If you produce defense-related articles, Canada is the natural choice when you look to expand internationally. But do you need to comply with ITAR in order to export to Canada? In today’s blog, we give you all the information you need to know.
What Is ITAR?
The International Traffic in Arms Regulations (ITAR), is a regulatory regime that controls the manufacture, export, and distribution of defense and military-related articles as well as the furnishing of defense services as defined in the United States Munitions List, or USML.
ITAR is administered by the Directorate of Defense Trade Controls within the State Department.
The purpose of ITAR is to ensure that sensitive defense-related technologies and information do not fall into the wrong hands, including unauthorized individuals, organizations, or foreign governments. It regulates items on the USML, which includes various defense articles such as weapons, military vehicles, certain components, and associated technical data.
Under ITAR, companies and individuals involved in the manufacture, sale, or export of defense-related items must comply with specific licensing requirements. These requirements cover activities such as exporting, importing, brokering, and providing defense services to foreign entities.
ITAR compliance is crucial for companies operating in the defense industry, as violations can lead to severe penalties, including fines, imprisonment, and restrictions on future exports.
Do I Need ITAR To Export to Canada?
As we saw in a previous post, ITAR doesn’t apply uniformly to all countries.
And while the export of U.S. military-related items to some countries is subject to more stringent regulations, the opposite is true for Canada.
The ITAR includes a Canadian exemptions section (§126.5), which allows “the permanent and temporary export to Canada without a license of unclassified defense articles and defense services identified on the U.S. Munitions List” as long as the items are destined “for end-use in Canada by Canadian Federal or Provincial governmental authorities acting in an official capacity or by a Canadian-registered person, or for return to the United States.”
For ITAR purposes, the term “Canadian-registered person” includes the following subjects, provided that they are registered under Canada’s Controlled Goods Program in accordance with the Canadian Defense Production Act:
- Any Canadian national (including Canadian business entities)
- Dual citizens of Canada and a third country (except those listed in ITAR § 126.1)
- Permanent residents registered in Canada.
- Other Canadian Crown Corporations identified by the Department of State in a list of such persons publicly available through the Internet Web site of the Directorate of Defense Trade Controls and by other means.
Keep in mind that all the above applies to imports of unclassified defense articles and services to Canada.
More sensitive items as well as classified ITAR-controlled items or services still require a license.
Additionally, the Canada exemptions do not waive other ITAR requirements, including reporting and record-keeping.
Reexports
While the Canadian exemptions are straightforward enough, things change when it comes to reexports.
ITAR defines reexports as the shipment or transmission of a defense article from one foreign country to another foreign country.
In this case, reexports from Canada (that is, exporting defense-related articles to Canada for export to a third country) are not covered by the ITAR Canadian exemptions.
According to ITAR, “Reexport/retransfer in Canada to another end-user or end-use or from Canada to another destination, except the United States, must in all instances have the prior approval of the Directorate of Defense Trade Controls.”
As noted earlier, ITAR compliance is to be taken extremely seriously. If you need help making sense of ITAR regulations as they relate to exports to Canada or other countries, contact us today.
Our team of experts stands ready to answer your questions and ensure that you meet all your regulatory obligations and remain compliant.
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Whether it’s CMMC, NIST SP 800-171, DFARS, or ITAR, we help organizations achieve compliance with all applicable cybersecurity regulations at any level so that they can win and maintain Department of Defense (DoD) contracts.
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