How to Become ITAR Compliant

Any Research Laboratory, University, corporation, or any other form of organization within the U.S. dealing with furnishing defense services, manufacturing, or exporting defense items must register with DDTC and comply with ITAR. Unauthorized export of any of the items listed in the USML (United States Munitions List) could result in hefty penalties.

There are over 13,000 universities, research labs, and defense companies handling military and defense technologies. If they are ITAR compliant, they should only share the USML listed items with persons in the U.S. unless otherwise authorized. To Become ITAR compliant, secure data storage and transmission are vital, and Microsoft GCC High plays an important role. So, what is ITAR, and how can you become ITAR compliant? Read on to learn all about International Traffic in Arms Regulations.

What is ITAR?

ITAR refers to a set of regulations instituted and administered by the State Department to control exportation and importation of military and defense-related technologies on the USML. ITAR aims to control the access of the technologies listed in the United States Munitions List and any data associated with them. Therefore, any organization dealing with USML technologies must securely store and transmit its data.

Do You Need to Register With DDTC?

If your organization is involved in the manufacture, sale, or distribution of defense articles or services that fall under any of the 21 categories listed in the United States Munitions List (USML), you are required to register with the International Traffic in Arms Regulations (ITAR). This registration process involves completing DDTC DS-2032: Statement of Registration forms and providing detailed information about your organization, including the types of defense articles or services you deal with, the countries you do business with, and any agreements you have with foreign entities.

Failure to register with ITAR when required can result in significant penalties, including fines and imprisonment. Therefore, it is crucial for any organization involved in the defense industry to determine whether they fall under the USML categories and, if so, to ensure they comply with all ITAR regulations. This includes properly storing and labeling sensitive technical data related to defense articles, implementing appropriate security measures to prevent unauthorized access or disclosure, and obtaining necessary licenses and approvals before engaging in any export or transfer of defense articles or services.

The United States Munitions List (USML) contains 21 categories of defense articles and services that are subject to the regulations of the International Traffic in Arms Regulations (ITAR). Each category is divided into subcategories. Here are the categories and subcategories of defense articles in the USML:

• Firearms, Close Assault Weapons, and Combat Shotguns

• • Firearms
  • Close Assault Weapons
  • Combat Shotguns

• Guns and Armament

• • Guns, through 30mm
  • Guns over 30mm to 75mm
  • Guns over 75mm
  • Howitzers, cannon, mortars, and artillery
  • Recoilless rifles
  • Launchers, rocket and pyrotechnic
  • Miscellaneous guns and armament

• Ammunition and Ordnance

• • Ammunition
  • Fuzes
  • Mines and torpedoes
  • Bombs, grenades, and demolition charges
  • Rockets, missiles, and other explosive devices

• Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes, Bombs, and Mines

• • Spacecraft systems and associated equipment
  • Launch vehicles, guided missiles, ballistic missiles, rockets, torpedoes, bombs, and mines

• Explosives and Energetic Materials, Propellants, Incendiary Agents, and Their Constituents

• • Explosives and related items
  • Energetic materials and propellants
  • Incendiary agents

• Vessels of War and Special Naval Equipment

• • Surface vessels of war and special naval equipment
  • Submersible vessels and related equipment

• Tanks and Military Vehicles

• • Tanks and military vehicles

• Aircraft and Associated Equipment

• • Aircraft and associated equipment

• Military Training Equipment and Training

• • Military training equipment and training

• Protective Personnel Equipment and Shelters

• • Protective personnel equipment and shelters

• Military Electronics

• • Electronics, including fire control, laser targeting, and guidance systems

• Fire Control, Laser, Imaging, and Guidance Equipment

• • Fire control, laser, imaging, and guidance equipment

• Auxiliary Military Equipment

• • Auxiliary military equipment, such as towing equipment and jacks

• Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment

• • Toxicological agents, including chemical agents, biological agents, and associated equipment

• Spacecraft Systems and Associated Equipment

• • Spacecraft systems and associated equipment

• Nuclear Weapons, Design and Testing Related Items

• • Nuclear weapons, design and testing related items

• Classified Articles, Technical Data, and Defense Services Not Otherwise Enumerated

• • Classified articles, technical data, and defense services not otherwise enumerated

• Directed Energy Weapons

• • Directed energy weapons

• Gas Turbine Engines and Associated Equipment

• • Gas turbine engines and associated equipment

• Submersible Vessels and Related Equipment

• • Submersible vessels and related equipment

• Articles, Technical Data, and Defense Services Not Otherwise Enumerated

• • Articles, technical data, and defense services not otherwise enumerated

How Can You Achieve ITAR Compliance?

To date, there is no formal process of certification to be ITAR certified or ITAR compliant. Organizations are expected to understand and comply with the regulations on their own. However, there are three vital steps that prime and subprime contractors can take to become compliant with the regulations and demonstrate their ITAR readiness.

Registration

The first step that any company dealing with military and defense artifacts should take is registering with the DDTC (Directorate of Defense Trade Controls) as per ITAR part 122.

ITAR Compliance Program

Adopting internal written procedures and policies is the next step in learning the ITAR general requirements­. The State Department recommends this for organizations dealing with ITAR controlled activities. If such a company has an ITAR violation, the State Department may reduce the penalties. A compliance program shows that your organization has instituted a formal process of becoming ITAR compliant and projects a complex approach towards solving the problem.

Ensuring Cloud Data Storage and Transmission is ITAR Compliant

After registering with DDTC and undertaking an ITAR Compliance program, the next step is ensuring cloud data security. You must ensure that the technical data isn't distributed or shared with foreign nations and persons. Microsoft has several tools like Microsoft 365 DOD and Microsoft GCC High to ensure that your information is safe on the cloud. These cloud platforms ensure you remain compliant while dealing with sensitive, unclassified, and classified information. Microsoft GCC and GCC High is also vital at meeting CMMC certification.

However, ITAR data is an instance of CUI. Therefore, all the baseline data protections for CUI basic also apply to the International Traffic in Arms Regulations. When you've put the baseline protections in place, CUI-specific requirements are added to the list of controls. If your organization deals with ITAR data and has contracts with DOD, you need to understand DFARS, CMMC 2.0 (mainly level 2), and CUI requirements.

ITAR Visitor Requirements

ITAR visitor requirements are guidelines for controlling access to ITAR-controlled areas or information by foreign nationals. To comply with these regulations, companies must implement visitor management procedures that identify foreign nationals and restrict their access to sensitive information or areas. These procedures should include visitor registration, background checks, and monitoring of visitor activities. To store visitor data, companies can use electronic visitor management systems that store visitor data, such as name, address, and ID, along with their visit details, including arrival and departure times, purpose of visit, and the person they met with. Proper implementation of ITAR visitor requirements and storing visitor data can help companies avoid legal and financial penalties for non-compliance. Here are some additional points to consider:

• ITAR (International Traffic in Arms Regulations) controls the export and import of defense articles and services.
• ITAR visitor requirements are guidelines for controlling access to ITAR-controlled areas or information by foreign nationals.
• To comply with ITAR visitor requirements, companies must implement visitor management procedures that identify foreign nationals and restrict their access to sensitive information or areas.
• Visitor management procedures should include visitor registration, background checks, and monitoring of visitor activities.
• To archive visitor information, companies can use electronic visitor management systems.
• Electronic visitor management systems store visitor data, such as name, address, and ID, along with their visit details, including arrival and departure times, purpose of visit, and the person they met with.
• Proper implementation of ITAR visitor requirements can help companies avoid legal and financial penalties for non-compliance.

What Are the Penalties For Non-Compliance With ITAR?

The State Department imposes heavy penalties for ITAR violations or non-compliance, including criminal fines, civil fines, and up to 10 years in jail per violation or instance. At worse, the United States Government can ban your corporation from future importation or exportation activities.

For instance, FLIR Systems, Inc was fined civil penalties amounting to $30 million by the State Department for transferring USML information to dual nationality employees. The company was also required to hire a third-party official to oversee the agreement and implement better compliance measures. Therefore, ITAR compliance is vital, and you should do anything possible to remain compliant.

How is ITAR Data Secured?

Because of the ITAR violation Penalties, protecting its data with as many security layers as possible makes sense. Since ITAR is a Federal regulation, following their guidelines for data security is a vital step. These guidelines and standards are defined in the NIST SP 800-53. To secure your ITAR data, Discover and classify all the sensitive data, map permissions and data, monitor access control, monitor the data, user behavior, and file activity. You can achieve all this with Microsoft Azure Information Protection.

Here are some best practices for securing technical data in ITAR environments:

• Establish ITAR Compliance Programs: The first step in securing technical data in ITAR environments is to establish an ITAR compliance program. The compliance program should include policies and procedures for handling ITAR data, employee training, and regular audits to ensure compliance.
• Locate and Separate: Find all information related to ITAR and CUI and provide a location for it that separate from normal day-to-day business documents. Always have a "What would the auditor think" mindset when it comes to information storage.
• Limit Access to ITAR Data: Access to ITAR data should be limited to authorized personnel only. The access control policy should be enforced, and unauthorized personnel should be denied access to ITAR data.
• Secure Storage: ITAR data should be stored in secure locations with limited access. The storage location should be secure from unauthorized access, theft, and natural disasters.
• Data Encryption: ITAR data should be encrypted to prevent unauthorized access or data breaches. Encryption helps protect data from theft or cyber-attacks.
• Document Labeling: Documents containing ITAR data should be clearly labeled to indicate the level of sensitivity. Clear labeling helps ensure that personnel understand the level of sensitivity of the data and take the necessary precautions.
• Data Transmission: ITAR data should be transmitted only through secure channels. All data transmissions should be encrypted and authenticated.
• Secure Disposal: ITAR data should be disposed of securely when it is no longer needed. The data should be shredded or destroyed to ensure that it cannot be recovered.
• Regular Audits: Regular audits should be conducted to ensure compliance with ITAR regulations. Audits should include reviews of ITAR data handling procedures, access controls, and storage policies.
• Employee Training: Employee training is critical to ensuring ITAR compliance. Employees should be trained on ITAR regulations, the importance of ITAR compliance, and best practices for securing technical data in ITAR environments.

If you deal with any artifact on the USML, you should check whether you are ITAR compliant. Since ITAR is a part of CUI, it seems reasonable to ensure you are CMMC compliant first. These include migrating to Microsoft GCC High for on-cloud data storage and transmission. There are many repercussions of dealing with Military and defense artifacts listed in the United States Munitions List without ITAR compliance. To learn more about Microsoft GCC High and ITAR Compliance, contact Cleared Systems today.