Feb
5
Breaking News from the Registration Front
Posted by Clif Burns at 4:26 pm on February 5, 2010
Category: DDTC
The biggest news today was the announcement by the Bureau of Industry and Security (“BIS”) of a U.K. company’s agreement to pay a $15 million fine, the largest fine ever collected by BIS. I’ll write about that when the charging and settlement documents are released.
In the meantime, however, I want to share with you a bumper crop of company press releases over the past few days announcing registration under Part 122 of the International Traffic in Arms Regulations. And, as always, these press releases are a never-ending source of amusement.
New-Hampshire-based Ion Beam Milling’s announcement perpetuates the myth that ITAR registration represents some kind of certification by the Directorate of Defense Trade Controls (“DDTC”):
Upon verification of a company’s ITAR compliance, an ITAR Registration Code is assigned and certifies the company’s clearance to work in conjunction with the US military and its counterparts.
Ion Beam also wins the award for the most original spin ever on ITAR registration:
ITAR Registration enhances Ion Beam Milling’s existing Intellectual Property and Document control policies.
A free subscription to this blog will be awarded to any reader who figures out just what the heck this means.
California-based Lenthor Engineering scores a first by issuing a press release announcing that it has renewed its registration. I can just imagine someone in the company saying that they’ve paid $2,250 and will be darned if they’re going to let that money go to waste.  Don’t be surprised if Lenthor announces next week that the company added another copy of the Pocket ITAR to the company’s library.
Munich-based computer hardware manufacturer Kontron AG’s announcement notes that the company
has registered and is in compliance with International Traffic in Arms Regulations (ITAR) administered by the United States Department of State Directorate of Defense Trade Controls who [sic] controls the export and import of defense articles and services.
Obviously Kontron didn’t have to take the legendary DDTC certification test or it would have known that DDTC only controls temporary imports of defense articles.
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5 Comments:
Clif,
This is very informative. I look forward to reading your blog when the settlement documents are posted. Thanks again.
Peter Quinter
Dear Clif:
Here’s the link to the actual 7-page Balli’s settlement agreement –>
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Click here
Regards<
Kelly
While making a false statement alone, without more, is not actionable, and might even have some glimmer of First Amendment protection, to the extent these false statements are made in order to solicit either sales or investment, they are violations of the mail and/or wire fraud acts, which if made more than twice could serve as predicate offenses for RICO, and which fail to survive the Central Hudson test for First Amendment protection of commercial speech.
While these companies do seem to be confused as to what DDTC registration confers and what it doesn’t, I applaud them for mentioning publically that they are registered. I advocate to my client companies to promote their registration with DDTC because many have used it as a selling tool to both primes in the US and defense companies/agencies overseas. While we are all eagerly awaiting changes in the export control regulations, we can’t hold our breath until it happens. We need to continue expanding our sales. Thus, marketing your ability to comply with these regulations is certainly worthwhile. My only advise is to ensure you are making accurate statements.
A colleague of mine recently pointed out this post to me in which you attempt to poke fun at the ITAR registration press release that my company issued last month.
As attorneys, I’m quite frankly amazed at your inability to understand the nuances of the language used in the press release. If you go back and re-read the passage more carefully, you will note that we are not claiming that the Directorate of Trade Controls has certified that we will always be compliant with ITAR, but rather simply that they have certified that we are now cleared to handle materials that fall under the ITAR regulation.
Some of our customers are defense contractors and could not subcontract certain work to us until we had obtained our ITAR registration. While perhaps “certify” was not necessarily the best word, I can assure your that I understand the compliance landscape seeing as I have been involved in IT Audit and Security since beginning my career with a Big Four Accounting firm nearly two decades ago.
As for our “most original spin”, let me try to explain it to you. As you may know, ITAR proscribes a control regime with respect to documents and other materials that are classified as munitions or other controlled articles. To maintain compliance with ITAR, we are simply noting the fact that we have enhanced our existing controls over customer IP above and beyond what we have already been doing.
Terribly sorry if our press release was too confusing. If you have any other questions, I’ll be happy to try and answer them.
