|
By Kathryn Toomey email
| bio
In
a previous article, I explored and discussed what the International
Traffic In Arms Regulations (ITAR) are, why they exist and what
items (by category) they control. In case you may not have read
my previous article, the Arms Export Control Act (AECA), 22 U.S.
2778, authorizes the President to designate items that shall be
considered as defense articles and services. These items constitute
the United States Munitions List (USML).
The ITAR implements the AECA and is managed by the Directorate
of Defense Trade Controls (DDTC) under the Department of State.
The ITAR covers all military articles, services and technologies.
The ITAR can be found under 22 C.F.R. Chapter I, Subchapter M, Part
120-130.
In simplest terms, the USML is a list of defense articles and services
that are specifically designed, developed, configured, adapted or
modified for a military application and do not have a predominant
civil application or civil performance equivalent, have significant
military or intelligence applicability, and are determined or may
be determined as a defense article or defense service. The USML
list can be found in 22 C.F.R. Chapter I, Subchapter M, Part 121.
Whew, that’s a mouthful, I know. Did you get that? Could
you determine what a USML item is now? At a 50,000-foot view, most
people without a background in the ITAR could probably identify
very obvious military items and services. Once they get past the
obvious, it is generally a guessing game.
Coincidentally, even many seasoned ITAR professionals get tripped
up on classifying ITAR items and services for a variety of reasons
such as using old or previous specification data, changing technology
and components, functionality and even failing to perform adequate
due diligence and research. Interpreting the USML under the ITAR
should never be taken lightly or considered a one-time activity
when classifying your items and services.
Before we move on, if you are not familiar with how the Code of
Federal Regulations (CFR) and the Federal Register (FR) work, now
would be a good time to review the structure, naming convention,
and organization of both the CFR and FR. It will make your life
easier in finding ITAR and USML regulations, and you’ll save
an enormous amount of time when you need to research the CFR.
So why all the hoopla about USML? For starters, remember that the
United States’ goal of regulating these items is to protect
U.S. national security so that the most sensitive information and
technology do not get into the wrong hands. This includes prohibiting
U.S. individuals and companies from engaging in business with prohibited/sanctioned
countries and persons for various economic, financial, anti-terrorism
and human rights issues.
Uh, ok, so tell me again why all the hoopla?
What’s so hard about the USML list? Here we go. The USML
is divided into 16 sections with seven sections reserved for future
use; one section addressing the general USML list, and the remaining
sections further describing and adding to the USML. To make it easy,
here is the outline just of the USML:
- Part 121.1 – General United States Munitions List
- Part 121.2 – Interpretations of the U.S. Munitions List
and the Missile Technology Control Regime Annex
- Part 121.3 – Aircraft and related articles
- Part 121.4 – Reserved
- Part 121.5 – Apparatus and devices under Category IV(c)
- Part 121.6 – Reserved
- Part 121.7 – Reserved
- Part 121.8 – End-items, components, accessories, attachments,
parts, firmware, software and systems
- Part 121.9 – Reserved
- Part 121.10 – Forgings, castings and machined bodies
- Part 121.11 – Military demolition blocks and blasting
caps
- Part 121.12 – Reserved
- Part 121.13 – Reserved
- Part 121.14 – Reserved
- Part 121.15 – Vessels of war and special naval equipment
- Part 121.16 – Missile Technology Control Regime Annex
Within each of the USML parts, there are subcategories further
defining the items and services controlled. For example, Part 121.1,
General USML, covers a wide variety of items from guns, explosives,
launch vehicles, military training equipment, spacecraft, nuclear,
directed energy submersible vessels and miscellaneous articles.
These are just the items covered under Part 121.1. Part 121.16 also
has a large subcategory list.
Additionally, most parts and categories also have a “catch
all” paragraph that covers items not specifically enumerated
or stated, yet meet USML criteria. I like to call this the “government
loophole” clause, which is really for the government’s
benefit, not yours. In other words, that’s their ace in the
hole if they want to make something stick against you if the classification
is subjective, complex or doesn’t fit nicely into another
area within the USML.
If you manufacture, sell, distribute or export ITAR controlled
articles and services, more than likely you will come up against
this issue and will have to make a decision to either self classify
and assume the risks or submit for a commodity jurisdiction (CJ)
from the DDTC at the Department of State (DOS). Many companies do
not like the latter choice. However, if you are unwilling to accept
the risk and all the glorious fines, penalties and potential imprisonment
that DOS/DDTC could impose upon you, then it would be most beneficial
to have DDTC rule on your CJ.
Are you still with me? Feeling uneasy about the USML? No need to
feel uneasy if you are performing reasonable care and due diligence,
checking the CFR and FR for updates, documenting your logic and
rationale, and making sure you’ve covered all the bases when
classifying your ITAR articles and services. If you don’t
know if you are covering all the bases, I would suggest you get
a compliance health check and get it fast. One violation could cause
your company to lose its export and import privileges, cause hefty
fines and penalties to be levied against you and your company, and
potentially risk imprisonment for CEOs, EOs and employees. This
is not a scare tactic but rather a reality check of playing in DDTC’s
ITAR sandbox.
Back to the USML. As I’ve mentioned in previous articles,
it’s impossible to become an expert on the ITAR and USML from
simply reading an article. Instead, I hope it encourages you to
obtain several copies of the ITAR and share them with your engineers,
technicians and, most importantly, your compliance officials and
staff. Review your products and services against the USML and determine
classification or submit for a CJ. Stay abreast of changes and regularly
check the CFR and FR. Document your process and findings. Share
information within your company team as appropriate. Make ITAR/USML
compliance a team function by enlisting employees to be a part of
the solution. Make sound decisions based on facts and not hope or
circumvention. If you need assistance navigating the ITAR, seek
qualified experts to help you.
Copies of the ITAR can be obtained from a variety of sources. However,
I like to use the Society for International Affairs’ (SIA)
version and then cross check against any changes online. For a copy
of the SIA’s version, visit http://www.siaed.org/
for details. While a copy of the ITAR/USML can be viewed online
for free, it’s very easy to lose your place or miss something,
and therefore, it never hurts to have a physical copy handy.
Stay tuned to our series of ITAR articles here at IBT, and in the
meantime, let me know if
you have any questions.
Top of Page
If your company has any customers in Canada or Mexico, or
if you have domestic customers that ship to one of those two
countries, you've probably been asked for a NAFTA Certificate
of Origin. And depending on how much money these Canadian
or Mexican customers can save in duties under NAFTA, the requests
may be frequent and strongly worded.
Keep in mind, however, that not all products qualify for
NAFTA. That includes goods that are manufactured or produced
in Canada, Mexico or the United States. Before you can determine
whether or not your products qualify for reduced duties under
NAFTA, you must understand the NAFTA Rules of Origin, you
must know and document the origin of each of the components
of your products, and you must know and document where your
products were finished.
Don't think this is important? If you provide someone with
a NAFTA Certificate of Origin and you can't provide documentation
that your goods qualify, your company—and the person
who signed the NAFTA Certificate—are at the mercy of
U.S. Customs and Border Protection, which can penalize you
thousands of dollars per violation.
You and your company can't take chances with your NAFTA program.
That's why International Business Training (IBT) is offering
a series of lunch-time webinars that let you participate from
your desktop computer in live, two-hour presentations on the
fundamental elements of NAFTA that are important to successfully
managing the program:
Each two-hour session is held twice a day so both east coast
and west coast attendees can participate over their lunch
hours. Of course, if you've already got lunch plans, we don't
mind if you register for the other session that day.
Each two-hour webinar is only $150 per person, and you'll
receive a copy of the instructor's PowerPoint presentation
prior to the webinar so you can take notes, and we'll mail
you a Certificate of Completion at the end of each webinar.
Seats for each webinar are definitely limited, so don't delay.
You can register online or by calling IBT at 1-800-641-0920.
You'll be glad you did!
By Richard Vitas Palaikis II email
| bio
The beginning of a new year almost always means amended or
brand new regulations that govern the import and export of
merchandise to and from the United States. In this particular
instance the regulations of another nation will affect anyone
who exports goods to China. These individuals should make
sure that they are compliant with new regulations set forth
by the Chinese General Administration of Customs that change
the rules for electronically transmitting manifest data.
On January 1, 2009, the Chinese General Administration of
Customs implemented steps that standardize the administration
of manifest data for inbound, as well as outbound shipments
of goods for all modes of transportation. These new changes
also enable the Chinese General Administration of Customs
to safeguard legitimate international trade activities among
its trading partners.
How does the implementation of this new procedure affect
U.S. exporters as they attempt to export goods to China?
Those individuals who are exporting goods to China and those
who are responsible for transmitting electronic manifest data
must first register with the Chinese General Administration
of Customs by submitting the following documents:
-
Application form for registration,
-
Bill of lading/waybill samples,
-
Impression of the corporate seal of the
business or other equivalent business stamp,
-
Copy of license or certificate of qualification
issued by governmental authorities, and
-
Any other document as requested by the General
Administration of Customs.
Once interested parties have registered with the Chinese
General Administration of Customs and have gained admittance
to their electronic manifest data transmission program, those
individuals who are responsible for transmitting manifest
data must adhere to the minimum time requirements as specified
below. These new requirements could be viewed as the Chinese
version of the 24 Hour Rule imposed by U.S. Customs and Border
Protection for inbound shipments of merchandise.
The deadline for submitting documents before loading goods
onto a conveyance bound for China depends on the mode of transport:
-
Ship, containerized—24 hours,
-
Ship, non-containerized—2 hours,
-
-
-
For passengers aboard an inbound transport to China, the
deadline for submitting documents is different:
-
-
Plane, flight time less an 1 hour—30
minutes,
-
Plane, flight time of 1-2 hours—1
hour,
-
Plane, flight time over 2 hours—2
hours,
-
-
Any amendments that would need to be made to the manifest
data should be made before the deadlines indicated above.
Adhering to these time frames greatly enhance the entry process
once the goods reach China.
Chinese Customs officials will be granting a temporary three
month grace period in which monetary penalties will not be
assessed for noncompliance. The only penalty at this point
would be the inability for the goods to be offloaded from
the conveyance upon which the goods arrived.
More information pertaining to the requirement may be obtained
from the Chinese
Customs website; however, information pertaining to this
particular regulation is only available in the Chinese language.
There are currently no English language translations available.
The USDA
Foreign Agricultural Service has some information about
the new Chinese regulations available as they pertain to agricultural
commodities, and they include core aspects of the electronic
manifest data transmission program, which may be useful to
all exporters regardless of their commodities.
Thousands of successful exporters are using Shipping Solutions
to complete their export documents faster, easier and less expensively
than ever before. Why aren't you?
If you're too busy trying to complete your export documents by
hand to spend some time reviewing the Shipping Solutions Professional
export documentation and compliance software yourself, let us do
it for you! Sign
up for one of our free online demos and let us give you a one-hour
overview of the software.
We'll take you step-by-step through the process of completing your
export forms, filing your SEDs electronically through AES, and checking
your exports against the various government restricted parties lists
and export regulations to make sure your shipments are in compliance,
and you—and your company—stay out of trouble.
These free online demos are available on Tuesdays at 1:00 p.m.
and Thursdays at 10:00 a.m. Central Time. All you need is an Internet
connection to watch the demo and a phone to listen in and ask questions
about the software. It's the perfect opportunity to get your first
view of Shipping Solutions or to convince your co-workers and your
boss that Shipping Solutions is the perfect solution for your company.
See why Shipping Solutions is America's #1 export software. Sign
up for the free online demo today!
Top of Page
|
