The Differences Between ITAR and EAR

If you are in charge of a new company that will be involved in the import/export of products, then there are specific rules that you need to be aware of. Shipping items internationally and to military bases doesn’t work the same as shipping domestic packages, and if you fail to adhere to these rules, then your packages will likely fail to reach their destination. When dealing with international shipments, you must adhere to rules set forth by the ITAR as well as the EAR, depending on what you’re going to be exporting. ITAR stands for International Traffic in Arms Regulations, and EAR stands for Export Administration Regulations. The ITAR is an agency governed by the U.S. Department of State (DDTC,) and it is their responsibility to regulate defense-related items in regards to their sale, manufacturing of, and distribution. Many companies mistakenly believe that their articles aren’t subject to enforcement under the ITAR, but an item even remotely related to defense could be subject. This could include items used for imaging, satellites, and much more. It is certainly worth checking with the ITAR to determine if your product is considered defense-related before automatically assuming that it isn’t. Failing to comply with ITAR regulations could result in hefty fines and penalties, as well as loss of privileges and even possibly your business. The EAR is governed by the United States Department of Commerce, and they’re responsible for regulating all other shipments that aren’t defense-related. These items must be considered commercial, for dual-use purposes, information and technology. However, be sure that you understand that some items don’t fall under the regulations of the ITAR or the EAR, but there are still other agencies that the items might fall under, such as the FDA, USDA, NRC, among many others. It is your responsibility to ensure that you’re aware of which agencies your shipments fall under, so you can obtain the appropriate certificate.

Is Export Controlled the Same as ITAR?

Despite the many similarities, ITAR and EAR control export in different manners. For instance, if your item meets the criteria for being managed by the ITAR, then you won’t have to worry about it being managed by the EAR as well, and vice versa. While each agency has its own list of items that they’re responsible for managing, these lists are not exhaustive, which is why you must ensure that you make the necessary clarifications before proceeding with any shipments. The EAR manages items that are considered exclusively for the military, as well as those that have dual uses. Dual-use items simply means that an item can be used by both the military and civilians. Alternately, the ITAR regulates items that are exclusively for military use, as well as any defense related items, as these are riskier when it comes to national security. Many businesses just starting out in the export industry believe that the ITAR and EAR regulate only tangible items, but this is not true. Their lists also include certain services, software, and even technical data. As you can see, the regulations of the ITAR and EAR are not only very complicated and confusing, but they can be quite overwhelming, especially if you don’t have experience dealing with these agencies. Fortunately, there are experienced and reputable agencies like Kaiser & Johnson who can manage all your international and military shipments. Instead of stressing yourself out while trying to determine if you’re following all the necessary regulations of the ITAR as well as the EAR, including the completion of customs forms, the packaging of your items, and everything else involved in international shipments, Kaiser & Johnson can manage everything for you, from A to Z. There will then be no need to waste time trying to figure out the shipping process of your items, and you can focus on completing various other essential business duties.

Why is Export Compliance So Important?

When exporting commodities internationally, there are certain guidelines that your packages must comply with, and adhering to these guidelines is involved in the export compliance process. What exactly is export compliance? Export compliance is ensuring the adherence to certain laws and guidelines when sending off a shipment to an international location. Export Compliance is a requirement by the United States Department of Commerce developed to enforce the Export Administration Regulations (EAR) and regulate the export of “dual-use” goods or products that are utilized for commercial purposes, as well as for military uses.

Why Export Compliance is Vital?

The protocols involved in export compliance, which were launched in 1996, are extremely important for a number of reasons. It is absolutely essential that the United States as well as the foreign countries where you’re exporting packages be made aware of exactly what is contained in each shipment. National security and trade protection are the two main reasons for the creation and enforcement of export compliance. One reason why export compliance became a regulation is because of potentially dangerous shipments that were being shipped internationally, which could be perceived as weapons of mass destruction. This is why it’s necessary for you to complete many documents for custom purposes, including a packing list, Country of Origin form, SLI form (Shippers Letter of Instructions) and Commercial invoices are the most common documents required when exporting goods internationally. Failure to comply with the various laws and guidelines that have been set forth could result in your shipments being confiscated. You also face the possibility of being fined as much as $1,000,000 per violation. Corporations or individuals found to have purposely violated the laws may be fined up to $1,000,000 per violation or sentenced to up to ten years in prison. Depending on the circumstances, some violators may be simultaneously fined as much as $1,000,000 per violation and also imprisoned for failing to comply with export guidelines.

Regulations Surrounding Export Compliance

The Arms Export Controls Act (AECA) and the International Traffic in Arms Regulation (ITAR) are the agencies that enforce these laws. The Secretary of State may also opt to assess civil penalties for any individual or business found guilty of failure to comply with regulations, which may be as much as $500,000 for each violation. The civil penalties may be required either in addition to or in lieu of, any other fines, jail time, or penalties. While there are official export compliance programs available that can help companies minimize their risk of non-compliance when it comes to complying with the laws of export compliance, these programs aren’t a requirement in the United States. However, more and more corporations are recognizing the benefits of these programs, because all employees working with international exports need to be thoroughly trained to ensure that the company maintains its compliance at all times. One tiny error could cost a company a great deal of money, and possibly even more. 

Working with Shipping Agencies

Some companies are even opting to invest in the services of military and international shipping agencies that are able to expertly manage all of their international shipments, while simultaneously educating themselves and their employees on the importance of export compliance, as well as the specific guidelines. These shipping agencies have specific knowledge regarding the entire process of exporting, from A to Z. Kaiser & Johnson is a military and international shipping agency that would be more than happy to assist your company with all your shipping tasks, while ensuring that your company always remains in adherence to export compliance laws at all times. Kaiser & Johnson works with a team of freight forwarders that are custom compliance experts and can ship your products to many destinations around the world.

Contact Kaiser and Johnson Today

So, if you’d like to simplify your life when it comes to exporting items internationally, you should consider utilizing the services that we have Kaiser and Johnson. We have several decades of experience expertly managing the military and international shipments of thousands of businesses. Give us a call today at (314)664-6768 and we’ll provide you with a fair and fast estimate, so we can get started with exporting your shipments right away.