By Tom Reynolds, Export Solutions

What is considered ITAR? Historically, the answer to that question has been very far-reaching and intentionally broad – encompassing a wide array of end items, sub-assemblies, components, materials and services. However, a recent proposed rule by the DDTC (and a concurrent rule from BIS), is proposing to change all that. If made final, this new rule would limit the scope of controlled items and, theoretically, make it easier for companies to answer the question: What is ITAR?

In its current form, the ITAR covers almost everything which has been “specifically designed, developed, configured, adapted, or modified for a military application.” The new rule, which was released June 19 for public comment, proposes to change this general definition by limiting the scope of items which are “specially designed.”

Under this proposal, there would still be certain items which are subject to ITAR or EAR controls, and those items would be clearly spelled out (“enumerated”) on one of the two control lists. However, there would also be other categories of items, still subject to controls, if they are “specially designed” for a particular application. This definition is intended to help companies understand and apply “specially designed” to their products.

The definition contains two paragraphs. Paragraph (a) encompasses broad categories of items, while paragraph (b) carves out (or “releases”) specific items from the controls of “specially designed.” The broad categories which are caught by paragraph (a) include:

  • commodities which, as a result of development, have properties peculiarly responsible for achieving or exceeding the controlled performance levels, characteristics or functions described in a relevant USML paragraph, or
  • parts/components which, as a result of development, are necessary for an enumerated defense article to function as designed, or
  • accessories/attachments which, as a result of development, are used with an enumerated defense article to enhance its usefulness or effectiveness
Paragraph (b) then proceeds to explain what items do not meet this definitions, including:
  • items enumerated in a USML paragraph
  • items commonly used on multiple commodities not enumerated on the USML or CCL (nuts, bolts, washers, screws, etc.)
  • items with the same form/fit/performance of commodities not in development and not on USML
  • items being developed with reasonable expectation for use on USML and CCL
  • items being developed with no reasonable expectation of use for a particular application
The public comment period for this proposal closed August 3, and you can read the feedback which some companies provided here. One thing I’ve noticed about this new proposal, which some other companies have also commented on, is the use of the term “reasonable expectation” found in paragraphs (b)(4) and (b)(5). I think some clarity on this term would be helpful, because it could result in companies being too cautious (thereby defeating the stated goals of reforming the definition), or open the door for other companies to stretch the limits of this term (potentially threatening national security).

Until we can arrive at more positive definitions like this one, ITAR compliance will continue to be a challenge for many companies. So, instead of asking “What is ITAR?” companies might find it more helpful to ask: “What isn’t?”

Your thoughts?

Tom Reynolds is the President of Export Solutions, a consultancy firm which specializes in helping companies with import/export compliance.