What are the differences between ITAR vs. EAR?

In this post, we do a deep dive into the differences between the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR).
Jun 28, 2024
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What are the differences between ITAR vs. EAR?
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Navigating compliance regulations can be a complex task for manufacturers, especially when it comes to the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR). While these two sets of regulations are similar in many ways, they do serve different purposes and have distinct requirements.

For manufacturers, the key to maintaining compliance with ITAR and EAR lies in understanding the nuances that set them apart. Having that clarity unlocks your ability to fulfill your compliance requirements, whether that's maintaining accurate visitor documentation or setting up a visitor sign-in flow for non-U.S. citizens.

Defining ITAR and EAR

The only constant in the world of laws and regulations is change. Since 1981, the U.S. has introduced, on average, one new manufacturing-related law per week. With recent updates to ITAR and EAR, manufacturers need to have a solid understanding of these regulations to effectively monitor and adapt to any changes.

What is ITAR?

ITAR is a set of U.S. government regulations that control the export and import of defense-related technology and services. Compliance entails registering with the Directorate of Defense Trade Controls (DDTC), ensuring ITAR data stored in the cloud is not accessed by foreign entities, and implementing strict access control measures.

If your business deals with items on the United States Munitions List (USML), you must comply with ITAR. The State Department's DDTC manages the list of businesses that can deal in USML services and goods. However, it's up to each business to establish the right policies to ensure they are ITAR compliant.

Who needs to comply with ITAR?

Companies within the following industries need to be compliant with ITAR:

  1. Defense and aerospace. Manufacturers and suppliers of military equipment, aircraft, and defense systems.
  2. Technology. Firms developing or providing software and technologies related to defense or military applications.
  3. Engineering and manufacturing. Companies producing components or systems used in defense or aerospace industries.
  4. Research and development. Entities engaged in research for military or defense technologies.
  5. Export and logistics. Firms involved in the export, shipping, or transport of defense-related goods and services.

What is EAR?

EAR is a set of federal regulations that establish guidelines and rules for the export and re-export of commercial and dual-use items, which have both commercial and potential military applications. Administered by the Bureau of Industry and Security (BIS) under the U.S. Department of Commerce, EAR aims to ensure that these classifications of exports do not compromise national security or foreign policy interests. 

Under EAR, compliance involves obtaining the necessary licenses and preventing unauthorized access or transfer of controlled items, among other things.

Who needs to comply with EAR?

The following industries need to comply with EAR:

  1. Technology and electronics. Firms exporting computer hardware, software, and telecommunications equipment.
  2. Aerospace and aviation. Companies dealing with aircraft parts and navigation systems.
  3. Chemical and biological products. Manufacturers of chemicals and biological agents with potential dual-use applications.
  4. Engineering and manufacturing. Businesses producing machinery and industrial equipment.
  5. Research and development. Entities developing new technologies with commercial and potential military uses.

What are the differences between ITAR and EAR?

Both ITAR and EAR aim to protect national security by regulating the export of items with military or strategic significance. Yet, they differ in various ways:

1. Regulatory bodies

  • ITAR. As mentioned above, the DDTC is a division of the U.S. Department of State responsible for regulating the export and temporary import of defense articles and services covered by ITAR. The DDTC helps protect U.S. national security and foreign policy interests by managing certain activities. Their core responsibilities include:
    • Reviewing and approving export license applications.
    • Ensuring compliance through audits and investigations.
    • Developing export control policies.
    • Enforcing ITAR regulations through penalties and sanctions for violations.
  • EAR. BIS is the division of the U.S. Department of Commerce that oversees the export of dual-use goods, technology, and software under EAR. Their core responsibilities include regulating exports, enforcing export controls, and ensuring that these activities comply with U.S. national security and foreign policy objectives. BIS enforces these laws through a combination of export licensing, compliance audits, investigations, and imposing penalties for violations.

2. Types of items controlled

  • ITAR. Manufacturers that produce military items, such as firearms, ammunition, and other defense articles, must adhere to this compliance standard.
  • EAR. This set of regulations covers a broader range of items, including commercial products with potential military use, like certain software, electronics, and chemicals.

3. Classification systems

  • ITAR. The ITAR classification system categorizes defense-related items into 21 categories on the USML. Each item is assigned a category based on its type and use, ensuring that sensitive technologies are properly identified and controlled. ITAR enforces regulations through strict export licensing and compliance checks, preventing unauthorized access to defense technologies and protecting national security.
  • EAR. The EAR classification system categorizes dual-use items—those with both commercial and military applications—using Export Control Classification Numbers (ECCNs) listed on the Commerce Control List (CCL). Each ECCN defines the type of controls applicable based on the item's nature and destination, facilitating the enforcement of EAR laws through licensing requirements and compliance checks. This system ensures that sensitive technologies are monitored and controlled to prevent misuse.

4. Licensing requirements

  • ITAR. Under ITAR, companies must obtain export licenses for transferring defense-related articles, services, and technical data listed on the USML. To obtain a license, exporters must submit an application to the DDTC for review and approval.
  • EAR. Under EAR, companies that export items listed on the CCL are required to obtain licenses. The licensing process involves determining the item's ECCN, the destination country, the end user, and the use case. Exporters must submit a license application to the BIS, which evaluates the application based on national security, foreign policy, and proliferation concerns.

5. Fines and penalties

  • ITAR. Violations may result in criminal or civil penalties, being barred from future exports, and/or other severe fines, including:
    • Civil fines as high as $500,000 per violation.
    • Criminal fines of up to $1,000,000 and 10 years imprisonment per violation.
  • EAR. Companies that fail to meet EAR compliance can be subject to criminal and/or administrative penalties. Criminal penalties can land individuals in prison for up to 20 years, plus up to $1 million in fines per violation. Administrative monetary penalties can reach up to $300,000 per violation.

How a visitor management system helps maintain compliance with ITAR and EAR

A Visitor Management System (VMS) such as Envoy Visitors has plenty of features that can significantly aid companies in maintaining compliance with ITAR and EAR. These include:

  • Identity screening integrations allow VMS to cross-check visitor information against various databases, ensuring that only authorized individuals gain access to sensitive areas. These features help verify that visitors are not on any restricted lists, which is crucial for compliance with both ITAR and EAR. For instance, EAR requires screening against the Entity List, Denied Persons List, and Unverified List.
  • Blocklists are particularly useful for ensuring that individuals who are known risks or who have previously violated export controls are denied entry. ITAR regulations prohibit access to foreign nationals unless they have been specifically authorized.
  • Customizable sign-in flows allow companies to tailor the visitor check-in process to collect specific information and present necessary legal documentation. For example, a sign-in flow for non-citizens may contain questions and documents to sign that differ from those of a U.S. citizen. Some visitors might also be required to sign NDAs or other compliance-related agreements before entering certain areas. This feature ensures that visitors are informed of and agree to comply with relevant ITAR and EAR requirements.
  • Digitized visitor logs enable businesses to maintain detailed records of all visitor activity, including who visited, when, and who they visited. These logs provide an auditable trail of visitor activity, which is necessary for compliance audits and investigations related to ITAR and EAR. For example, ITAR-registered companies must have a documented visitor management process that verifies whether visitors are U.S. citizens. As a result, visitors may be required to sign an ITAR NDA and a technology control plan (TCP) briefing.

Are you interested in learning how Envoy can help you meet all your ITAR and EAR requirements? Schedule your demo today!

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AUTHOR BIO
Content Marketing Manager

Giulianno Lopez is a Content Marketing Manager here at Envoy, where he specializes in crafting content centered around workplace security and compliance. When he's not working, you can find him at Golden Gate Park training for his next race.

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