Companies involved in Small Business Innovation Research (“SBIR”) and Small Business Technology Transfer (“STTR”) contracts often are subject to requirements under the International Traffic In Arms Regulations (“ITAR”) and the Export Administration Regulations (“EAR”) for products, technologies and software developed under their contracts.
These requirements frequently apply during the early stages in designing, developing and testing products and related software and technical data under these programs. In addition, as companies begin the all-important process of commercializing their products developed under the programs, it is critically important to identify the export jurisdiction and classification of the products – ie, if they are subject to ITAR and/or EAR and the legal requirements that will apply in the sales of the products. This is a fundamental step in bringing a product to the commercial marketplace – both you and your customers will want to know if the product is subject to export control restrictions for sales both in the U.S. and overseas.
In some cases the SBIR contract documents state if the item being developed is ITAR- or EAR-controlled. However if the contract is silent this does not mean that the items developed are not subject to these controls. Rather, it is up to the company developing the product to determine the ITAR and EAR requirements that will apply.
The stakes are high – violations of ITAR and EAR can result in penalties of up to $1 million in fines and 20 years imprisonment per violation.
Requirements that may apply under ITAR or EAR include the following:
While some of these requirements may apply in exporting products, many requirements may apply in purely domestic activities as well.
I have prepared a video tutorial that provides an overview of ITAR and EAR for companies involved in the SBIR and STTR programs. In this presentation I explain the basic requirements under ITAR and EAR as they apply to companies involved in SBIR and STTR activities, and steps to take to reduce potential legal liability. The video is available at the link below:
VIDEO TUTORIAL: ITAR and EAR Requirements in SBIR Programs
I hope you find this helpful in your work in the SBIR/STTR programs.
 Parties engaged in “brokering activities” as defined in ITAR §129.2(b) are also subject to registration, reporting and recordkeeping requirements under ITAR Part 129.
 ITAR §120.1(c)(2) provides as follows: Persons who have been convicted of violating the U.S. criminal statutes enumerated in §120.27, who have been debarred pursuant to part 127 or 128 of this subchapter, who are subject to indictment or are otherwise charged (e.g., charged by criminal information in lieu of indictment) with violating the U.S. criminal statutes enumerated in §120.27, who are ineligible to contract with or to receive a license or other form of authorization to import defense articles or defense services from any agency of the U.S. Government, who are ineligible to receive an export license or other approval from any other agency of the U.S. Government, or who are subject to a Department of State policy of denial, suspension, or revocation under §126.7(a) of this subchapter, are generally ineligible to be involved in activities regulated under the subchapter.
 In addition, if a person knows or has reason to know of a proposed, final or actual sale, export or other transfer of ITAR-controlled items involving the Section 126.1 Proscribed Countries they are required to immediately inform the Directorate of Defense Trade Controls of such event.