ITAR Violations & Penalties

Sesco Industries is proud to be an ITAR Compliant business. ITAR regulates technical data, which includes information about defense articles like blueprints, plans, and documentation. What this means then is that companies handling technical data must follow the ITAR rules. In order to remain ITAR compliant, companies must limit technical data access to US persons. Any non-US persons need US government authorization, usually through licensing and certification. If these rules are broken, then there are penalties. Let's take a closer look into some of these common violations, the penalties that may incur, and steps to make sure you stay compliant.

5 Common ITAR Violations

There are several common ITAR violations that can result in penalties and legal action. Here are five of the most frequent ones:

  1. Failure to register: Companies that work with ITAR-controlled technology must register with the US Department of State’s Directorate of Defense Trade Controls. Failure to register can result in penalties and legal action.
  2. Unauthorized access: Allowing individuals who are not authorized to access ITAR-controlled information or technology is a violation. This may include sharing sensitive information with unauthorized employees or contractors.
  3. Failure to maintain records: Companies must maintain accurate and complete records of all ITAR-controlled technology transactions, including exports and retransfers. Failure to maintain these records can result in penalties and legal action.
  4. Failure to provide required disclosures: Companies that work with ITAR-controlled technology must disclose certain information to the US government, including information about any foreign persons that will have access to the technology. Failure to provide these disclosures can result in penalties and even legal action.
  5. Export violations: Exporting ITAR-controlled technology without a license or in violation of licensing requirements is a serious violation. This includes physical exports, as well as electronic exports such as sending files or data to foreign countries.

It is important for companies to have a comprehensive ITAR compliance program in place to avoid these common violations and ensure they are meeting all ITAR requirements. At Sesco Industries, we take the necessary steps and precautions to ensure full ITAR compliance.

Penalties for ITAR Compliance Violations

Penalties for ITAR compliance violations can be severe, including civil fines, criminal charges, and even imprisonment. The U.S. Department of State’s Directorate of Defense Trade Controls enforces ITAR regulations. They have the power to investigate violation criminal fines and take action against any violation. More on these penalties:

  • Civil Penalties: Entities and individuals alike that violate any provision of ITAR are subject to civil fines and penalties up to $500,000 per violation or twice the amount of the transaction, whichever is greater. 
  • Loss of Export Licenses: Organizations that violate any provision of ITAR may lose their export license. The export license is the second important requirement after registration if a company wishes to export defense-related items outside the country.
  • Criminal Penalties: Criminal penalties, which can include fines and imprisonment, are also possible for serious ITAR violations. Individuals who violate ITAR regulations can face criminal fines and up to 10 years in prison. Companies can be fined up to $1 million per violation.
  • Reputational Damage: ITAR violations can have a detrimental effect on a business' reputation. Customers trust a company if it has a reputable standing in the market. Known violators may lose customer trust and some important clients as they may be hesitant to work with companies that have a history of violations.

It is important for companies that deal with defense-related products and services to establish an ITAR compliance program that includes policies, procedures, training, and ongoing monitoring to ensure that all activities are in compliance with ITAR regulations. This way you can avoid penalties.

How To Avoid ITAR Violations

ITAR Compliance Checklist for Protecting Your Data and Defense Services

An ITAR compliance checklist can help ensure that your organization is taking all necessary steps to protect your data and avoid penalties for noncompliance. Here are some of the key items on the checklist to include in an ITAR compliance checklist.

  1. Identify all ITAR-controlled technical data, articles, and services.
  2. Train all employees who work with ITAR-controlled data on the regulations and procedures related to ITAR compliance.
  3. Implement a compliance program to ensure that all employees are aware of ITAR regulations and are following the necessary procedures.
  4. Keep records of all ITAR-controlled technical data, articles, and services, including any transfers of data to other organizations.
  5. Control access to ITAR-controlled data by only providing access to authorized personnel.
  6. Implement appropriate physical and digital security measures to protect ITAR-controlled data.
  7. Conduct regular audits and assessments to ensure that your organization is maintaining compliance with ITAR regulations.
  8. Have a plan in place for responding to any potential violations of ITAR regulations, including reporting the violation to the appropriate authorities.

By following this eight-part checklist, you can help ensure that your organization is fully compliant with ITAR regulations and is taking all necessary steps to protect your sensitive data.

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Companies need strong data security measures in order to stay ITAR compliant. This means they must use access controls, like firewalls and user authentication, in order to protect data and allow only authorized access. Companies also need the proper systems in place. This way they can detect unauthorized access attempts quickly. When transferring technical data from outside the US, companies must meet ITAR requirements. Sesco Industries is proud to be ITAR compliant, which includes getting licenses or authorizations from the US government and using secure communication channels when dealing. Contact us today to learn more about our ITAR compliance and why it is crucial in this industry.

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When you purchase through Sesco Industries, you can do so with confidence knowing we are fully compliant with ITAR. When you reach out to us, we can provide you with more details regarding aerospace parts.

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