export Laws and Regulations

• AECA and ITAR (USML) - 22 CFR 120
• covers items such as Space Launch Vehicles (e.g.,
  the Space Shuttle), rocket engines, certain
  spacecraft (including all remote sensing
  satellite systems), missile tracking systems,
  etc. (both the hardware and the technology)
• EAA and EAR (CCL) - 15 CFR 730
• covers what is commonly referred to as dual-use
  items, including the Space Station (the hardware
  and certain technology)

19
U.S. GOVERNMENT PLAYERS

• STATE
• COMMERCE
• Bureau of Export Affairs
• DEFENSE
• Defense Threat Reduction
• Joint Chiefs of Staff (JCS)
• Others
• Arms Control Disarmament Agency
• TREASURY
• Customs
• Office of Foreign Assets Control

• WHITE HOUSE
• Office of Science Technology Policy
• National Security Council
• U.S. Trade Representative
• IC
• TRANSPORTATION
• Federal Aviation Administration
• JUSTICE
• Federal Bureau of Investigation
• ENERGY

20
U.S. Export Laws and Regulations

• Examples of Other U.S. Government Players, Laws
  Regulations
• Drug Enforcement Administration (21 CFR 1311)
• Food and Drug Administration (21 USC 301)
• Department of Interior (50 CFR 17.21,22,31,32)
• Department of Treasury (31 CFR 500)
• Department of Energy (10 CFR 205.300, 10 CFR 110
  810)
• Others

21
Reasons Certain Exports are Controlled

• National Security (NS)
• Foreign Policy (FP)
• Proliferation (MT, NP, CB)
• Short Supply (SS)
• Anti-Terrorism (AT)
• Crime Control (CC)
• High Performance Computer (XP)
• Regional Stability (RS)
• UN Sanctions (UN)

22
The International Traffic in Arms Regulations
(ITAR)

• 22 CFR 120-130
• Administered by the Department of State (Office
  of Defense Trade Controls)
• The United States Munitions List (USML)
• 21 categories of Defense Articles/Services
• If an item is listed, it is subject to the ITAR
• Example Category IV - Launch Vehicles, Guided
  Missiles, Ballistic Missiles, Rockets, Torpedoes,
  Bombs and Mines
• Example Category XV - Spacecraft and Associated
  Equipment

23
The United States Munitions List (USML)

• I - Firearms
• II - Artillery Projectors
• III - Ammunition
• IV - Launch Vehicles, etc.
• V - Explosives, Propellants, Incendiary Agents
  and Their Constituents
• VI - Vessels of War and Special Naval Equipment
• VII - Tanks and Military Vehicles
• VIII - Aircraft and Associated Equipment
• IX - Military Training Equipment
• X - Protective Personnel Equipment
• XI - Military Electronics
• XII - Fire Control, Range Finder, Optical and
  Guidance and Control Equipment

• XIII - Auxilary Military Equipment
• XIV - Toxicological Agents and Equipment and
  Radiological Equipment
• XV - Spacecraft Systems and Associated Equipment
• XVI - Nuclear Weapons Design and Related
  Equipment
• XVII - Classified Articles, Technical Data and
  Defense Services Not Otherwise Enumerated
• XVIII - Reserved
• XIX - Reserved
• XX - Submersible Vessels, Oceanographic and
  Associated Equipment
• XXI - Miscellaneous Articles

24
ITAR DEFINITIONS- Defense Article

• Important ITAR Definitions
• Defense Article - any item on the USML,
  including technical data.

25
ITAR DEFINITIONS - Public Domain

• Important ITAR Definitions
• Public Domain - information which is published
  and which is generally accessible or available to
  the public
• through sales at news stands and bookstores
• through subscriptions which are available without
  restriction to any individual who desires to
  obtain or purchase the published information
• through second class mailing privileges granted
  by the U.S. government

26
ITAR DEFINITIONS - Public Domain

• Important ITAR Definitions
• Public Domain (contd)
• at libraries open to the public or from which the
  public can obtain documents
• through patents available at any patent office
• through unlimited distribution at a conference,
  meeting, seminar, trade show or exhibition,,
  generally accessible to the public, in the United
  States

27
ITAR DEFINITIONS - Public Domain

• Important ITAR Definitions
• Public Domain (contd)
• through public release (i.e.., unlimited
  distribution) in any form (e.g., not necessarily
  in published form) after approval by the
  cognizant U.S. government department or agency.
• through fundamental research in science and
  engineering at accredited institutions of higher
  learning in the U.S. where the resulting
  information is ordinarily published and shared
  broadly in the scientific community.

28
ITAR DEFINITIONS - Public Domain

• Important ITAR Definitions
• Public Domain (contd)
• Fundamental research is defined to mean basic and
  applied research in science and engineering where
  the resulting information is ordinarily published
  and shared broadly within the scientific
  community, as distinguished from research the
  results of which are restricted for proprietary
  reasons or specific U.S. government access and
  dissemination controls.

29
ITAR DEFINITIONS - Public Domain

• Important ITAR Definitions
• Public Domain (contd)
• University research will not be considered
  fundamental research if
• the University or its researchers accept other
  restrictions on publication of scientific and
  technical information resulting from the project
  or activity, or
• the research is funded by the U.S. government and
  specific access and dissemination controls
  protecting information resulting from the
  research are applicable.

30
ITAR DEFINITIONS - Technical Data

• Important ITAR Definitions
• Technical Data - information which is required
  for the design, development, production,
  manufacture, assembly, operation, repair,
  testing, maintenance, or modification of defense
  articles classified information related to
  defense articles information covered by an
  invention secrecy order software directly
  related to defense articles.

31
ITAR DEFINITIONS - Technical Data

• Important ITAR Definitions
• Technical Data (contd) - does not include
  information concerning general scientific,
  mathematical or engineering principles commonly
  taught in schools, colleges and universities or
  information in the public domain. It also does
  not include basic marketing information on
  function or purpose or general system
  descriptions of defense articles.

32
ITAR DEFINITIONS - U.S. Person

• Important ITAR Definitions
• U.S. Person - a natural person who is a lawful
  permanent resident as defined in 8 U.S.C.
  1101(a)(20) or who is a protected individual as
  defined by 8 U.S.C. 1324b(a)(3). It also means
  any corporation, business association,
  partnership, society, trust, or any other entity,
  organization or group that is incorporated to do
  business in the U.S. It also includes any
  governmental (federal, state or local), entity.

33
ITAR DEFINITIONS - Foreign Person, Export

• Important ITAR Definitions
• Foreign Person - opposite of U.S. Person.
• Export - sending or taking a defense article
  out of the U.S. in any manner, except by mere
  travel outside of the U.S. by a person whose
  personal knowledge includes technical data or
  transferring registration, control, or ownership
  to a foreign person of any aircraft, vessel, or
  satellite covered by the USML, whether in the
  U.S. or abroad or

34
ITAR DEFINITIONS - Export
Particular note for Nadcap

• Export (contd) - disclosing (including oral or
  visual disclosure) or transferring in the United
  States any defense article to an embassy, any
  agency or subdivision of a foreign government
  (e.g., diplomatic missions) or disclosing
  (including oral or visual disclosure) or
  transferring technical data to a foreign
  person, whether in the U.S. or abroad or
  performing a defense service on behalf of, or
  for the benefit of, a foreign person, whether
  in the U.S. or abroad.

35
ITAR PROSCRIBED COUNTRIES

• Proscribed Countries - 22 CFR 126.1
• If a country appears on this list, it is
  (generally) U.S. policy to deny licenses, or
  other approvals, associated with exports and
  imports of defense articles and defense services,
  destined for or originating in that country.
• ITAR License Exemptions are trumped if a
  foreign person from any of these counties is
  involved i.e., a license must be applied for.

36
ITAR - PROSCRIBED COUNTRIES LIST (22 CFR 126.1)

• AFGHANISTAN
• ANGOLA
• ARMENIA
• AZERBAIJAN
• BELARUS
• BURMA
• CHINA (PRC)
• CYPRUS
• CUBA
• HAITI
• INDIA
• IRAN
• IRAQ
• LIBERIA

• LIBYA
• NIGERIA
• NORTH KOREA
• PAKISTAN
• RWANDA
• SOMALIA
• SUDAN
• SYRIA
• TAJIKISTAN
• VIETNAM
• YEMAN
• FEDERAL REPUBLIC OF YUGOSLAVIA
• SERBIA
• MONTENEGO
• ZAIRE

37
The Export Administration Regulations (EAR)

• Administered by the Department of Commerce
  (Bureau of Export Administration)
• The Commerce Control List (CCL)
• Divided into ten (10) categories (0 to 9)
• Complete listing of items controlled by the EAR
• Example Category 9- Propulsion Systems, Space
  Vehicles and Related Equipment

38
The (New) Export Administration Regulations (EAR)

• 15 CFR 730-774
• Category 0 - Nuclear Materials, Facilities and
  Equipment and Misc.
• Category 1 - Materials, Chemicals, Microorganisms
  and Toxins
• Category 2 - Materials Processing
• Category 3 - Electronics
• Category 4 - Computers
• Category 5 - Communications, telecommunications
• Category 6 - Optics, Cameras, Lasers, radar
• Category 7 - Guidance, navigation, altimeters,
  avionics
• Category 8 - Submersible systems, scuba, marine
  equipment
• Category 9 - Propulsion Systems, space vehicles,

39
EAR DEFINITIONS - Export

• Important EAR Definitions
• Export - an actual shipment or transmission of
  items subject to the EAR out of the United
  States or release of technology or software
  subject to the EAR to a foreign national in the
  U.S.

40
EAR DEFINITIONS - Controlled Technology

• Important EAR Definitions
• Controlled Technology - specific information
  required for the development, production, or
  use of a product which is itself controlled.
  The information takes the form of technical
  data or technical assistance.

41
EAR DEFINITIONS - Technical Data

• Important EAR Definitions
• Technical Data - May take forms such as
  blueprints, plans, diagrams, models, formulae,
  tables, engineering designs and specifications,
  manuals and instructions written or recorded on
  other media or devices such as disk, tape, or
  read-only memories.
• Technical Assistance - may involve transfer of
  technical data

42
EAR DEFINITIONS - Reexport, Publicaly Available
Information

• Important EAR Definitions
• Reexport - shipment from one foreign country to
  another foreign country
• Publicly Available Information - information that
  is generally accessible to the interested public
  in any form and, therefore, not subject to the EAR

43
EAR DEFINITIONS - Publicly Available Technology
and Software

• Important EAR Definitions
• Publicly Available Technology and Software - that
  technology and software that are already
  published or will be published arise during, or
  result from fundamental research are
  educational or are included in certain patent
  applications (see 15 CFR 734)

44
EAR DEFINITIONS - Items subject to the EAR

• Important EAR Definitions
• Items Subject to the EAR - items listed on the
  Commerce Control List (CCL) and those items
  designated as EAR 99

45
EAR EXPORT CONTROL CLASSIFICATION NUMBER

• Export Control Classification Number (ECCN) - a
  five character, Alpha-numeric symbol e.g., 9A004
• First Character (Digit)- identifies CCL category
  e.g., 9 is Propulsion Systems, Space Vehicles
  and Related Equipment
• Second Character (Letter)- identifies which of
  five groups the item is associated with e.g.,
  A is Equipment, Assemblies and Components

46
EAR EXPORT CONTROL CLASSIFICATION NUMBER

• Export Control Classification Number (ECCN) - a
  five character, alpha-numeric symbol e.g., 9A004
• Third through Fifth Characters (Digits)-
  identifies the type of control(s)

47
EAR CLASSIFICATION REQUESTS

• Classification Requests
• If an exporter is unable or uncomfortable in
  determining the classification of the item to
  be exported, a classification can be requested
  from BXA. BXA is obliged to classify an item
  or advise an exporter that an item is not subject
  to the EAR (and may be subject to the
  jurisdiction of another agency).
• Typically takes 10 working days from receipt at
  BXA

48
EAR LICENSE EXCEPTIONS

• License Exceptions - 15 CFR 740
• Examples
• TMP (use for certain temporary exports up to one
  year)
• GOV (U.S. govt official use and use by govt
  agencies of cooperating countries in their
  national territory)
• BAG (your right to take your personal belongings
  out of the country on a trip)
• CAUTION - Use exceptions with care and read all
  conditions/provisions.

49
ENHANCED PROLIFERATION CONTROL INITIATIVE (EPCI)

• Scope
• Foreign Policy controls requiring individual
  validated license (IVL) if U.S. exporter knows or
  is informed that Commodity is destined to a
  missile activity
• Origin
• Executive order 12735, Nov 16, 1990
• Interim rule announced, Aug 15, 1991

50
Nadcap Procedure NIP 7-07

• 1.0 PURPOSE
• This procedure provides requirements for ensuring
  compliance with the International Traffic in Arms
  Regulations (ITAR) and Export Administration
  Regulations (EAR). This pertains to the
  assignment of Nadcap Approved Auditors who are
  not citizens of the United States of America to
  audits and audit review by Task Group and NMC
  Members.
• 2.0 SCOPE
• In the area of technical audits, specifically
  ISO9000, QS9000, AS/EN/JISQ9100, Nadcap etc.,
  information regarding audit results are exchanged
  and accepted routinely. These audits are
  performed by US and non-US citizens and data from
  these audits are discussed and accepted by
  international customers. Caution must be taken
  in obtaining audit information, including
  technical drawings that are evaluated by the
  auditor.
• 3.0 RESPONSIBILITIES
• The Supplier is responsible for identification of
  conditions which require protection in accordance
  with ITAR and EAR. Scheduling is responsible to
  ensure that proper auditor resources are
  scheduled in accordance with identified
  restrictions. Auditors are responsible to
  identify and report any conditions which my
  violate controls required by ITAR and EAR. All
  parties shall protect data that is restricted
  under the ITAR and EAR.
• 4.0 DEFINITIONS
• See Quality Manual for definitions.

51
Nadcap Procedure NIP 7-07 Contd.

• 5.0 Guidelines for Restrictions
• 5.1 Suppliers Responsibility
• Prior to and at the beginning of the audit, the
  Supplier shall identify specifications,
  processes, and drawings (referred to as
  auditable material) which are restricted under
  the ITAR and EAR. The Supplier shall contact the
  owner of any information for clarification when
  unsure about whether information is export
  controlled under ITAR or EAR.
• The Auditor should remind the Supplier of this
  obligation. The Auditor shall not be held liable
  for any unauthorized transfer of Restricted Data,
  unless such Auditor knew or should have known of
  the restricted nature of the data.
• In the event auditable material is under the ITAR
  and EAR, the supplier can either
• Request an Unrestricted Auditor, or
• Work with PRI Staff (Unrestricted Staff per 2.0)
  to provide and discuss appropriate auditable
  material, so that the PRI staff can provide
  appropriate direction to Restricted Auditors or
• Limit the audit to auditable material not
  restricted under the ITAR and EAR.

52
Nadcap Procedure NIP 7-07 Contd.

• 5.2 PRI/Nadcap Responsibility
• Appropriate guidelines and documentation is
  essential for conformance to the ITAR and EAR.
  Therefore, the following items shall be included
  in the business operations
• a. Supplier agreements notifying applicants of
  ITAR and EAR requirements/concerns shall be
  signed when scheduling an audit.
• b. The supplier shall be notified by the
  Scheduling Staff when the auditor is assigned
  whether their scheduled auditor is Restricted or
  Unrestricted.
• c. No auditable material, restricted by the ITAR
  and EAR shall be posted on eAuditNet.
• d. Auditable material, identified as export
  controlled and/or otherwise restricted by the
  ITAR and EAR, shall not be removed from the
  suppliers property.
• e. Auditors shall be provided appropriate
  counseling as to the ITAR and EAR regulations.
• f. Staff will be provided training as to the
  intent of these regulations. Training will be
  listed on h-frm-02 PRI New Nadcap Employee
  Checklist, or the Affirmation of ITAR/EAR
  Training sheet, as applicable.
• g. In the event that information covered under
  the ITAR or EAR are inadvertently witnessed by a
  Restricted Auditor, the auditor shall note this
  event in their Cover Letter in eAuditNet and
  inform the Supplier. This event shall also be
  formally reported to PRI via telephone call to
  the appropriate Staff Engineer within 1 calendar
  week following the close of the audit.

53
Nadcap Procedure NIP 7-07 Contd.

• 5.2 PRI/Nadcap Responsibility Continued
• h. NMC/Task Groups members who are Restricted per
  Section 2.0 shall not review auditable material
  restricted by the ITAR and EAR.
• i. Any exceptions, deviation or non-compliance to
  these guidelines shall be duly noted in an
  incident report (i-frm-37) initiated by the
  appropriate Staff Engineer. The Prime Members of
  the Task Group shall be notified and consulted to
  determine any additional actions required. (i.e.
  Notification of Appropriate Personnel,
  Organizations, etc.)

54
Nadcap Procedure NIP 7-07 Contd

• 6.0 REFERENCE DOCUMENTS
• Quality Manual
• 7.0 DOCUMENT REVISION HISTORY