Overview of US Export Control and Sanctions Laws and Regulations

• Author: Joelle Laszlo and Marques O. Peterson
• Pages: 61-85

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Chapter 5

Overview of US Export Control and Sanctions Laws and Regulations

Joelle Laszlo and Marques O. Peterson

I. Executive Summary

The United States maintains two primary export control regimes, which have a

substantial impact on many US government contractors. The first, which is applicable to most

military and intelligence-related items, is the International Traffic in Arms Regulations (ITAR)

administered by the Department of State. The second, which has applicability to dual-use and a

limited number of lower-level military items, is the Export Administration Regulations (EAR)

administered by the Department of Commerce. Niche export control regimes, maintained by the

US Department of Energy, the Nuclear Regulatory Commission, and the Food and Drug

Administration, are beyond the scope of this chapter. Both primary US export control regimes

impose a variety of restrictions on certain actions and activities, establish licensing requirements,

and prohibit certain exports and re-exports by US and foreign persons and companies. Penalties

for violations of the export control laws and regulations include administrative, civil, and

criminal fines, imprisonment, and denial of export privileges.

The United States also has an established economic and trade sanctions regime that

furthers US foreign policy and national security goals, as well as multilateral determinations of

the UN. The Office of Foreign Assets Control at the US Department of Treasury administers

these economic and trade sanctions against targeted foreign countries and regimes, terrorists,

international narcotics traffickers, those engaged in activities related to the proliferation of

weapons of mass destruction, and other threats to the national security, foreign policy, or

economy of the United States. Like export control laws, US economic and trade sanctions have

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broad applicability and prohibit or highly regulate certain transactions by US persons, US

companies and their foreign affiliates overseas, as well as in certain instances wholl y foreign

companies. Penalties for violations of economic sanctions laws and regulations can be

substantial.

This chapter provides an overview of export controls and economic sanctions laws and

regulations administered and enforced by the United States, recognizing that this is a fast-moving

area subject to frequent change, particularly in the economic sanctions arena.

II. US Primary Export Control Legal Regimes

A. US Export Controls on Military Goods and Technology

1. Activities Controlled under the ITAR

The ITAR restricts the export, re-export, and retransfer of “defense articles” and “defense

services.”1 In many (if not most) cases, under the ITAR a US entity seeking to export defense

articles, defense services, or technical data is required to obtain a license or other authorization

before the transaction and to maintain certain records associated with the transaction. ITAR

licenses and authorizations may not be possible for certain countries, as the United States

maintains arms embargoes or policies of denial with respect to a number of countries (and

nationals of those countries).2

The items subject to the ITAR’s controls are contained in the United States Munitions

List (USML). 3 The USML is a twenty-one category compilation of descriptive information

regarding certain “military” items (e.g., “Coast Guard Cutters,” “attack helicopters”) and other

items identified by their characteristics, functions, or being specifically designed, developed

modified, adapted, or configured for military purposes. (e.g., “fully automatic firearms to .50

caliber inclusive [12.7 mm],” “night vision or infrared cameras [e.g., camera core] specifically