Choosing An ITAR Consultant For Your Business
Let’s face it: the world is rife with export “experts.” One way to handle this is to ignore the problem and pretend that ITAR compliance doesn’t matter. If you want to take this approach, it’s certainly your choice.
Another option is to ask questions that will help separate the wheat from the chaff so that you can choose the ITAR consultant who will serve your needs best.
These 10 questions come from my personal playbook.
They’ll help filter out all but the best con artists, and they’ll also identify those consultants who think they know export compliance because their former employers sent them to a seminar last year.
10 Questions To Help You Choose An ITAR Consultant
1. What’s Your ITAR Consulting Experience?
If they’ve read the regulations and attended an “ITAR basics seminar,” they probably don’t have a clue. This also applies to attorneys, since the regulations are not even covered by most law school’s curriculum.
If, however, they were in charge of export compliance for a company (or if they used to work for DDTC or BIS), then go on to question 2. They’re probably a keeper.
It’s important to know that an ITAR consultant needs to have several years of experience and knowledge across several fields to help your business. ITAR consulting is a highly technical field, and a potential ITAR consultant needs to have a thorough understanding about your company, your products, and all relevant trade regulations across different countries.
2. Test Their Knowledge With A Specific ITAR Question
Your ITAR consultant needs to have a firm grasp on international trade laws and the products that your company offers. However, you should also expect that your ITAR consultant can explain every detail to you in an easy-to-understand fashion. Since your business is ultimately responsible for ITAR compliance, you should expect that your ITAR consultants are able to provide prompt updates to you in a way that you and your team can understand.
If they say, “It’s really complicated. I would need more information,” and then they start using terms like “form, fit or function” and “ECCN,” you’re probably in good shape. Go to question 3.
3. Ask If The ITAR Consultant Can Get Your Company Certified
Can they make your company “ITAR certified”? If they say “Yes absolutely!” it means they’ll be good for comic relief.
“No ITAR certification program exists for companies, but we can help you mitigate risk and show maximum due diligence under the law” means you should buy that consultant a drink.
It’s unfortunate, but several of our current clients came to us after they were caught off-guard with fines that stemmed from their ITAR consultants not doing their job. Those clients were told by their ITAR consulting firm that the company was covered under a blanket (and non-existent) “ITAR Compliance Certification.” Your company is responsible to remain compliant in all areas of ITAR and international trade regulations, and you should expect your ITAR consultants to always work to ensure you are compliant under ITAR laws and regulations.
4. Is The ITAR Compliance Consultant Updated On The Latest Regulation Changes?
How do they stay current on the regulations? “The regulations never change” means they haven’t read the ITAR or EAR in at least six months.
“We get email updates on changes and notify our clients if they apply,” is a reasonable response. Since politics and economic situations change, ITAR regulations change with them. Your ITAR consultant needs to be well-versed in all things ITAR-related, and this means they need to maintain constant trends in the trading scene.
“We attend government conferences and constantly monitor the new proposals and rules” should make you weep with joy.
5. Is The ITAR Consultant An Optimist Or Realist?
What about Obama’s new export reforms? “He’s getting rid of export control” means they saw a 30-second news bite on CNN. “He’s going to make it easier for companies to comply” means they’re an optimist.
ITAR regulations are no joking matter, and we have heard of different companies going under or losing clients due to the consequences of non-compliance. If you want to ensure your company stays competitive in today’s changing world, then you need to do everything you can to remain in good standing with the U.S. government ITAR trade regulations.
Just like you expect your account to stay updated on changing accounting laws for your business, you should expect your ITAR consultant to remain updated on changing ITAR regulations and laws throughout the year. While there is no “right” timeline for this, you should talk to your ITAR consultants about how they remain updated on all news and updated trends for international trade to ensure that your business is protected from the severe impact that non-compliance can have on your operation.
“It’s complicated. There are a lot of moving parts involved, an aggressive timeline, and a number of good ideas being discussed.” Buy this person’s dinner to go with the drink.
6. Has The ITAR Consultant Helped Companies Through Voluntary Disclosure?
Have they ever helped a company mitigate (or avoid) a fine or penalty through a voluntary disclosure?
In a perfect world, your ITAR consultants will always be ahead of the curve and your business will avoid penalties that can impact your business operations. However, due to the highly complex and ever-changing world of ITAR regulations and trade laws, you should hire ITAR consultants who know how to react to situations in a timely manner.
One way you depend on your ITAR consultants in such times is in Voluntary Disclosures and other actions that come up due to government audits.
If you ask a potential ITAR consultant if they have conducted a Voluntary Disclosure and they answer with “No” then this means you don’t want their first test case to be you. Anything else is probably OK, as long as they don’t divulge confidential details about their clients.
7. Ask For Referrals- All ITAR Consultants Should Have Good References
Do you have any references I can talk to? They should be able to send you actual client references the same day you ask for them.
An ITAR consultant firm is a technical occupation. As ITAR consultants, we depend on our brand’s name and reputation and this is built from our years of experience working with companies across several fields to ensure efficient business operations. ITAR consultants need to provide a list of references and/or past clients as proof that they offer the services and professionalism that you demand.
If an ITAR consultant is not able to provide this list of past/current clients, or they take longer than a day to deliver the list, then these points usually mean they’re scurrying to contact friends, co-workers and long-lost uncles for a reference.
8. Is The ITAR Consultant Trying To Sell You Extra Stuff?
What do I need to be ITAR compliant? If they try to sell you a software license for five figures, politely show them the door. (Don’t get me wrong – some of the software solutions are great, but it takes more than fancy web portals to comply.)
ITAR consultants rely on a number of software suites and other tools to help them meet your demands in a timely manner. However, your ITAR consulting firm needs to be looking out for your best interests and not their bottom line. Good ITAR consultants don’t come cheap, so if you are paying less than you think you should, then you likely will be upsold in other areas that you don’t need.
These upsell can all add up and actually account for more costs than if you hired a reputable ITAR consulting firm to begin with.
Your ITAR consultant should be able to provide you with a clear plan to address your international trade needs, and they should be able to outline a logical progression that includes things like policies, procedures, training, tools/resources, organizational structure (and maybe software, too.)
9. Does The ITAR Compliance Consultant Have Real-World Experience?
Have they ever set foot inside a manufacturing plant, engineering center, research lab, or any other location where actual ITAR work occurs?
ITAR consultants are a special breed because they need years of hands-on experience with company operations while also have highly technical knowledge about international trade laws. This is why professional ITAR consulting firms often bill with retainer fees- because ITAR consultants need to blend real0-world business knowledge with current laws and regulations. All of this adds up to lots of time in the background as the ITAR consultant works to prevent your company from receiving penalties and address issues as they arise.
If they’ve spent the last 25 years with their nose buried in a book — or behind a desk at the U.S. government — they’re probably very smart, but equally impractical when it comes to the real world of how your company operates.
10. ITAR Consultants Can’t Have “Partnerships”
Do they have any partnership agreements with DDTC, BIS or OFAC? If they say “yes,” make sure they aren’t calling you from prison.
ITAR consulting firms are a private business, and ITAR consultants work for your benefit. It’s the job of the government to regulate companies (like yours) when it comes to international trade. You wouldn’t want an ITAR consultant who is playing both sides of the field- you and your entire company could be in great risk if an ITAR consultant says they are partners with the U.S. government.
Any reputable consultant will make a sound like they just drank water down the wrong pipe, and then explain that government agencies do not endorse or partner with anyone.
11. (Bonus) Be Sure To Hash Out All ITAR Consulting Services Before You Sign!
How will you work with me? What will you provide? If you hire the guy who simply “explains the regulations,” be sure to also buy an economy-size box of NoDoz.
There are lots of ITAR consulting services that you may need, and your ITAR consultant will talk with you about your business to help guide you through the various ITAR services and offers:
Instead, look for someone who says something like: “We will identify the vulnerabilities your company has and then work with you to implement solutions that mitigate your risks and help you comply. We’ll be there to help you as much or as little as you need along the way.”
Make Sure You Get The ITAR Consultants To Benefit Your Business!
There you have it. To any competent ITAR consultant, these questions will seem a bit ridiculous. But they’ll help you distinguish the amateurs from the pros.
And when it comes to avoiding costly ITAR and EAR fines or penalties, that can make all the difference in the world.
Don Buehler is founder and president of Export Solutions, Inc., a consultancy firm which specializes in helping companies comply with ITAR and EAR.