1. Busting Myths About DDTC
Registration
Ohio Aerospace Institute Industry Roundtable
September 21, 2012
Law Offices of Jon P. Yormick Co. LPA
An International Law Practice
Attorney Advertising

2. Disclaimer
• The information provided is believed to be accurate
as of the date of the presentation, but is subject to
change without notice.
• This presentation is designed for informational
purposes only and is not intended to be, nor should
it be deemed, specific legal advice. If such advice
is required, please consult with qualified legal
counsel.

3. Common Questions
• What is this DDTC?
Ever hear of ITAR…
• Why register?
– Business opportunities
– Compliance
– IT’S THE LAW!

4. Key Terms (cont’d)
• Defense article – 22 CFR 120.6
– item or technical data designated in the U.S. Munitions List (USML)
• Defense service – 22 CFR 120.9
1. Providing assistance to foreign persons (in U.S. or abroad) in the:
design, development, engineering, manufacture, production,
assembly, testing, repair, maintenance, modification, operation,
demilitarization, destruction, processing or use of defense articles
2. Furnishing to foreign persons technical data controlled under the
USML

5. Key Terms (cont’d)
• Technical data – 22 CFR 120.10
1. Information required for design, development, production, manufacture,
assembly, operation, repair, testing, maintenance or modification of
defense articles.
Blueprints, drawings, photos/videos, plans, instructions or
documentation
2. Classified information relating to defense articles and defense services
Does NOT include scientific, math or engineering principles taught in
schools, information in the public domain, or basic marketing

6. Fact or Myth #1?
Only Large Companies [e.g., multinationals, primes]
Need to Worry About ITAR and DDTC Registration
• “It can’t happen to me.”
• ITAR and DDTC registration do not discriminate
• No SME exception/exemption

7. Registration Requirements – 22 CFR 122.1
• (a) Any person who engages in the United States in the business of …
“Person” – natural person, corporation, business association,
partnership…or any other entity, organization or group, including
governmental entities.” (22 CFR 120.14)
• (b) Exemptions
(1) USG officers/employees acting in official capacity;
(2) Pertinent business activity confined to production of unclassified
technical data only
(3) Atomic Energy Act applies to manufacturing and exporting
actitivities
(4) Fabricate articles for experimental/scientific purposes only

8. Only Large Companies [e.g., multinationals, primes]
Need to Worry About ITAR and DDTC Registration

9. Fact or Myth #2?
Our items/technical data are commercial, not military, and/or
we do not sell to the military so we do not need to register
• USML is broad
• Cat. I - Firearms, Close Assault Weapons and Combat Shotguns
• Cat. II – Guns and Armament
• Cat. III - Ammunition/Ordnance
• Cat. IV - Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets,
Torpedoes, Bombs, and Mines
• Cat. V - Explosives and Energetic Materials, Propellants, Incendiary Agents,
and their Constituents
• Cat. VI - Vessels of War and Special Naval Equipment
• Cat. VII -Tanks and Military Vehicles
• Cat. VIII - Aircraft and Associated Equipment
• Cat. IX -Military Training Equipment
• Cat. X - Protective Personnel Equipment

10. Fact or Myth #2?
(con’t)
• Cat. XI. - Military Electronics
• Cat. XII - Fire Control, Range Finder, Optical and Guidance
and Control Equipment
• Cat. XIII - Auxiliary Military Equipment
• Cat. XIV - Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated
Equipment
• Cat. XV - Spacecraft Systems and Associated Equipment
• Cat. XVI - Nuclear Weapons, Design and Testing Related Items
• Cat. XVII - Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated
• Cat. XVIII - Directed Energy Weapons
• Cat. XIX - [Reserved]
• Cat. XX - Submersible Vessels, Oceanographic and Associated Equipment
• Cat. XXI - Miscellaneous Articles

11. Is it that easy to decide jurisdiction?
• Consider variants, modifications, alterations – ITAR
“creep”
– Adding a NAVAIR coupling = ITAR
• November 2011 - DDTC removed chemical toilets
manufactured by MAG Aerospace Industries for use in
military aircraft. The toilet in question was initially
manufactured for the Lockheed C-130 and was
subsequently modified for other military aircraft.

12. Commodity Jurisdiction Request – 22 CFR 120.4
• When doubt exists or remove article/service from USML
• Some Factors:
– Number, variety, and predominance of civil applications
– Nature, function and capability of civil/military
applications
– Form, fit, and function
– Significant military or intelligence applications
– Intended use after export “is not relevant” – 22 CFR
120.3(b)

13. Fact or Myth #3?
We do not export our items/technical data, we sell it only in US
• (a) Any person who engages in the United States in the
business of …
either manufacturing or exporting defense articles or
furnishing defense services…
“Manufacturers who do not engage in exporting must
nevertheless register.”
22 CFR 122.1

14. Fact or Myth #4?
We only expect to manufacture/export a special order once
• One-time event = DDTC registration
• (a) …manufacturing or exporting defense articles
or furnishing defense services requires only one
occasion of manufacturing or exporting …

15. Fact or Myth #5?
We registered years ago and we are all set, right?
• Annual renewal
• Lapse – back fees plus registration fee
• Lapse Registration Certificate

16. Registration Package
• DS-2032 Statement of Registration
• Certificate of Incorporation, Articles of Organization
(LLC), Certificate of Good Standing or Articles, etc.
• Payment of Fees
• $2,250 (first time, brokers, renewals without licenses)
• $2,750 (renewals with 10 or fewer licenses)
• $2,750 + ($250 x # of licenses over 10)
• Exception: high number of low value licenses

17. Once Registered – Compliance Obligations
• Naming Empowered Official(s)
• Policy Manual
• Organizational Charts
• Management Letter
• Internal processes and controls for:
» Identifying and controlling ITAR items and data
» Obtaining licenses
» Screening buyers and identifying “deemed exports”
• Training
• Recordkeeping

18. “Deemed” Exports
§ 120.17 Export
(a) Export means:
....
(4) Disclosing (including oral or visual disclosure) or transferring technical
data to a foreign person, whether in the United States or abroad; or
(5) Performing a defense service on behalf of, or for the benefit of, a
foreign person, whether in the United States or abroad.
§ 120.16 Foreign Person
Foreign person means any natural person who is not a lawful permanent
resident . . . .

19. Fact or Myth #6
Registration = Certification?
• Avoid the PR pitfall…
And being publicly mocked by export
control lawyers!