In the last article, we reviewed the basics of ITAR compliance. At the end, we noted the high cost of failing to comply. Here, we’ll look at three of the most common ITAR compliance mistakes that can lead to violations and penalties.
Not having an internal compliance program, or having your plan on paper only
If you’re involved in any of the activities covered under the International Traffic in Arms Regulations, compliance is an absolute must.
Export attorney Kay Georgi noted in Military and Aerospace Electronics that the biggest mistake she sees is a lack of an internal compliance program. Companies covered under the rules need to invest in developing an in-house program and training someone internally to handle it.
Of course, your compliance plan needs to be implemented, not just written down. Georgi says of companies whose plan exists only on paper: “Their program is largely ineffective because it does not tie in with actual company procedures or because they don’t have the trained export compliance personnel to help with issues,”
Not doing your due diligence about where your exports are going
Many countries, including Afghanistan, Vietnam, Venezuela, and China are prohibited from ITAR-controlled transactions. See the current country policies and embargoes on the State Department website.
As an exporter, the onus is on you to verify that not only your customer, but your customer’s customer, and so on, are eligible to receive the items you export. Basically, if you export ITAR-controlled goods or information and they end up in the wrong hands, you could be held responsible.
Not keeping complete and accurate records
Finally, documentation and recordkeeping are central to any compliance effort. For ITAR, this documentation includes licenses, purchase orders, and shipping documents for goods, as well as citizenship verification, technology control plans, and nondisclosure agreements for people visiting your facility.
For ITAR, the stakes are high, so it’s worth it to do it right. Kay Georgi notes that this is especially important because when violations arise, ignorance is no excuse. “Even an innocent mistake can be the basis for very substantial civil fines and penalties,” she says.
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