So there’s a conflict somewhere where people in need are fighting for liberty, democracy, and human rights. They need basic military training. You’re an American veteran and a concerned citizen of the world who wants to help. You know how to teach them the skills they need, and the connections to go and make it happen. You’re willing to do it pro bono, for the cause. Time to get a plane ticket, pack a bag, and start training them, right?
Not so fast. For better or for worse, whether you’re working on your own, for a non-profit, or a private company, and whether or not you’re being compensated (or your employer is), you need to take care not to run afoul of the law, or you might end up on the receiving end of the wrong sort of attention from Uncle Sam. Compliance is a basic requirement for anyone involved in the export of defense articles or services, and there are certain laws and regulations you need to be aware of.
Before we go any further, an important disclaimer: while we have done our best to ensure this blog post is accurate, we make no guarantees; we at C2SI are not lawyers or experts in export-control law, and the following does not constitute legal advice; even if we were experts, compliance with these regulations is an extremely complicated and sensitive issue that can’t be covered in a blog post, so if you are seriously considering delivering any sort of defense articles or services overseas, seek professional legal/expert advice and/or contact the relevant authorities for assistance before doing so. Hopefully, however, this blog post will constitute a primer on some of the key regulations you need to be aware of.
The U.S. Export Control Regime: EAR, BIS, ITAR and DDTC
As this helpful International Trade Administration video explains, two primary bodies of law (and corresponding agencies) govern U.S. export licensing. The first is the Export Administration Regulation (EAR), administered by the Department of Commerce Bureau of Industry and Security (BIS). The EAR governs military and dual-use products and is based on the Commerce Control List. However, more relevant to those considering delivering military training overseas are the International Traffic in Arms Regulations, or ITAR, and the State Department office that administers it, the Directorate of Defense Trade Controls (DDTC).
The ITAR (Title 22, Chapter I, Subchapter M of the U.S. Code) is the regulatory regime that governs the export and import of defense articles and services by U.S. persons. The ITAR was established by the 1976 Arms Export Control Act (AECA), and “governs the manufacture, export, and temporary import of defense articles, the furnishing of defense services, and brokering activities involving items described on the USML,” according to the DDTC website. The USML is the U.S. Munitions List – the subsection of the ITAR that lists the categories of controlled goods and services, which includes any sort of military training. It also includes items that volunteer organizations have often provided to Ukrainian defenders, like night vision, thermal optics, and body armor.
The first step of ITAR compliance is understanding the regulation, which is available online, at the electronic Code of Federal Regulations. ITAR regulates, among other things, the provision of defense services, including training, which is covered under part 120, subpart C (120.32)(a)(3):
“Military training of foreign units and forces, regular and irregular, including formal or informal instruction of foreign persons in the United States or abroad or by correspondence courses, technical, educational, or information publications and media of all kinds, training aid, orientation, training exercise, and military advice.” Training is listed under the USML, at 121.1, Category IX – Military Training Equipment and Training, “(e) Technical Data and Defense Services, (3) Military training not directly related to defense articles or technical data enumerated in this subchapter.” So, if you are considering training of a plausibly military nature, it is likely covered under ITAR and requires registration and licensing for export.
And what does that consist of? Well, first off, an entity seeking to provide training or other defense services overseas needs to register with DDTC. This is a tiered fee for registration, which starts at $2,250 and requires annual renewal. Then, the entity needs to acquire a license to export the specific defense services being planned, which requires the entity to submit a proposed technical assistance agreement (TAA) with the foreign entity planning to receive the services. This carries an additional cost, and only when the license is granted can the entity execute its services (in this case, training) under the proposed TAA. Penalties for violations can be severe, and DDTC strongly advises an entity involved in the export of ITAR-controlled articles and services to implement a compliance program.
DDTC registration and ITAR compliance is a challenging and expensive endeavor, and lawyers and specialized consulting firms exist that can help with the process – once again, don’t take our word for it, consult with an expert if you need guidance. The primary challenge for small, mission-driven nonprofit entities – like C2SI – is the cost involved: in addition to the DDTC registration and licensing fees, legal or consulting fees can run into the thousands of dollars (C2SI is currently fundraising for registration and licensing). There is no question that the ITAR licensing system is necessary to control such sensitive articles and services – but the fee structure is designed for for-profit defense firms, and may be prohibitively expensive for nonprofit civil society groups with constrained resources. Given the value that such groups can add in supporting the defense of Ukraine, and in deterring future authoritarian aggression, this is an unfortunate barrier to entry.
Due diligence, know-your-customer, and sanctions compliance
An additional step for anyone wishing to deliver training overseas is due diligence / “knowing your customer” (DD/KYC). First and foremost, given the potential sensitivity of military-style training, there is an ethical and moral obligation to ensure any delivery of training to beneficiaries is conducted in a conflict-sensitive manner, which includes vetting the beneficiaries – put simply, you want to be careful you’re not training bad actors who might put the skills they’re learning from you to bad ends. While the concept of applying conflict sensitivity to military-style training is a critical topic we’ll address in a future blog post, there’s also a legal obligation to ensure you’re not delivering services to sanctioned individuals or countries. There are many sanctions regimes operated by the U.S., most implemented by the Treasury Department’s Office of Foreign Assets Control (OFAC).
First and foremost, there are country sanctions: the U.S. has broadly restricted trade with many countries, from sectoral sanctions banning trade in a given sector (e.g. the Russian defense industry – not that anyone reading this would be doing business with them!) to more-or-less total embargoes on trade with a given country (e.g. Iran and Syria; it may surprise some readers to learn that, despite its war of aggression against Ukraine, all trade with Russia is not banned, but that’s a whole topic in and of itself). The bottom line for those planning to deliver training is that they need to understand whether the jurisdiction they intend to deliver in is subject to broad country sanctions.
Another important tool maintained by OFAC is the Specially Designated Nationals and Blocked Persons (SDN) list, which is a regime of targeted sanctions against certain individuals and entities related to authoritarian regimes, crime, or terrorism. For a U.S. entity, transacting with a sanctioned individual, country or sector can have serious legal consequences so referencing these lists is critical – but the scale and complexity of U.S. sanctions regimes is daunting! Luckily, OFAC maintains a helpful sanctions search tool. However, to make things more confusing, Commerce maintains a separate Denied Persons List, and just because an entity is not on a list, doesn’t mean you’re clear to transact with them – U.S. sanctions regimes are porous and incomplete, and due diligence requires understanding a beneficiary’s relationships even if they are not under sanctions. If someone you train is not themselves sanctioned, but turns around and trains a sanctioned entity, there could be consequences.
In summary – with both DDTC / ITAR compliance and sanctions compliance, you shouldn’t just take our word for it – do your research, and seek professional expert / legal advice before considering delivering training to any potential beneficiary. The U.S. export regulation and sanctions regimes are complex and challenging to navigate, but hopefully, this blog post has given you a starting point.
