The International Traffic in Arms Regulation (ITAR) is an established authoritative and mandatory list of compliance guidelines. These guidelines are set by the State Department’s Directorate of Defense Trade Controls “DDTC”. It is particularly stringent with companies that export products or information outside the United States.
These protocols that the DDTC provides can be complicated, which could leave your company vulnerable to varying degrees of both civil and criminal repercussions. ITAR compliance dictates that not only must your business be fully compliant, they must also be current with amendments and updates to ITAR regulations. Keep in mind that ITAR commodities are not just specific to the shipping of physical goods, but also virtual commodities such as technical data, sensitive files and CUI documents.
With each ITAR violation comes a risk for heavy penalties and fines. The DDTC expects all exporters of defense commodities to be organizationally sound and resourceful enough to ensure all the standards that the ITAR requires.
What are the penalties?
Due to the nature of ITAR regulations, Small and Medium Sized Enterprises (SMEs) are most at risk due to nuances of export compliance. Companies working with CUI are carefully monitored by The State Department, who partner with other government agencies to monitor businesses to ensure compliance to export control laws. The State Department takes ITAR violations very seriously, with criminal violations reaching $1 Million Dollars and 10 years imprisonment. Civil penalties, which are much more common can reach millions of dollars in fines. While large companies are financially insulated against such fines, they may also be subject to debarment, which blacklists the company from government contracts and working with companies who have government contracts.
What if you fail to comply?
Communication is key when it comes to preventing fines from the DDTC. Willful failure to comply with ITAR is subject to the highest degree of fines and penalties. Being prepared also goes a long way—if your company appears to have knowledge of an ITAR compliance issue, there should be a system in place that would allow your company to report the issue to officials.
What if you make a mistake?
When working with ITAR related materials, mistakes can happen simply due to human error. This is something that becomes possible given the scope of the regulations and can affect companies of any size. The DDTC might consider leniency on such occasions, under the right circumstances. ITAR provides the opportunity for voluntary disclosure. By being forthcoming about any mistakes and having a solid action plan to improve, fines and penalties may be reduced or eliminated.
Why honesty is important to compliance.
Given the nature of ITAR, it is in your company’s best interest to be fully honest. By misrepresenting or even not disclosing pertinent information, then the same penalties can apply as being noncompliant. You can prevent this by taking a thorough approach to compliance and ensuring that any and all information is disclosed.
What can you do to avoid a violation?
There will continue to be increasingly complex regulations in response to both attempts at cyber-hacking of cloud-based storage by bad actors as well as lax cyber-security practices by those using and providing cloud services. But if you love your export business and the thought of excessive penalties scares you (which they should), then don’t chance non-compliance of ITAR. Intentionally or not, there is a lot to lose violating regulatory compliance (ITAR/DFARs). Disaster can be pending on the horizon for you and your business from a single infraction that could have been avoided.
Take the step to secure your business and prevent future dilemmas by partnering with an ITAR compliant secure data room solution provider like RegDOX so you can focus on what’s important, your business! We at RegDOX have been innovative in responses to new and revised cyber-security regulations and provided our customers with solutions so inventive that they warrant patent protections for meeting and exceeding entirely justifiable regulatory requirements. Configurable, affordable, and coming with a “DDTC-reviewed” advisory opinion for ITAR compliance – what’s not to love? Get started now – https://www.regdox.com/contact/
About RegDOX Solutions Inc.
Operating since 2007, RegDOX Solutions Inc. is a market-leading provider of highly intuitive SaaS solutions enabling customers to securely manage and collaborate on confidential documents and information, whether inside or outside of their IT environments. RegDOX® offers compliance options for the transference and storage of ITAR, DFARS, EAR, HIPAA, and Corporate technical data within the cloud through highly intuitive, feature-rich virtual data room solutions. In addition, RegDOX offers DFARS assessment services for contractors and subcontractors of the DoD.