Many people focus on the need to obtain an ITAR license, without first considering whether or not an exemption may apply to their transaction. What is an exemption? Simply put, an exemption is a set of conditions which – if met – allow you to ship to your destination without the need to obtain an export license.
The government allows the use of exemptions because they have evaluated specific exports and feel confident that – as long as the conditions of the exemption apply – these items can be safely exported without harm to U.S. national security.
What kinds of exemptions are available under the ITAR?
There are many! Some examples include: exemptions for temporary imports and exports, technical data exemptions, retransfers, U.S. Government and Foreign Military Sales (FMS) exemptions. In addition, there are also exemptions for certain countries, including: Canada (§126.5), Australia (§126.16), the U.K. (§126.17), and a variety of exemptions/authorizations for NATO and other allied countries (most notably in §123.9).
Where are these exemptions located?
Unfortunately, there is no single section or “chapter” of the ITAR which contains all of the exemptions in one place. Instead, you will find these exemptions throughout the ITAR – particularly in sections 123, 125 and 126.
What else do I need to know about ITAR exemptions?
Here are a few additional helpful tips about using ITAR exemptions:
- Remember that by claiming an exemption, you are self-certifying that your transaction meets all the criteria defined in the ITAR and is eligible to ship without a license. This means you must read the exemption carefully, and make sure that all of the conditions apply! Never assume! When in doubt, seek professional help or apply for a license.
- Your company’s use of exemptions must be reported annually to DDTC.
- Don’t forget to document the exemption you used on your shipping paperwork and bill of lading.
- Keep good records! We recommend maintaining an exemption/exception log, which is an easy reference to show all of your shipments. Some useful information to capture on this log includes: Date of Shipment, Exemption/Exception Claimed, Jurisdiction (ITAR or EAR), USML/ECCN, Description, End User, Country, Type of Export (e.g., hardware, technical data, etc.), Value, and Export Method (e.g., email, shipment, hand-carry, face-to-face meeting, etc.)
As you can see, using an ITAR exemption is more complicated than simply putting “NLR (No License Required)” on your shipping documents. However, in some circumstances, these exemptions can save your company valuable time and money compared to applying for a license.
For more information, get in touch with your company’s Empowered Official or feel free to contact us for help!
Tom Reynolds is the Vice President of Operations for Export Solutions, a consultancy firm which specializes in ITAR and EAR compliance.