Regulatory Requirements
Export Administration Regulation (EAR)
The Commerce Department’s Export Administration Regulations govern “dual-use” items.
These are hardware, materials, equipment, software, technology, and technical data having both civilian and military or defense applications. (Title 15 CFR 700-799) Commerce places destination (country) and end-user/user-based controls by requiring prior authorization (license) prior to export.
Penalties
Criminal: $50,000 to $1,000,000 or up to 5 times the value of the export, whichever is greater per violation (range depends on the applicable law), up to 20 years imprisonment
Civil: loss of export privileges, fines up to $250,000 per violation or up to twice the value of the export
International Traffic in Arms Regulations (ITAR)
The Department of State’s International Traffic in Arms Regulations govern defense articles and activities, as well as space launch related items and activities.
(Title 22 CFR 120-129) Defense articles are defined generally as hardware, materials, equipment, software, technology, and technical date specifically designed or modified for defense or military application, without a civil performance or use equivalent. The ITAR governs many types of commercially available items built to military specifications commonly used in research activities, including but not limited to the Engineering, Biological, Information, and Space sciences.
Penalties
Criminal: up to $1,000,000 per violation, up to 10 years imprisonment
Civil: seizure and forfeiture of the articles and any vessel, aircraft, or vehicle involved in attempted violation, revocation of exporting privileges, fines of up to $500,000 per violation
Office of Foreign Assets Controls (OFAC)
The Department of Treasury’s Office of Foreign Assets Controls governs exports and other transactions with economically embargoed countries and parties as well as those designated as sponsoring terrorism.
While OFAC maintains economic embargoes with numerous countries, the most comprehensive sanctions include Cuba, Iran, North Korea, and Syria. Similar to the EAR and ITAR, transactions with these countries require licenses, which may or may not be authorized depending on the country and nature of the transaction.
Penalties
Criminal: up to $1,000,000 per violation, up to 10 years imprisonment
Civil: $55,000 to $250,000 fines (depending on applicable law) per violation