Jennifer Schaus & Associates GOV CON WEBINAR SERIES - 2017
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Join Us for A Series of Complimentary Webinars on various US Federal Government Contracting Topics. Presenters are industry experts sharing knowledge about the competitive government contracting sector. Find all of our Govt Contracting webinars (free download) at www.JenniferSchaus.com
Contact Us @ 2 0 2 – 3 6 5 – 0 5 9 8
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
ABOUT JENNIFER SCHAUS & ASSOCIATES: -
Based in downtown Washington, DC; A la carte services for Federal Contractors;
- Proposal Writing to GSA Schedules and Contract Administration, etc.; Deep bench of industry experts; -
Educational webinars;
Networking events and seminars;
WEBSITE: http://www.JenniferSchaus.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
ABOUT JENNIFER SCHAUS: -
Over 20 years in federal contracting; -
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Began career with D&B; Industry speaker and author;
Board Member: GovLish; NCMA; and NMIA.
Volunteer Mentor &/or Instructor: VA PTAP; CBP / VBOC; Capitol Post; 1776; Eastern Foundry, WIT; WDCEP and the Towson University Incubator.
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
ABOUT OUR SPEAKER: THOMAS B. McVEY
www.JenniferSchaus.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
ABOUT THOMAS B. McVEY: - Over 30 Years in International Law; - Georgetown University; Columbia University; - Chair, International Practice Group, Williams Mullen; - 1666 K Street, N.W., Washington, DC 20006 - tmcvey@williamsmullen.com; (202) 293-8118.
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
ITAR FOR GOVERNMENT CONTRACTORS – WHAT YOU NEED TO KNOW TO RUN YOUR BUSINESS Wednesday, September 20, 2017
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
DFARS §225.79 and 252.225-7048 • Government contractors required to comply with ITAR/EAR • Must “flow down” this requirement to subcontractors • Covers ITAR registration, licensing of defense articles, defense services, technical data and other requirements • Important for second– and third-tier suppliers
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
International Traffic In Arms Regulations (ITAR) • Enabling statute: Arms Export Control Act • Regulations - International Traffic In Arms Regulations (“ITAR”) (22 C.F.R. Chapter 1, Subchapter M, parts 120-130) • Department of State – Directorate of Defense Trade Controls • List of Controlled Products - U.S. Munitions List • Controls Military Items – Broad scope encompassing many items originally developed for military use
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Defense Articles - U.S. Munitions List (USML) • Category 1: Firearms, weapons • Category 2: Guns and armaments • Category 3: Ammunition, ordinance
• Category 13: Materials and miscellaneous articles (cameras, encryption, camouflage, other)
• Category 4: Launch vehicles, missiles, rockets
• Category 14: Toxicological, chemical, biological agents, associated equipment
• Category 5: Explosives, incendiary agents
• Category 15: Spacecraft and related articles
• Category 6: Naval vessels
• Category 16: Nuclear weapons, technology
• Category 7: Military vehicles • Category 8: Aircraft and equipment
• Category 17: Classified articles, technical data and services
• Category 9: Military training services, equipment
• Category 18: Directed energy weapons
• Category 10: Personal protective equipment
• Category 19: Gas turbine engines/ equipment
• Category 11: Military electronics
• Category 20: Submersible vessels
• Category 12: Optical and guidance control equipment
• Category 21: Articles not otherwise enumerated
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
ITAR Also Controls Technical Data and Software Technical Data: Information which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles, and other items. ( see 22 CFR §120.10)
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
Technical Data and Software (Cont’d)
Blueprints
Training Manuals
Models
Data
www.JenniferSchaus.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Methods For Exporting Technical Data and Software • Send or take it abroad (e.g., send disk in the mail) • Go abroad and talk about it • Electronic transmissions, e-mail, phone call, fax to foreign party • Take it in your laptop or iPhone in an overseas trip • Foreign national comes to U.S. and has access to it
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Defense Services • Furnishing of assistance to foreign persons related to Defense Articles; examples: – – – – – –
Consulting Engineering Technical Services Military training Other services Furnishing technical data
• Requires Technical Assistance Agreement (TAA)
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Examples of USML Items • Command, control and communications systems • Certain drone aircraft • Navigation systems for military vessels • Certain electronic equipment used in military applications • Military training services and equipment • Underwater sound equipment • Flight control products, software and technologies • Developmental equipment funded by DOD
• Certain satellites and ground control equipment, including parts, technologies and software • Anti-gravity and pressure suits, atmosphere diving suits • Body armor (certain types) • Naval vessels and related equipment, parts and software • Protective personnel equipment • Certain ground sensor systems • Antennas for military systems • Military radar systems and equipment • Certain optical equipment
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
Items
on USML ― Parts and Components
• Many parts, components, accessories, attachments, equipment and software specially designed for a USML item are also on USML • Certain parts and components have been transferred to the Commerce Control List under the Export Administration Regulations pursuant to Export Control Reform • Major issue for second- and third-tier suppliers and subcontractors
www.JenniferSchaus.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Services on the USML • Intelligence and security services often covered under ITAR • Military advice to foreign persons is covered under ITAR (§120.9) • Military training for foreign persons (§120.9) • Training in use of USML items (subject to certain exemptions)
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Government Sponsored Research Funding • SBIR, DOD university research funding and other defense research funding • Resulting products, technical data, software and services are often on U.S. Munitions List • Many “developmental products” funded by Department of Defense are on the USML
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Requirements If Item Is On USML • Physical articles: – Cannot export unless obtain export license (e.g. DSP-5)
• Technical Data and Software: – Cannot send or take out of U.S. without export license – Cannot transfer to foreign party in U.S. without export license
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Requirements If Item Is On USML (cont.) • Services: – Cannot perform defense services for foreign persons overseas or in the United States without license (TAA)
• Imports: – Items on USML and U.S. Munitions Import List subject to import restrictions
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Registration • Parties that manufacture or export items on the USML or perform defense services are required to register with DDTC • This is even if the company does not export any products
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Data Security Requirements for ITARControlled Technical Data • DFARS 252.204-7012 – establishes data security requirements for “Covered Defense Information,” including “export control” information • Security standard: NIST SP 800-171 • December 31, 2017 • Cyber incident reporting requirement • Mandatory “flow down” to subcontractors
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Other ITAR Requirements • Registration (22 C.F.R. Part 122) • Broker Regulation (22 C.F.R. Part 129) • Temporary Imports (22 C.F.R. Part 123) • Reporting For Payment of Commissions, Fees and Political Contributions (22 C.F.R. Part 130) • Recordkeeping (22 C.F.R. § 122.5) • Debarred Party Screening
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Companies Most Likely Subject To ITAR Regulation • Defense industry firms • Government contractors • Aerospace, avionics • Electronics • Maritime • Navigation • Unmanned aerial vehicles (UAV) • Satellite • Communications • High performance materials • Government sponsored research • Manufacturers of parts, components, software for above
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Penalties for Violations • • • • •
Criminal Sanctions – up to 20 years imprisonment Fines: Up to $1,000,000 per violation Press release Debarment For criminal cases Justice Department can prosecute: – Company – Officers and Directors – Employees in their individual capacities
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Recent Export Compliance Cases • Timothy Gormley; 42 months imprisonment; export of microwave amplifiers without license • LeAnne Lemeister (empowered official and export compliance officer), DDTC Administrative Debarment; 21 violations regarding improper use of export control documents • Meggitt-USA, Inc; $25,000,000 civil penalties; various ITAR violations • Aeroflex Inc; $8,000,000 civil penalties; various ITAR violations • Raytheon Company; $8,000,000 civil penalties; various ITAR violations • Peter Gromacki; 3 months imprisonment; export of high-grade carbon fiber to China • Ming Suan Zhang, 57 months imprisonment; high-grade carbon fiber to China
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Compliance Strategy • Classification – review your company’s products and services to see if they are listed on: – U.S. Munitions List – Commerce Control List – End Use Based Controls (15 CFR Part 744)
• Application – Apply as required for: – – – – –
DDTC export licenses (DSP-5, etc.) BIS export licenses TAA’s, MLA’s Warehouse Distribution Agreements Re-export authority
• Compliance Program – internal company compliance procedures
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
ITAR Compliance Program • Designated company official in charge of compliance • Classification of company’s products, software, technical data and services • Written policies and procedures for dealing with ITAR and EAR issues • Procedure for foreign nationals • Training • Recordkeeping • Prohibited list checking and OFAC sanctions review • Procedure for dealing with suspected violations • Auditing • Updating program
Jennifer Schaus & Associates – GOV CON WEBINAR SERIES - 2017 - WASHINGTON DC
www.JenniferSchaus.com
Export Administration Regulations • Enabling Statute: Export Administration Act (expired), International Emergency Economic Powers Act • Regulations: Export Administration Regulations (EAR) • Department of Commerce – Bureau of Industry and Security • List of Controlled Products – Commerce Control List • Controls “Dual-Use” Items and 600 Series Military Items
Jennifer Schaus & Associates
GOV CON WEBINAR SERIES - 2017
QUESTIONS? CONTACT OUR SPEAKER THOMAS McVEY AT (202) 293-8118 AND AT tmcvey@williamsmullen.com
THANK YOU FOR ATTENDING!!
WWW.JENNIFERSCHAUS.COM