Harm to U.S. commercial and academic interests There is an open debate between the
Department of State and the industries and academia regulated by ITAR concerning how harmful the regulatory restrictions are for
U.S.-
domiciled businesses and higher education institutions.
Academic work and the "Fundamental Research Exemption" Higher education institutions argue that ITAR prevents the best international students from studying and contributing in the United States, and prevents cooperation on certain types of international scientific projects. ITAR generally prohibits foreign persons from collaborating with US citizens on projects pertaining to items on the USML without export licensing, as such work can be construed to fall under one of the several enumerated definitions of "export," such as: •
"Disclosing (including oral or visual disclosure) or transferring technical data to a foreign person" •
"Performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the United States or abroad" Where the definition of "defense service" includes
"the furnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles." The ITAR specifies that the products of "fundamental research" are not considered controlled "technical data," so long as they are published freely. Fundamental research is defined as university-based
"basic and applied research in science and engineering where the resulting information is ordinarily published and shared broadly within the scientific community, as distinguished from research the results of which are restricted for proprietary reasons or specific U.S. Government access and dissemination controls." The need to make this distinction has led many U.S. research universities to adopt ITAR policies and compliance programs. These measures can vary widely; for example,
MIT states that "the intent of the ITAR is that research conducted on campus, without restrictions on publication or participation, is fundamental research from inception to publication as long as the intent is to publish the results," while
Stanford University maintains a more nuanced and restrictive approach to research involving defense articles. University interpretation and up-to-date understanding of export control regulations and willingness to seek opinions from the U.S. State Department affect the research that can be conducted on their campuses; for example, the University of Michigan successfully obtained an opinion from the Department of State stating that satellite development work on an (at the time) ITAR-controlled satellite being conducted by a student group containing both U.S. and non-U.S. citizens was considered fundamental research and was allowed to proceed. does not consider projects above
TRL 4 to be fundamental research, limiting the activities of laboratories and project-based groups on campus. This and similar policies are particularly damaging to international students studying aerospace engineering or related fields at U.S. universities, as opportunities to gain practical experience in their studies through internships are, due to licensing requirements, typically not offered to them at U.S. aerospace companies, and on-campus projects, when allowed, offer an alternate route for developing skills like those obtained through internships and co-op programs.
Effects on the U.S. space industry The Department of State insists that ITAR has limited effect and provides a security benefit to the nation that outweighs any impact that these sectors must bear. Every year, the Department of State can cite multiple arrests of ITAR violators by U.S. Immigration and Customs Enforcement agents and the
FBI. It is apparent that companies and institutions within the affected areas are somewhat stifled by ITAR regulations, in addition to the trade the U.S. economy would receive, and the science technology that it would share, notwithstanding that its restrictions encourage U.S. allies (such as Australia and the UK) to procure defense equipment from other sources that may not be interoperable with U.S. equipment. Companies argue that ITAR is a significant trade barrier that acts as a substantial negative subsidy, weakening U.S. industries' ability to compete. U.S. companies point to announcements in Europe by TAS (
Thales Alenia Space) promoting their "ITAR-free" telecommunication satellites. In 2008, officials at the Department of State dismissed the burden on industry and educational institutions as minor compared to the contributions to national security provided by ITAR. They also view the announcements of "ITAR-free" items as anecdotal and not systemic. • ITAR controls, as well as separate policy concerns, have hampered international cooperation in development of the
F-35 Lightning II multirole fighter aircraft. Both the British and the Australian governments demanded a guarantee that the U.S. will fully disclose technology needed for the JSF project before they would commit to further involvement in the project. • Concerns over connections between the
Boeing 787 and the
B-2 Spirit stealth bomber prompted
Boeing to take elaborate steps cleansing the commercial jet of any military technology. The issue arose when Boeing engineers, fearing indictment and penalties, refused to sign forms declaring that the 787 was "ITAR-free." As a result, Boeing conducted extensive research on the source of technology implemented on the 787. They removed all military technology and either found a commercial source for the same technology or replaced it with technology derived from non-military sources. • For the F-X2 program, the Brazilian government considered the French
Dassault Rafale over the
Boeing F/A-18E/F Super Hornet due to concerns over technology transfer barriers and ITAR regulations, regardless that the
Brazilian Air Force and the majority of their pilots preferred the Super Hornet over other bidders.
Nelson Jobim, Defense minister of Brazil, said: "the U.S. government could give no upfront guarantee and Brazil had seen a series of U.S. technology embargoes." The lucrative contract was for 36 aircraft and will be extended to over 100 units in the next decade. In December 2013, it was announced that the Swedish
Saab JAS 39 Gripen was selected, in a deal worth about $4.5 billion; Saab guaranteed the transfer of “all systems” as part of the deal, including software to ensure the Brazilian Air Force had the capability to customize the technology — and air force general
Juniti Saito stated “the intellectual property of this new fighter will be ours”.
Registration fees The U.S. Department of State charges back fees to manufacturers who have failed to register previously. Smaller exporters who may not have been aware of the requirement to register can potentially be charged crippling back fees when they first register. Allegations have been put to the U.S. Department of State-industry advisory group, the Defense Trade Advisory Group, that charging back fees discourages some manufacturers from registration. and • in 2006,
Embraer of Brazil was also prevented from selling
Super Tucano aircraft to Venezuela by the U.S. As a consequence of the blocking of these sales, Venezuela has subsequently purchased aircraft and other military hardware from Russia and Belarus. • In 2010 the will be using as much non-American equipment as possible, including technology from Canada, Sweden, Germany, the Netherlands and Israel. The ITAR have also been blamed for the delay of the
CH-148 Cyclone which is currently two years behind the original schedule. • In 2010 the
Sikorsky CH-148 Cyclone helicopter was faced with delays and restrictions. The first 19 of the 28 CH-148 Cyclones will be delivered in an interim standard which does not meet the original contract requirements.
Restrictions on dual and third country nationals The restrictions on access to USML items by dual and third country national employees of a foreign person can cause significant difficulties because the current accepted definitions of dual and third country nationals do not reflect the definition of "US persons". The Department of State defines dual and third country nationality as follows: • Third country national: an individual holding nationality from a country or countries other than the country of the foreign signatory to the agreement; and • Dual national: holds nationality from the country of a foreign signatory and one or more additional foreign countries. This means that a person who was born in the UK but is a U.S. permanent resident working in the U.S. for a U.S. company will be considered a U.S. person only (under the definition of "US person"). If, however, the same person emigrated to Canada, obtained
Canadian citizenship and commenced employment with a Canadian company, she would be treated as a Canadian-British dual national for the purposes of any U.S. export authorization to which her employer was a party. If she did not obtain Canadian citizenship but instead became a temporary or permanent Canadian resident, she would be treated as a British third country national for the purposes of such U.S. export authorization. and Australia).
ITAR and information technology The ease with which USML items can be exported and retransferred using computer networks and removable media significantly increases the risk of unauthorized retransfer of USML items. As discussed above, carrying a laptop computer which contains USML items overseas is considered a retransfer of those items. Likewise, access to USML items on corporate systems, such as intranets, by foreign persons overseas or in the U.S., is considered a Retransfer of the items. It is important to note that, in both cases, theoretical access to the USML items overseas or by foreign persons is sufficient to constitute a breach of ITAR. This also creates significant challenges for manufacturers of ITAR-related items with respect to hiring practices. Avoiding discrimination while screening applicants for their ability to access ITAR materials can often be an HR nightmare. After the
Space Shuttle Challenger disaster resulted in a growing backlog of commercial satellite launches, ITAR kept the Soviet Union out of the market. In September 1988, U.S. President
Ronald Reagan agreed to allow U.S. satellites to be launched on Chinese rockets. Communications satellites were gradually transferred from the State Department to the Commerce Department in 1992–1996, falling under the
Export Administration Regulations. After the failed launches of
Apstar 2 (1995) and
Intelsat 708 (1996), both on Chinese rockets, the
satellite insurance companies required the satellite manufacturers to work with China to investigate the failures. The Commerce Department determined that the "export" of information as part of the failure analysis complied with the export license. was placed in storage for a decade and finally launched on an
Ariane 5 rocket in 2008. ITAR has been blamed for "destroy[ing] an industry," reducing the market share of U.S. satellite makers by almost 25% from 1997 to 2007. However, the U.S. Department of State did not accept the ITAR-free status of these satellites and fined the US company Aeroflex $8 million for selling ITAR components. Thales Alenia was forced to discontinue its ITAR-free satellite line in 2013. In May 2014, the United States Department of State reclassified satellites and several related components so they will no longer be treated as munitions whose export is controlled by ITAR, but will be covered instead under the
Export Administration Regulations. Restrictions were loosened on 36 countries, strict controls remained on another 150 countries, and exports remained prohibited to 20 countries. An official at the
Bureau of Industry and Security emphasized that "no U.S.-origin content, regardless of significance, regardless of whether it’s incorporated into a foreign-made item, can go to China". Thales Alenia had long complained that "every satellite nut and bolt" was being classified as ITAR-restricted, and the
European Space Agency accused the United States of having no real interest in protecting U.S. satellite technology. ITAR remains a major concern in the European aerospace industry as of 2016. The
European Space Agency and the
Japanese Aerospace Exploration Agency have supplied components that were launched on Chinese rockets. European manufacturers of satellite components report that ITAR-free status is the first question they are asked by potential customers. Even U.S. companies have expressed interest in ITAR-free technology. == See also ==