ITAR compliance: Can of worms?

[Phil Hobbs]

Hi, all,

I have an offshore customer who wants to work together on some dual-use
infrared imaging technology. That of course is one of the hot buttons
of ITAR, so in order to make sure that I stay out of jail, I'll need at
very least to get an official determination of whether it's allowed or
not. (There's a documented process for doing that--apparently you just
send in a description of what you're planning to do, and they tell you
"yes" or "no".)

Back in the day (like around 2001, the last time I needed to worry about
this) there was a specific exemption in the US Munitions List for
infrared imagers using PVDF, but that seems to be gone now, so I have to
be extra-careful.

I know that big military contractors have whole departments devoted to
ITAR compliance, but I have no idea what's it like for small outfits.

I'd like to do the work, because it's interesting and might actually
advance the cause of civilization a little, but it isn't worth risking
that kind of trouble.

What I'd like to know is if anyone here has experience doing
ITAR-controlled work, especially in a small outfit. Easy? Dangerous?

Thanks

Phil Hobbs




--
Dr Philip C D Hobbs
Principal Consultant
ElectroOptical Innovations LLC
Optics, Electro-optics, Photonics, Analog Electronics

160 North State Road #203
Briarcliff Manor NY 10510 USA
+1 845 480 2058

hobbs at electrooptical dot net
http://electrooptical.net

 

[[email protected]]

We deal with that a lot. We're not in jail yet, but that could be luck. You
could contact Matt or Kevin... they handle it for us.

I think there are still two or three separate agencies (Commerce? Defense?)whose
rules need to be followed. And it's not just work done for offshore entities;
we're responsible for indirect sales, too.

It's ironic that I can buy a part that's made in, say, Japan, and have to be
careful about shipping one back to Japan.

That's the government. I had a friend who was in charge of the
construction of a fuel tank, along the Hudson river. He wanted to
fill the tank with Hudson River water and then discharge it back into
the river when he was done. No can do. Hudson River water is too
polluted to discharge into the Hudson River. Huh? That's government.

 

[Phil Hobbs]

We deal with that a lot. We're not in jail yet, but that could be
luck. You could contact Matt or Kevin... they handle it for us.

I think there are still two or three separate agencies (Commerce?
Defense?)whose rules need to be followed. And it's not just work done
for offshore entities; we're responsible for indirect sales, too.

It's ironic that I can buy a part that's made in, say, Japan, and
have to be careful about shipping one back to Japan.

Yeah, I sent an inquiry to the Defense Trade help desk,
[email protected], and they were pretty helpful in their way--within a
couple of hours I received this:

"You would have to register with DDTC as an exporter. Although you are
producing unclassified tech data, you are exporting it to a foreign
party and providing a defense service as defined in Part 120.9 of the
ITAR to Israel. The provision of a defense service requires an approved
Technical Assistant Agreement (TAA) under Part 124 of the ITAR. The
annual initial fee for registration is $2,250.00. As an exporter you
would pay a minimum of $2,750 for the second year.

To register do the following:

Go to www.pmddtc.state.gov and on the Home Page click on the link to
Registration. There you will find the application form and complete
instructions for a complete submittal package.
If this is a renewal of registration, please note that renewal is
exactly the same as registering for the first time. You must submit a
complete package.

Once registered, in order to app.ly for the TAA, you must sign up for
the D-Trade electronic licensing system. This can be accessed from our
website, www.pmddtc.state.gov in the section on DTrade. On the main
D-Trade Page, click on the link to "Getting Started with D-Trade" in the
gray box on the right hand side for instructions.

Plus all the record-keeping and compliance hassles from now till
Doomsday. Oh, well, I just turned the job down. A pity.

Cheers

Phil Hobbs

--
Dr Philip C D Hobbs
Principal Consultant
ElectroOptical Innovations LLC
Optics, Electro-optics, Photonics, Analog Electronics

160 North State Road #203
Briarcliff Manor NY 10510 USA
+1 845 480 2058

hobbs at electrooptical dot net
http://electrooptical.net

 

[George Herold]

Yeah, I sent an inquiry to the Defense Trade help desk,
[email protected], and they were pretty helpful in their way--within a
couple of hours I received this:

"You would have to register with DDTC as an exporter. Although you are
producing unclassified tech data, you are exporting it to a foreign
party and providing a defense service as defined in Part 120.9 of the
ITAR to Israel. The provision of a defense service requires an approved
Technical Assistant Agreement (TAA) under Part 124 of the ITAR. The
annual initial fee for registration is $2,250.00. As an exporter you
would pay a minimum of $2,750 for the second year.

Phil, did I read this right?
So even though you are only exporting 'unclassified tech data' and not any real hardware, you still have to 'jump through hoops'?

George H.

 

[Phil Hobbs]

Phil, did I read this right?
So even though you are only exporting 'unclassified tech data' and not any real hardware, you still have to 'jump through hoops'?

George H.

Yup. It would have been designing improved infrared pixels based on a
new wrinkle in antenna coupled tunnel junctions, work I could easily
have published in the open literature.

Cheers

Phil Hobbs

--
Dr Philip C D Hobbs
Principal Consultant
ElectroOptical Innovations LLC
Optics, Electro-optics, Photonics, Analog Electronics

160 North State Road #203
Briarcliff Manor NY 10510 USA
+1 845 480 2058

hobbs at electrooptical dot net
http://electrooptical.net

 

[Spehro Pefhany]

Phil, did I read this right?
So even though you are only exporting 'unclassified tech data' and not any real hardware, you still have to 'jump through hoops'?

George H.

If you take controlled technical data on a notebook computer or an
iPad or a thumb drive outside the US borders you're deemed to have
permanently exported it, even if it never left your sight.

I have had to deal with this stuff for some time now-- even though
there now are other uncontrolled sources for the sensitive
technology.. it's really a shot in the arm for non-US makers that
could not otherwise compete with relatively low US prices (volume) and
high quality.


Q. What are the penalties for violating the AECA?

A. The civil penalties are a fine up to $500,000 per violation and up
to five years in jail. The criminal penalties are a fine up to $1
million per violation and up to ten years in jail. In addition, the
violator can be debarred for a period of time from obtaining export
licenses and possible debarment from receiving any U.S. Government
contracts.

Q. The civil penalty of up to $500,000 per violation doesn’t seem too
bad.

A. It does when you consider that a single case may involve more than
100 alleged violations.


--sp

 

[George Herold]

If you take controlled technical data on a notebook computer or an
iPad or a thumb drive outside the US borders you're deemed to have
permanently exported it, even if it never left your sight.

I have had to deal with this stuff for some time now-- even though
there now are other uncontrolled sources for the sensitiv
technology.. it's really a shot in the arm for non-US makers that
could not otherwise compete with relatively low US prices (volume) and
high quality.

Ahh OK, So 'controlled' is not the same as 'classified'? One can have unclassified data that is still controlled? (Maybe I don't want to know the answer.) I assume if it's published in some journal that it's not controlled?
Could Phil publish his scheme and then help a foreign customer get it working?

OK and what about the cloud? Say I put something into dropbox?

I'm very happy living on the trailing edge of technology :^)

George H.

Q. What are the penalties for violating the AECA?
A. The civil penalties are a fine up to $500,000 per violation and up
to five years in jail. The criminal penalties are a fine up to $1
million per violation and up to ten years in jail. In addition, the
violator can be debarred for a period of time from obtaining export
licenses and possible debarment from receiving any U.S. Government
contracts.

Q. The civil penalty of up to $500,000 per violation doesn’t seem too
bad.

Ahh much more than I can afford!

 

[Lasse Langwadt Christensen]

Den mandag den 18. november 2013 21.38.21 UTC+1 skrev George Herold:

Ahh OK, So 'controlled' is not the same as 'classified'? One can have unclassified data that is still controlled? (Maybe I don't want to know the answer.) I assume if it's published in some journal that it's not controlled?

Could Phil publish his scheme and then help a foreign customer get it working?



OK and what about the cloud? Say I put something into dropbox?

http://en.wikipedia.org/wiki/Pretty_Good_Privacy#Criminal_investigation

would you take the risk? it only takes one bureaucrat with an axe to grind
and it is either they win or you lose

-Lasse

 

[rickman]

Yup. It would have been designing improved infrared pixels based on a
new wrinkle in antenna coupled tunnel junctions, work I could easily
have published in the open literature.

Don't be so sure of that. When I worked with a defense contractor where
we handled very little classified info, we had all sorts of ITAR
restrictions and could not even talk to vendors until they were approved
by the ITAR folks. DOD can decide after the fact that your release of
the info was against the rules. Not so much different than classified
info on crypto and such where they classify your work after you try to
publish it.

To George: The point is to prevent the spread of information, not just
hardware. In fact, the hardware could be shipped with appropriate
approvals while they might never approve of sending the various manuals.
Not sure why the difference, but I guess having the hardware is not so
important if details of the critical technology is hard to extract.

Was there a reason why you couldn't do this through a third party who
assure the sanitizing or approval of release of the info?

 

[miso]

That's right. And you won't hear a single teabagger say "big intrusive
government", either.

Hey, the tea baggers are the ones pushing the trap laws. They love big
government.

 

[rickman]

Hey, the tea baggers are the ones pushing the trap laws. They love big
government.

Why don't you guys go get a room? Take your political crap somewhere
else. Can't you leave a non-political thread alone?

 

[Spehro Pefhany]

Ahh OK, So 'controlled' is not the same as 'classified'? One can have unclassified data that is still controlled? (Maybe I don't want to know the answer.) I assume if it's published in some journal that it's not controlled?
Could Phil publish his scheme and then help a foreign customer get it working?

OK and what about the cloud? Say I put something into dropbox?

I'm very happy living on the trailing edge of technology :^)

George H.

Here's an article on one case that probably has (deliberately) had a
considerable chilling effect:-

http://www.businessweek.com/articles/2012-11-01/why-the-professor-went-to-prison#p1


On the plus side, if there is one, an executive of a small US
aerospace firm told me that he was not interested in dealing with
non-controlled commercial opportunities because then he'd have to
compete with companies paying their engineers half as much.

As of early this year, they're removing some space stuff from the
USML.

http://www.spacenews.com/article/ci...seen-as-boon-to-us-satellite-component-makers



Best regards,
Spehro Pefhany

 

[George Herold]

On Mon, 18 Nov 2013 12:38:21 -0800 (PST), the renowned George Herold

Here's an article on one case that probably has (deliberately) had a
considerable chilling effect:-

http://www.businessweek.com/articles/2012-11-01/why-the-professor-went-to-prison#p1

Scary! On page four it says Sherman who helped the feds got 14 months and went bankrupt*.
Damned if you do and damned if you don't!

George H.

*with $400k in debts, mostly student loans! How do you get $400k in student loans?

 

[Nico Coesel]

Yeah, I sent an inquiry to the Defense Trade help desk,
[email protected], and they were pretty helpful in their way--within a
couple of hours I received this:

"You would have to register with DDTC as an exporter. Although you are
producing unclassified tech data, you are exporting it to a foreign
party and providing a defense service as defined in Part 120.9 of the
ITAR to Israel. The provision of a defense service requires an approved
Technical Assistant Agreement (TAA) under Part 124 of the ITAR. The
annual initial fee for registration is $2,250.00. As an exporter you
would pay a minimum of $2,750 for the second year.

To register do the following:
Once registered, in order to app.ly for the TAA, you must sign up for
the D-Trade electronic licensing system. This can be accessed from our
website, www.pmddtc.state.gov in the section on DTrade. On the main
D-Trade Page, click on the link to "Getting Started with D-Trade" in the
gray box on the right hand side for instructions.

Plus all the record-keeping and compliance hassles from now till
Doomsday. Oh, well, I just turned the job down. A pity.

Pity indeed. Couldn't you team up with some research outfit or
something? They get the risk and you get the money?

 

[Jeroen Belleman]

Scary! On page four it says Sherman who helped the feds got 14 months and went bankrupt*.
Damned if you do and damned if you don't!

George H.

Yes, chilling. Complete with book-burning, a sure sign of troubled
times and oppressive regimes.

Jeroen Belleman

 

[Spehro Pefhany]

Scary! On page four it says Sherman who helped the feds got 14 months and went bankrupt*.
Damned if you do and damned if you don't!

Yes. They basically told us DO's etc. up front that voluntary
disclosure could result in a mitigation of penalties, but there
_would_ still be significant penalties.

--sp

 

[John Miles, KE5FX]

Why don't you guys go get a room? Take your political crap
somewhere else. Can't you leave a non-political thread alone?

Ordinarily I'd agree with you, but many of these unreasonable export laws only exist because technically-qualified people failed to "get political."

-- john

 

[Robert Baer]

Yup. It would have been designing improved infrared pixels based on a
new wrinkle in antenna coupled tunnel junctions, work I could easily
have published in the open literature.

Cheers

Phil Hobbs

So, tweak a few noses: do minimal work necessary for publishing, then
publish in open literature (the tweak).
Get a few others in the field to also publish (ultimate tweak).

 

[Uwe Hercksen]

That's the government. I had a friend who was in charge of the
construction of a fuel tank, along the Hudson river. He wanted to
fill the tank with Hudson River water and then discharge it back into
the river when he was done. No can do. Hudson River water is too
polluted to discharge into the Hudson River. Huh? That's government.

Hello,

it is not unlogical, Hudson River water is polluted, any water
discharged into the Hudson River should be cleaner than the water
already in it.

Bye

 

[John Devereux]

So, tweak a few noses: do minimal work necessary for publishing,
then publish in open literature (the tweak).
Get a few others in the field to also publish (ultimate tweak).

Publish it here