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© CGI Group Inc. CONFIDENTIAL
GENERAL AWARENESS TRADE
COMPLIANCE TRAINING FOR NEW HIRES
Presentation Agenda
• U.S. Export Laws And Regulations • Basic Export Concepts And Terminology • Embargoes / Prohibited Countries • Questions To Ask • Export Authorizations – ITAR And EAR • Compliance • Addressing Violations • Contact Info
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Presentation Goals
CGI Federal is committed to being in compliance with all
U.S. export and import laws, rules and regulations. This
presentation will:
• Provide a basic understanding of the U.S. export
regulations
• Provide a basic understanding of how the regulations
impact CGI Federal employees, products, programs and
activities
• Emphasize that compliance is a team effort
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U.S. Export Laws and Regulations ITAR and EAR
Reasons for Export Laws
• The primary reason for export laws is to protect our
national security.
• However, export laws also help the U.S. government to
implement foreign policy such as regional stability, human
rights and crime control.
• Export laws also helps the U.S. honor the agreements and
treaties that are in place with other countries and to honor
UN and NATO commitments.
• Export laws also help to prevent the proliferation of
Weapons of Mass Destruction
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Primary U.S. Export Control Regimes
ITAR
• The law: Arms Export Control
Act
• The regulations: International
Traffic in Arms Regulations
(ITAR)
• Administered by the Dept. of
State, Directorate of Defense
Trade Controls
• Encompasses military and
intelligence applications on the
U.S. Munitions List
EAR
• The law: International
Emergency Economic Powers
Act
• The regulations: Export
Administration Regulations
(EAR)
• Administered by the Dept. of
Commerce, Bureau of Industry
and Security
• Encompasses dual use and
commercial items and military
items not requiring tighter
controls on the Commerce
Control List.
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Other Applicable Laws and Regulations
• Dept. of Treasury, Office of Foreign Assets Control (OFAC)
– Regulates economic embargoes and sanctions on specific
countries, end uses and end users;
• Dept. of Homeland Security, Customs and Border
Protection (CBP) – Regulates the processing of documents
for exports and imports; and
• Dept. of Justice, Bureau of Alcohol, Tobacco, Firearms and
Explosives ( BATFE) – Regulates the import of items found on
the U.S. Munitions List
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U.S. Export Laws Apply To:
• All persons (not just U.S. persons) engaged in exports / re-
exports of U.S. export controlled items regardless of
location. Export controlled items include:
• U.S. origin items
• Non-U.S. origin items physically located in the U.S.
• Non-U.S. origin items located in foreign countries made using U.S.
technology or components
• Permanent and temporary exports and imports
• All non-U.S. entities in the U.S. (embassies, consulates,
missions, etc.)
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U.S. Export Laws Apply To:
• All non-U.S. countries • Canada and Mexico are non-U.S. countries
• Classified and unclassified information and items • Military and commercial products • Foreign Military Sales • Services provided to foreign entities regardless of location
EVERYTHING FALLS UNDER ONE OF THESE TWO EXPORT REGIMES!
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U.S. Export Laws Apply To:
Scenario:
• CGI Federal is provides training to a foreign military
student. CGI Federal is providing data, software and/or
services to non-U.S. persons, therefore CGI Federal is
exporting and is responsible for export compliance
regardless of our contract or instructions by the U.S.
Government
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Basic Export Concepts and Terminology ITAR and EAR
Terminology - Export
• Export
• Physically sending or taking a product, software or technology out of
the United States via any method including:
• Sending technical data abroad;
• Making oral or visual disclosures of products or technology; and
• Providing electronic access or transmission outside the U.S. (via emails,
FTP, bulletin boards, VPN access, software downloads, world wide web,
etc.).
• Providing technical data to non-U.S. persons within the U.S.; and
• Providing controlled technical services to a non-U.S. person whether
outside or inside the U.S.
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Who are U.S. Persons and Non-U.S. Persons?
A U.S. person: • Is a U.S. citizen
• Holds lawful Permanent Resident status (green card)
• Is a “protected person” or “refugee” under the U.S. Asylum program
• Entity incorporated to do business in the U.S.
A non-U.S. person: • A person who holds student or work visa
• Some CGI members
• Embedded foreign exchange officers
• A U.S. person representing a non-U.S. entity
• An employee of a company’s non-U.S. facility
• Non-U.S. government and its offices (i.e., Embassies)
• A non-U.S. owned or controlled entity
• Dual Nationals
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No Export
Approval
Required
Export
Approval
Required
Terminology – Re-exports/Retransfers
• Re-export
• A shipment of a controlled U.S. origin product or technology from
one foreign country to another
• Re-transfer
• A shipment of a controlled U.S. origin product or technology from one party
in a foreign country to another party in the same country;
• Deemed export
• A transfer of a controlled U.S. origin product or technology to a non-U.S.
person with in the U.S.
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Terminology – Defense Articles (ITAR)
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• Hardware, technical data or software that is “specially designed” for or provides a critical military or intelligence advantage, for a military application.
• Classified hardware, technical data or defense services
• Subject to an invention secrecy order
• Anything else that should be controlled by the Department of State
Terminology – Tech Data
• Technical Data (ITAR)
• Information (including software) required for the design,
development, manufacture, assembly, production, operation,
modification, testing, maintenance or repair of a defense article
• Information specifically included in a Technical Data category on the
U.S. Munitions List (USML)
• Patent information covered by an invention secrecy order
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Terminology – Technical Data - ITAR
• Technical Data does not include: • Basic marketing information or general description of the
article • Information containing general scientific principles or
information in the public domain • Information found on the internet is not necessarily public
domain
• Can be in any form • Verbal, visual, electronic, hard copy • Drawings, specifications, discussions or requirements,
emails, web postings, photographs, models or mock ups
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Terminology – Services - ITAR
• What is a defense service (ITAR)?
• Furnishing of assistance (including training) to non-U.S.
persons, whether in the United States or abroad
• Design, development, engineering, manufacture, production,
assembly, testing, repair, maintenance, modification, operation,
demilitarization, destruction, processing or use of defense articles;
• Furnishing of controlled technical data to a non-U.S. person
whether in the U.S. or abroad; and
• Military training of foreign units and forces.
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Terminology – Commercial / Dual Use
Commodity (EAR)
• Hardware, technology or software originally designed for a commercial application
• Hardware, technology or software that has civil applications as well as terrorism and military or weapons of mass destruction-related applications.
• Items that are exclusively used for military applications but that do not warrant control under the ITAR.
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Terminology – Technology - EAR
• What does Technology (EAR) mean? • Specific information necessary for the
development, production or use of a
product.
• Takes the form of: • “technical data” (blueprints, plans,
diagrams, models, formulae, tables,
engineering designs and specifications,
manuals and instructions); or
• “technical assistance” (instructions,
skills, training, working knowledge,
consulting services) and it may involve
transfer of technical data.
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Embargoes / Prohibited Countries
Embargoes / Prohibited Countries / Entities
• U.S. policy to deny exports to certain countries or entities
through the use of:
• U.S. embargoes;
• U.S. sanctions;
• U.N. or NATO embargoes or sanctions which the U.S. honors.
• Government restricted lists:
• U.S. Dept. of State - Debarred List
• U.S. Dept. of Commerce - Denied Parties List, the Enhanced
Proliferation Control Initiative List and the Unverified Users
List
• Office of Foreign Assets Control - Specially Designated
Nationals List
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ITAR Embargoes
• Prohibited countries
• Belarus, Cuba, Eritrea, Iran, North Korea, Syria and Venezuela
• Arms embargo
• Burma (aka Myanmar), China, and the Republic of Sudan
• UN embargo
• Cote d’Ivoire, Democratic Republic of Congo, Eritrea, Iraq, Iran,
Lebanon, Liberia, Libya, North Korea, Somalia and the Republic of
Sudan
• Terrorism
• Cuba, Iran, North Korea, the Republic of
Sudan and Syria
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ITAR Embargoes
• General policy of denial
• Afghanistan, Central African Republic, Cote d’Ivoire, Cyprus,
Democratic Republic of Congo, Haiti, Iraq, Lebanon, Liberia,
Libya, Somalia, Sri Lanka, Republic of Sudan, Vietnam, and
Zimbabwe
NOTE: Even if shipping to the U.S. Government (Military or otherwise) in
Afghanistan, export approval is required by DDTC regardless of
method of shipment (including MILAIR).
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EAR Comprehensive Controls
• Embargoes
• For all exports: Crimea, Cuba, Iran, Iraq, North Korea, Russian
Industry Sector, and Syria
• For military items: Afghanistan, Belarus, Burma, Central African
Republic, China, Democratic Republic of Congo, Cote d’Ivoire,
Cuba, Cyprus, Eritrea, Fiji, Haiti, Iran, Iraq, North Korea, Lebanon,
Liberia, Libya, Somalia, Sri Lanka, Republic of the Sudan, Syria,
Venezuela, Vietnam and Zimbabwe.
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OFAC Sanctions
• Specially Designated Nationals
• Counter Terrorism
• Non-Proliferation
• Counter Narcotics Trafficking
• Iran
• Other
• Balkans, Belarus, Burma (aka Myanmar), Cote d’Ivoire, Cuba,
Congo, Diamond Trading, Iraq, Charles Taylor, Lebanon, Libya,
North Korea, Somalia, Sudan, Syria and Zimbabwe
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Anti-boycott
• U.S. Government maintains laws and regulations
prohibiting “U.S. persons” from engaging in support for
boycotts
• Principally directed at the Arab League’s boycott of Israel
• India and Pakistan also boycott each other
• “U.S. person” under these regulations includes both U.S.
and non-U.S. employees of CGI Federal
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Anti-boycott
• Example of boycotting language: “Shipment must not be
effected by Israeli flag vessel.”
• We can state the positive: “CGI Federal will make
shipment via U.S. flag vessel.”
• Report boycotting language to Trade Compliance.
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Questions to Ask
Questions to Ask Prior to Engaging in an Export
• Is there export controlled information or hardware
involved?
• Is there a reason to ship export controlled materials out of
the United States?
• Will there be any transfer of export controlled information
to non-U.S. persons?
• Is the contract or subcontract with a non-U.S. party or will
we have to deliver anything to a non-U.S. party?
• Are there any foreign partners or employees or any other
foreign entities involved? Universities?
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Questions to Ask Prior to Engaging in an Export
• Will any assistance or training be provided to non-U.S.
persons?
• Will there be any requirement to transfer export controlled
materials between one non-U.S. country and another non-
U.S. country?
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Questions to Ask Prior to Engaging in an Export
• Exercise Situational Awareness
• What is the location?
• Who is present in the room?
• Who are the parties on the phone?
• Are we active participants or just listeners?
• Who can overhear or see documents?
• What are we providing?
• Be careful of the last minute attendees
• Be careful of questions that arise
• Is there an export authorization in
place?
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Questions to Ask Prior to Engaging in an Export
• New opportunities
• Ask questions:
• Is this program controlled?
• Are any foreign entities involved?
• Foreign exchange officers or USG partners
• Subcontractors
• Consultants
• Any need to ship anything to another country?
• Any requirement for foreign travel?
• Prior to any meetings, determine:
• Who will be at the meeting?
• Is anyone calling in? From where? U.S. person or not?
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Export Authorizations ITAR and EAR
Export Authorizations
• ITAR
• Licenses
• For hardware, software, technical data and sometimes defense services; and
• Covers specific end users, countries, specific scope, quantity and dollar value and
usually is valid for four (4) years.
• Agreements
• For technical data and/or defense services only; and
• Covers specific end users, countries, specific scope, quantity and dollar value and
usually is valid for ten (10) years.
• Exemptions
• In certain cases, an exemption can be used in lieu of a license; and
• Specific criteria that must be met prior to claiming the exemption.
• Example: technical data is ITAR-controlled but if the data is required by the CGI
Federal member traveling to a foreign country while on the trip, an exemption may
be cited.
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Export Authorizations
• EAR
• Licenses
• For hardware, software, and technology; and
• Covers specific end users, countries, specific scope, quantity and dollar value and
usually is valid for two (2) years.
• Exceptions
• In certain cases, an exception can be used in lieu of a license; and
• Must meet specific criteria prior to claiming the exception.
• Example: VPN is controlled, but there is an exception that may be used when
taking a CGI Federal-issued laptop out of the country.
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Export Authorizations
If an export authorization will be used, Trade Compliance will provide the
program with the authorization, and an Internal Control Plan which will
outline what can be done, what cannot be done, the parties that may
have access, the validity period, and any other pertinent information. In
many cases, the CGI Federal member will be required to keep records of
the exports. If this is the case, Trade Compliance will provide the
program with an export record keeping form.
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Compliance
How To Be Compliant
• Have an Export Strategy • Export compliance must be part of every new product design,
program, marketing or sales activity, hiring decision and procurement requirement
• Do any export laws apply?
• Is it ITAR or EAR?
• Are there any other U.S. laws applicable?
• Are there any non-U.S. laws applicable (imports into a country)?
• Are export or re-export approvals required?
• How much time will approvals take?
• Is the program schedule realistic?
• Expedites are not easy to obtain.
• Is Approval likely to be granted?
• What is the scope/activity/products/technology?
• What countries and end users? What are their roles?
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Compliance
• Export Requirements: • Recordkeeping requirements
• EAR – 5 years from date of export
• ITAR – 5 years from date of license expiration
• Authorization compliance • Training on the Internal Control Plan
• Be careful of scope creep; the authorization may no longer apply if the scope changes
• Shipping documents (even for hand carries) must be filed with
Customs and Border Protection
• Import Requirements: • Imports must be cleared by Customs Broker
• Imports may require import duties or tariffs to be
paid before it can be cleared.
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Compliance
• Notify Trade Compliance if you are hosting any foreign
visitors
• Notify Trade Compliance if you are traveling to a foreign
country and provide:
• Complete itinerary;
• Items being brought on the trip
• Laptop, phone, any other hardware such as body armor
• Any technical data and the medium used
• Purpose of travel
• Planned interaction with non-U.S. persons
• Export controlled technical data must be marked with a
legend indicating that it is controlled (provided by Trade
Compliance).
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Scenario 1
• Business Development advises that they will be bidding on a proposal
for France involving automation of the French health system. CGI
Federal will be the prime, and will subcontract to CGI Group in
Montreal because their software application is in French already.
• Do you need to talk to Trade Compliance?
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Scenario 1
Yes, you must speak with Trade Compliance.
This scenario involves two foreign countries: France and
Canada although there may be additional countries involved
depending on whether the members working on this program
are non-U.S. persons or not.
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Scenario 2
• You are soliciting quotes from various manufacturers of computers for
work stations for the U.S. Department of State’s Embassies in the
Middle East. You are having the computers sent to Fairfax, VA prior to
shipping directly to the Middle East. Because it is for the U.S.
Government, you do not need to find out how the items are classified
for export by the manufacturer.
• True or False?
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Scenario 2
False, even though the computers are for the U.S.
Government, CGI Federal is the exporter in this scenario, so
we need to know if a license or authorization is required and
file the appropriate documents with Customs and Border
Protection prior to exporting the equipment.
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Scenario 3
• You are asked to conduct Counterinsurgency training. A Major from
the Australian Defence Force is in attendance.
• Do you need an export authorization?
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Scenario 3
• What do you do if you don’t have one?
• How can you avoid this?
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Scenario 3
Yes, an export authorization is required to train the Australian
officer.
If there is no export authorization, you cannot provide
training to the officer. You can:
• Ask for the officer to be removed from the training;
• Postpone the training until authorization has been
received; or
• Have the U.S. military provide the training.
• You can avoid this situation by planning ahead and asking
questions: Will any foreign students be present?
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Scenario 4
• You are preparing a counter-drug operations training course which you
will conduct in Mexico. There is an export authorization to provide the
training to the Mexican defense forces. You are advised that there will
be a Mexican translator present to help with the discussions as some
of the students do not feel conversant in English.
• What should you do?
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Scenario 4
You should determine if the translator is included on the export
authorization for the Mexican defense forces. If so, notify Trade
Compliance that the translator will be present.
If there is no export authorization for the translator, you will need
to:
• Postpone the training until an authorization is obtained;
• Have another party, such as the US Military conduct the
training; or
• Ask if there is someone who is authorized by the export license
who can translate (a member of the US Military, a member of
the Mexican defense forces, a CGI Federal member).
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Addressing Violations
Addressing Violations
• If you suspect a violation, you should:
• STOP EVERYTHING!
• The meeting
• The shipment
• The order
• The hiring process
• The visit
• The discussion
• The presentation
• The demonstration
• Contact Trade Compliance or Legal Counsel immediately
for further guidance
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U.S. Government Monetary Penalties
• There are penalties for “willful” violations
• Up to $1M per violation* for corporations
• Up to $1M per violation* and up to 10 years
in prison for individuals
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*A Violation Fine Is Often Based On Each “Unit” In An Export
U.S. Government Non-Monetary Penalties
• The non-monetary penalties for “willful” violations include:
• Seizures or forfeitures of goods/property
• Debarment from exporting defense articles and commercial products
• Denial of licenses
• Debarment from contracting with U.S. Government
• Non-U.S. CGI sites can be added to the Restricted Parties List
• Potentially damaging PR
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U.S. Government Non-Monetary Penalties
• Additional penalties for “willful” violations
• Long term monitoring and oversight activities by the U.S.
Government with:
• Requirements for written procedures;
• Requirements for automated systems;
• Mandatory audits and training;
• Restructuring of company functions ;
• Retaining a Special Compliance Monitor/Officer - the cost paid by CGI
Federal
• Decline in morale - loss of talented employees
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Contact Info
• To receive credit for the Export Compliance Awareness training
session, you will need to complete the Certification of Completion. To
do this, return to the Course Home and initiate the Certificate of
Completion.
• Sue Willard, Global Trade Compliance Director
703-227-5629
• June Dennis, Trade Compliance Specialist
703-227-4249
• Trade Compliance Email
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After You Have Completed the Training
To receive credit, you will need to take the New Hire General Awareness
Training quiz and the certification form.
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