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:
- What’s their background? 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.
- Briefly describe your product or service, and then ask them how it would be classified under ITAR or EAR. If they say, “Probably EAR99,” you should hang up the phone. 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.
- 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.
- 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. “We attend government conferences and constantly monitor the new proposals and rules” should make you weep with joy.
- 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. “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 dinner to go with the drink.
- Have they ever helped a company mitigate (or avoid) a fine or penalty through a voluntary disclosure? “No” 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.
- 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. Any longer means they’re scurrying to contact friends, co-workers and long-lost uncles for a reference.
- 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.) They should be able to outline a logical progression which includes things like: policies, procedures, training, tools/resources, organizational structure (and maybe software, too.)
- Have they ever set foot inside a manufacturing plant, engineering center, research lab or any other location where actual ITAR work occurs? 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.
- Do they have any partnership agreements with DDTC, BIS or OFAC? If they say “yes,” make sure they aren’t calling you from prison. 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.
- Bonus: 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. 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.”
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.