One of the most important areas of regulation for defense contractors is the International Traffic In Arms Regulations (“ITAR”). ITAR are the State Department controls that regulate the defense industry.2 Companies regulated under ITAR are subject to a number of requirements including registration, licensing, restrictions on transferring controlled technical data and performing defense services, among others. Following recent amendments, a second set of regulations – the Export Administration Regulations (“EAR”)3 – impose related requirements for government contracts firms and must be considered alongside ITAR. Contrary to popular belief, these apply beyond export transactions to many domestic activities of U.S. defense firms – they can apply even if the company’s only customer is the U.S. Government. Due to the potential civil and criminal liability involved, it is imperative for defense firms to have a clear understanding of these laws. The following provides an overview of these requirements and strategies for complying with them.
Article provided by Thomas B. McVey, Williams Mullen