Published in the Daily Bugle, October 27, 2023
Last week’s column may have dashed hopes and dreams for some aspects of the Specially Designed (b)(3) release. The details of Specially Designed may taketh away, but can also bountifully giveth. What if I told you that if you follow the right steps, there are implementable circumstances where you can self-release an item from a Specially Designed catch-all? That you don’t need DDTC or BIS approval, you don’t need exhaustive design intent documentation, and that it’s actually a Feature and not a Bug?[1]
To be clear, paragraph (b) only releases software, parts, components, accessories, and attachments. It does not apply to materials or end-items, so paragraph (b), including (b)(3) and this One Weird Trick won’t work on an end item. That aircraft carrier is stuck in the ITAR.
Take a simple hypothetical – The XI(a)(3) BlastFire 3000[2] radar system includes a video driver card. The card was designed specifically for the BF3K, and used nowhere else. As it is a “component” used “in or with” an XI category item, and the layout is specific to said item, it’s snared in our favorite catch-all XI(c)(2) as a populated printed circuit assembly (PCB).
Marketing tells Engineering they just secured a contract for a new commercial flight simulator and deliveries start in six months. Using existing hardware will make the impossible deadline merely improbable, so Engineering asks Global Trade[3] if they can use the ITAR video driver card.
The good news is the answer is Yes, as long as Engineering can deal with certain restrictions during the development phase. They need to treat the card (and associated technical data) as ITAR until the simulator reaches production, which means either doing the work entirely in the US with US persons, or possibly getting the appropriate DSP-5 for non-US employees or agreements with partners.
Installing an ITAR card into an EAR simulator does not make the whole simulator ITAR. Technical data for the rest of the simulator remains EAR-controlled; you could involve non-U.S. persons/entities with the rest of the simulator development, just keep the video card and associated technical data limited to U.S. persons during the development/integration phase.
Once the simulator enters serial production, the video card (and the little PCB, too!) meet the requirements of (b)(3), and the card drops from the ITAR to EAR99. The technical data also exits the ITAR. For this example we’ve gone with strict re-use of an item, dodging the issues with “equivalent” form and fit, but assuming you meet those requirements, the trick still works. This also works for upgrading an existing simulator with the new card; the card remains ITAR during development, but once part of the production bill of materials, it becomes EAR. While the threshold of “in production” can be fuzzy, it’s in “production” if the design is frozen and it’s ready to be made in quantity.[4] Now, that quantity could be thousands, or it could be just a few, or even just one. Sales volume is not a sign of being in “production.
The ITAR to EAR99 leap is the most extreme example, but it also works with 600 series to AT-only controls, and depending on the item and destination, use of license exception STA opens up additional non-U.S. person resources without having to ask permission.
Not to say that getting an authorization is to be avoided, but anytime you ask a question, you have to be ready for the answer, and the answer may be No. A good business approach is one that avoids waiting 3 to 9 months to find out if you have an abrupt course change. The reaction to this seems to be split evenly between “cool trick” and “don’t you have to tell State won’t State be mad?” I can’t speak to making State mad [5] but you don’t need to inform or ask permission, any more than when you self-determine any J&C.
This comes back to this being a feature, not a bug. It’s not some unintended consequence of Specially Designed, but Yet Another release valve. ECR charged the Agencies with identifying critical items and letting the lesser ones be controlled at a lower level (even if only for AT.). Due to the understandably reasonable fear of letting something critical fall to a lesser control, a number of entries included a catch-all, because it was impossible to define all the critical components. This was done with the knowledge that there were a number of releases, not the least of which is (b)(1) “Ask Mommy.” This aspect of (b)(3) serves as yet another test – if the part or component in question works equally well in a purely commercial application, then likely it’s not uniquely military critical. The only temporal aspect is that the item isn’t released until the higher assembly enters production.
To be clear, this approach is not effortless, and comes with serious restrictions. But that’s part and parcel of export compliance. It’s important to examine our assumptions (“that’s not possible!”) and come up with ways to get to Yes. The job is to Get Business Done, legally and compliantly. And heck, it might even make Marketing happy[6].
Got comments other oddities to discuss, or J&C questions? – please reach out to me at ArtOfJC@arinovis.com. This one should stir up a little fuss, and we can let it play out in the Bugle.
[1] Act Now and we’ll throw in a second set of steak knives!
[2] The Models 1000 and 2000 were unfortunately true to their name, and ended up in Cat V. The 3000 series so far has been blissfully combustion-free.
[3] At 4:30 on a Friday, with the first Executive Review the following Monday
[4] The ITAR’s recent adoption of the EAR definitions of “development” and “production” are actually helpful here.
[5] I suspect we don’t give State enough credit.
[6] But we don’t like to encourage them.