An 8(a) certified and SDB company

2011

An 8(a) certified and SDB company

Export Control Training 2012

Presentation Outline

• Purpose• What is Export Control?• Export Control Overview• United States Munitions List (USML)• Commerce Control List (CCL)• Apogee Export Control Policies• Apogee Export Control Standard Operating Procedures (SOP)• Investigations• ITAR Violations• ITAR Penalties• Summary

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Purpose

• The purpose of this briefing is to present an informational overview of Export Control as it affects Apogee and its employees

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What is an Export?

• Sending, taking, shipping, transferring or transmitting technology, software, commodities or defense articles (including technical data) out of the United States. Source(s): CFR § 734.2(b)(1), (9)(i)(A); ITAR § 120.17(a)(1);

• Releasing technology or software in a foreign country. Source(s): CFR § 734.2(b);

• Releasing technology or source code software (other than encryption source code software) to a foreign national in the United States, other than a foreign national who qualifies as a U.S. person. Source(s): CFR § 734.2(b)(2)(ii);

• Note: Technology or source code software is released for export through: (1) Visual inspection by foreign nationals of U.S.-origin equipment and facilities, (2) Oral exchanges of information, or (3) The application to situations abroad of personal knowledge or technical experience acquired in the United States. Source(s): CFR § 734.2(b)(3).

• Disclosing technical data covered by the U.S. Munitions List to a foreign person. Source(s): CFR § 120.17(a)(4).

It makes no difference whether the technical data is disclosed orally, visually, or in some other manner.

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Export Control Overview

International TrafficIn Arms Regulation

(ITAR)CFR 22, Parts 120-130

Export AdministrationRegulation (EAR)

CFR 15, Parts 730-774

US Munitions ListI FirearmsII Guns and ArmamentIII…

Commerce Control List0 Nuclear Materials…1 Materials, Chemicals…3…

Arms Export ControlAct (AECA)Public Law

90-629

Export AdministrationAct (EAA)Public Law

96-72

Defense Articles and Services Dual Use Commercial Items

International TrafficIn Arms Regulation

(ITAR)CFR 22, Parts 120-130

Export AdministrationRegulation (EAR)

CFR 15, Parts 730-774

US Munitions ListI FirearmsII Guns and ArmamentIII…

Commerce Control List0 Nuclear Materials…1 Materials, Chemicals…3…

Arms Export ControlAct (AECA)Public Law

90-629

Export AdministrationAct (EAA)Public Law

96-72

Defense Articles and Services Dual Use Commercial Items

Department of State (DOS)Directorate of Defense Trade Control (DDTC)

Department of Commerce (DOC)Bureau of Industry and Security (BIS)

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Category Description

I Firearms, Close Assault Weapons and Combat Shotguns

II Guns and Armament

III Ammunition/Ordinance

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

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

VI Vessels of War and Special Naval Equipment

VII Tanks and Military Vehicles

VIII Aircraft and Associated Equipment

IX Military Training Equipment and Training

X Protective Personnel Equipment and Shelters

XI Military Electronics

XII Fire Control, Range Finder, Optical and Guidance and Control Equipment

XIII Auxiliary Military Equipment

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

XV Spacecraft Systems and Associated Equipment

XVI Nuclear Weapons, Design and Testing Related Items

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

XVIII Directed Energy Weapons

XIX [Reserved]

XX Submersible Vessels, Oceanographic and Associated Equipment

XXI Miscellaneous Articles

USML (1 of 2)

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USML (2 of 2)

• At present, the categories specific to Apogee are:– Category IV – Launch Vehicles, Guided Missiles, Ballistic

Missiles, Rockets, Torpedoes, Bombs, and Mines– Category IX – Military Training Equipment and Training– Category XI – Military Electronics– Category XV – Spacecraft Systems and Associated Equipment– Category XVII – Classified Articles, Technical Data and

Defense Services Not Otherwise Enumerated– Category XVIII – Directed Energy Weapons

• Why is this important to you? – Because Apogee is ITAR registered with the DOS/DDTC

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Apogee Export Control Policies (1 of 3)

• Apogee has appointed an Export Control Officer (ECO) to manage and oversee company Export Control Policy (ECP). Apogee’s ECO is an “empowered official” per ITAR Paragraph 120.25. This means the following:

• a) A full-time employee of the Company.• b) Signs license applications or other requests for approval on behalf

of the Company.• c) Understands the provisions and requirements of the various export

control statutes and regulations, and the criminal liability, civil liability and administrative penalties for violating the AECA and the ITAR

(as well as the EAR).• d) To meet regulatory requirements, Apogee shall:

• (i) inquire into any aspect of a proposed export or temporary import by the Company, and

• (ii) verify the legality of the transaction and the accuracy of the information to be submitted; and

• (iii) refuse to sign any license application or other request for approval without prejudice or other adverse recourse.

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Registration with Department of State• Apogee supports contracts where defense services articles,

technical data, and training are exported to foreign governments and associated parties (such as foreign government contractors).

• The company is registered and will remain registered with DOS DDTC (ITAR Part 122). The ECO will maintain this registration and update it upon changes to Apogee structure.

• Apogee’s current registration with Department of State runs through January 31, 2013.

• At present Apogee will maintain its registration with the DDTC as an exporter only. Should the need arise to support the import of products and services to foreign governments and supporting entities, the ECO will update the registration to include the necessary status.

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• Type of Exports– Technical Assistance Agreements (TAA)– Manufacturing License Agreements (MLA)

Exemptions/Exceptions, Licenses, – Foreign Military Sales (FMS)

Apogee has Active TAAs with Canada DND, United Kingdom MoD, and Netherlands MoD in support of

USAF AEHF Program

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Apogee Export Control SOPs (1 of 4)

• Foreign Interaction Logs– Applicable to All Apogee Employees

• Foreign Travel Logs• Applicable to All Apogee Employees

• Product Delivery– Usually delivered via U.S. Govt channels

• Delivery Logs• Investigations and Audits• Information Technology

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• Interaction Log Example

Employee Name(s)

Program Supported

Interaction Date(s)

Government Personnel Attending (if any)

Interaction Type/ Subject(s)

Name(s)/Nationality(ies) of Foreign Parties

Brad Rhodes

A4A6-00XX (IP AEHF Tng)

06 June 2007 None Telephone-AEHF information clarification

Jim Newberry/Canada

Brad Rhodes


20-25 August 2007

Multiple (see attached attendance roster)

Meeting-IPAWG Multiple (see attached attendance roster)

Apogee personnel supporting NORTHCOM are exempted from this requirement for daily interactions by the NORAD Terms of Reference document dated 21 February 2007.

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• Delivery Log ExampleEmployee Name(s)

Program Supported

Delivery Date(s)

Service, Technical Data Title/Subject

Cleared by 1) Apogee ECO 2) FDO (Y/N)(must be cleared or DO NOT release)

Document Released to:A) Foreign Party orB) US Government for Foreign Party /method of transfer

Name(s)/ Nationality(ies) of Foreign Parties or Name(s) of US Government Personnel Receiving Documents

Brad Rhodes


06 June 2007

Pages 6-8 of the AEHF IP CONSUP/ Enabling Concept Document for IPs

1)Y2) Y

Foreign Party/via fax

Jim Newberry/Canada

Brad Rhodes


25 August 2007

AEHF CNIP/ Enabling Concept Document for IPs

1) Y2) Y

US Government for Foreign Party/via email

John Q. Public (QAE) for transfer to Canada, the Netherlands, and the United Kingdom

Apogee personnel supporting NORTHCOM or AEHF must track documents delivered directly to foreign personnel; preference is

government to government transfer 13


• Foreign Travel Tracking Example

Employee Name(s)

Program Supported

Country Traveled To

Dates of Travel

Nature of Travel (Leisure, Business, or Other (describe)

Interactions of Concern (Could Related to FISS Activities); Completed After Trip

Brad Rhodes A4A6-00XX (IP AEHF Tng)

Japan 02-18 Feb 07

Other (National Guard AT)

None

Randy Dillow MPSS-00XX (Test)

Germany 01-15 Aug 07

Business (RSSC-EUROPE training)

Approached by unknown person at restaurant after work regarding job in Germany.

All Apogee personnel must provide the ECO with foreign travel dates and interaction regardless of the nature of travel

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Investigations

• It is Apogee SOP to cooperate fully in any and all investigations by the Defense Investigative Service (DIS) (ITAR violations) or Office of Export Enforcement (OEE) (EAR violations). If an employee is contacted by the DIS or OEE related to the investigation of an export control violation, it is Apogee SOP to immediately contact the ECO.

• Periodically, the Apogee ECO will conduct informal audits of employee Interaction Logs (IL) and Delivery Logs (DL) to ensure they are in good standing. If ILs or DLs are not being maintained appropriately, the ECO will work with the employee to correct the deficiencies.

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ITAR Violations

Per the ITAR, it is unlawful:(1) To export or attempt to export from the United States any defense

article or technical data or to furnish any defense service for which a license or written approval is required by this subchapter without first obtaining the required license or written approval from the Office of Defense Trade Controls;

(2) To import or attempt to import any defense article whenever a license is required by this subchapter without first obtaining the required license or written approval from the Office of Defense Trade Controls;

(3) To conspire to export, import, re-export or cause to be exported, imported or re-exported, any defense article or to furnish any defense service for which a license or written approval is required by this subchapter without first obtaining the required license or written approval from the Office of Defense Trade Controls; or

(4) To violate any of the terms or conditions of licenses or approvals granted pursuant to this subchapter.

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ITAR Penalties

• Administrative debarment from participating directly or indirectly in the export of defense articles, including technical data or in the furnishing of defense services for which a license or approval is required.

• Civil penalties not exceed $500,000 for each violation involving controls imposed on the export of defense articles and defense services.

• Criminal penalties not to exceed $1,000,000 for each violation, imprisonment not more than 10 years, or both for transactions with countries supporting acts of international terrorism under Sec. 2780.

Apogee has policy for addressing violations and would work through each situation on an individual basis –

our goal is to help protect you!

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Summary

• Apogee is registered with the DoS/DDTC to support compliance with the ITAR

• Apogee has active TAAs• Apogee maintains policies and procedures to

support compliance with the ITAR and EAR– SOPs are generally common sense

• Violations, whether inadvertent or intentional, are Apogee’s responsibilities

• The ECO is here to help with any/all questions!

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Export Control Officer (ECO) Contact Info.

• QUESTIONS?

• Contact Your Apogee ECO:– Dave Hutchison– Email: [email protected]– Cell: (303) 880-5851

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Backup Slides

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DOS and DDTC

• The ITAR is administered on behalf of the President by the DOS Directorate of Defense Trade Controls (DDTC)

• Why is the DDTC in the DOS? – The DOS is the executive department responsible for execution

of US foreign policy.

• The DOS does not approve defense exports in a vacuum. In fact, the DOS coordinates any/all exports with direct defense impact with the DoD, the appropriate services (Army, Air Force, and Navy), and agencies (for example the Defense Information Systems Agency (DISA)) that may be affected.

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ITAR (1 of 2)

• ITAR (22 Code of Federal Regulations (CFR), Parts 120-130)

• The ITAR tracks countries under embargo and the USML• The ITAR applies to both imports and exports

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ITAR (2 of 2)

• It is the policy of the United States to deny licenses and other approvals for exports and imports of defense articles and defense services, destined for or originating in certain countries. This policy applies to Belarus, Cuba, Iran, Libya, North Korea, Syria and Vietnam. This policy also applies to countries with respect to which the United States maintains an arms embargo (e.g., Burma, China, Haiti, Liberia, Somalia, and Sudan) or whenever an export would not otherwise be in furtherance of world peace and the security and foreign policy of the United States

• Applicable to United Nations (UN) embargoes• Applicable to countries identified as supporting terrorism

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DOC and BIS

• The EAR is administered on behalf of the President by the DOC Bureau of Industry and Security (BIS).

• The BIS is concerned with those dual use commerce items that may seem on the surface to have little defense value. However, when placed in the wrong hands, use of such items could have potentially deadly consequences.

• Additionally, the BIS looks at other factors when considering export control such as the crime rate in a given country. Similar to the DDTC, the BIS coordinates with the DoD, the appropriate services, and agencies as required. In general, the EAR applies to the export of items by US commercial entities to foreign commercial entities.

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EAR (1 of 3)

• EAR (15 CFR, Parts 730-774) • The EAR tracks countries under embargo and the CCL

(export list)• The EAR is primarily export focused

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EAR (2 of 3) – Country ChartAfghanistan (Embargoed) Denies licenses, other approvals, exports and defense services, defense articles.

Balkans (Sanctioned) • Prohibition on engaging in transactions with designated persons who threaten international stabilization efforts in the Balkans (OFAC).

Belarus (Embargoed) Denies licenses, other approvals, exports and defense services, defense articles.

Burma (Sanctioned/Embargoed) • Prohibition on engaging in transactions with designated nationals of Burma; • Prohibition on engaging in exporting financial services and importing Burmese products

(OFAC)

China (Embargoed) Arms Embargoed Country An export license is required for commercial goods, services, or technology intended for China for

reasons of: chemical and biological weapons proliferation, nuclear proliferation, national security, missile technology, regional stability, and crime control.

Cote d’Ivoire (Ivory Coast) (Sanctioned/Embargoed)

Prohibition of all licenses and other approvals to export or otherwise transfer defense articles and defense services

Cuba (Sanctioned/Embargoed) Comprehensive sanctions, including deemed export controls (OFAC & BIS); Diamond Traders Sanctions against importers and exporters of rough diamonds (OFAC). Denies licenses, other approvals, exports and defense services, defense articles.

Cyprus (Sanctioned) • Denies licenses, other approvals, exports and defense services, defense articles destined for or originating except to UN Forces.

Democratic Republic of the Congo(Embargoed)

Arms Embargoed Country Denies licenses, other approvals, exports and defense services, defense articles.

Eritrea (Embargoed) Denies licenses, other approvals, exports and defense services, defense articles.

Haiti (Embargoed) ·Denies licenses, other approvals, exports and defense services, defense articles.

Iran (Sanctioned/Embargoed) Comprehensive sanctions (OFAC & BIS) Denies licenses, other approvals, exports and defense services, defense articles.

Iraq (Sanctioned/Embargoed) Prohibition on engaging in transactions with designated persons associated with former Iraqi regime; Prohibition on engaging in transactions involving certain Iraqi cultural property (OFAC) Denies licenses, other approvals, exports and defense services, defense articles.

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EAR (3 of 3) – Country Chart

Liberia (Sanctioned/Embargoed) Prohibition on engaging in transactions with designated persons associated with former Liberian regime; Prohibition on importing Liberian logs or timber products (OFAC); Narcotics Traffickers Prohibition on engaging in transactions with designated narcotics traffickers (OFAC) Nonproliferation Sanctions Prohibition on engaging in transactions with persons designated as weapons of mass destruction proliferators or supporters; Prohibition on importing products produced or provided by persons subject to nonproliferation sanctions (OFAC)

Libya (Sanctioned/Embargoed) Denies licenses, other approvals, exports and defense services, defense articles.

North Korea (Sanctioned/Embargoed) Prohibition on importing products from North Korea; Prohibitions on receiving certain transfers from the North Korean government; including donations (OFAC) Denies licenses, other approvals, exports and defense services, defense articles.

Palestinian Authority Sanctioned

Rwanda (Embargoed) Arms embargoed (BIS) Denies licenses, other approvals, exports and defense services, defense articles.

Somalia (Embargoed) Denies licenses, other approvals, exports and defense services, defense articles. Arms embargoed (BIS)

Sudan (Sanctioned/Embargoed) Comprehensive embargo (OFAC) Denies licenses, other approvals, exports and defense services, defense articles.

Syria (Sanctioned/Embargoed) Comprehensive export and re-export sanctions, including deemed export controls (BIS); Prohibitions on engaging in transactions with designated nationals of Syria and receiving certain transfers from the Syrian government, including donations (OFAC); Prohibition on engaging in transactions with designated terrorists or terrorist organizations (OFAC & BIS).

Venezuela (Sanctioned October, 2006) Sanctioned as of October 1st, 2006

Vietnam (Embargoed) •Denies licenses, other approvals, exports and defense services, defense articles.

Yemen (Embargoed) •Denies licenses, other approvals, exports and defense services, defense articles.

Zimbabwe (Sanction/Embargoed) Prohibition on engaging in transactions with designated persons who undermine democratic processes or institutions in Zimbabwe (OFAC).

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CCL

The CCL lists “reasons” for control:• AT - Anti-Terrorism • CB - Chemical & Biological Weapons • CC - Crime Control • CW - Chemical Weapons Convention • EI - Encryption Items • FC - Firearms Convention • MT - Missile Technology• NS - National Security• NP - Nuclear Nonproliferation• RS - Regional Stability• SS - Short Supply • UN - United Nations Embargo• SI - Significant Items• SL - Surreptitious Listening

Right now, Apogee is not concerned about the CCL. Why? Because the CCL protects physical “dual-use” items where Apogee leverages intellectual capital!

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EAR Violations

Per the EAR, it is unlawful to:

(a) Engage in prohibited conduct

(b) Cause, aid, or abet a violation

(c) Solicit and attempt

(d) Conspire

(e) Act with knowledge of a violation

(f) Possess with intent to export illegally

(g) Misrepresent and conceal of facts

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EAR Penalties

5.2.2 EAR (15 CFR, Part 764)• Individual criminal penalties for willful violations of up to $250,000

or imprisonment for up to ten years, or both, for each violation. • Individual criminal penalties for knowing violations of up to the

greater of $50,000 or five times the value of the exports or imprisonment for up to five years, or both, for each violation.

• Corporate criminal penalties for willful violations of up to the greater of $1,000,000 or five times the value of the exports for each violation.

• Corporate criminal penalties for knowing violations of up to the greater of $50,000 or five times the value of the exports for each violation

• Administrative penalties for each violation, including denial of export privileges, exclusion from practice, and/or the imposition of a fine of up to $12,000 for each violation, except that the fine for violations involving items controlled for national security reasons is up to $120,000 for each violation.

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