What is ITAR Compliance, and Why is it Relevant to Your Organization?

The industry you work in determines the specific compliance regulations that you must follow, according to US government standards. One set of compliance regulations is ITAR: International Traffic in Arms Regulations. If your business deals in any way with the manufacture, sale, or distribution of defense or space-related items, you are subject to ITAR regulations.

What is ITAR?

ITAR governs space and defense-related items: rocket launchers, torpedoes, military hardware, and any plans, diagrams, photos, and documentation used to build and manufacture that gear.

The compliance regulations offer one simple governing principle: only US citizens can access any information or items from that list. While there are a variety of exemptions to that policy and practice, for the most part, any organization that deals with manufacturing, selling, or distributing those items, including large international companies that may have employees from many countries, must follow those regulations.

Creating an ITAR Compliance Program

Not only must your business have an ITAR compliance program in place that will help ensure that you can meet those regulations and protect sensitive data, but you must also have a specific, documented tracking, monitoring, and auditing program. This means you:

Protect Relevant Data

If your company deals with defense or space items or data, you need to protect that data so that only people within the United States, unless they fall into one of the exceptions and exemptions outlined by ITAR compliance regulations–including citizens of Canada, Australia, and the U.K., who may have the right to access that data based on its terms–you will need to make sure that you have a system in place that will protect that data and your employees. This may mean segmenting your internal system, allowing permission to access relevant information to only specific members of your team, and ensuring that you have both passwords and multi-factor authentication in place that will help protect your overall security.

Know Who Has Accessed Any Space or Defense-Related Data

If you have data in your system that relates to space or defense-related information, you must have regulations in place that will help you keep track of anyone who has accessed that information. Not only can you see whether anyone who is not supposed to have access to that information has tried to access it, or if a breach has occurred that may make that sensitive data available to people who are not US citizens or who are outside your organization, you can see what authorized individuals have accessed that information, which can help you or the US government hunt down any security leaks.

Monitor Space and Defense-Related Data Access

You may also want to know how often users have accessed that sensitive data–and have alerts in place that will notify you if that information is accessed more often than usual or if someone who has no reasonable reason to access that data decides to check it out. Regular monitoring can help you observe any unusual patterns and address potential security concerns as quickly as possible.

Audit Your Systems Regularly

Not only do you need to have those key checks and balances in place, but you may also need to monitor them often. Regular audits will help take a look at the potential for security breaches around that key data, examine what solutions you have put in place to protect it, and take a look at who has accessed that data in the recent past, which can provide you with more information that will help you address any concerns. You may need to conduct internal audits as well as work with an external auditor to ensure that you meet all relevant levels of ITAR compliance.

In addition, to set compliance regulations, you may need to carefully consider how you identify information. Noting that a specific page or document is protected by ITAR regulations can help prevent your employees from mistakenly sharing that data with someone outside your organization, which could lead to significant penalties.

What Happens if You Commit an ITAR Violation?

ITAR violations can have extreme consequences for your business.

Civil Penalties

If you have a civil violation–generally considered a violation committed by accident–your business can face up to $500,000 in fines per violation.

Criminal Penalties

A criminal ITAR violation includes deliberately sharing information with an enemy of the United States. It could mean up to $1 million in fines per violation or the potential for 10 years imprisonment per violation.

General Losses

In addition to the civil and criminal penalties associated with direct ITAR violations, your business may face a range of other challenges that could also impact the way you do business. These could include:

• Loss of the relevant contract: If you have a government contract, and the government realizes that you have not met relevant ITAR compliance standards, the government may choose to work with a competitor who can offer better overall compliance standards and more effectively protect that data, keeping it out of enemy hands. In many cases, especially in the case of deliberate failure to meet compliance standards, you may not have a second chance to bring your business into compliance.
• Loss of reputation: In addition to the loss of specific government contracts, following the discovery of your loss of compliance, you may lose a great deal of your reputation within the industry as a whole. In general, other businesses and even private clients prefer to trust a company that they know can adhere to necessary cybersecurity regulations. If you fail to adhere to ITAR compliance regulations, which could potentially place the company as a whole in jeopardy, clients who want a company to deal with their sensitive information may not want to trust you with that data.

ITAR compliance is a critical part of maintaining your military contracts or dealing with any defense or space-related data. If you need to set up ITAR compliance for the first time or to ensure that you have the right standards and safeguards in place, we can help. Contact us today to learn more about our security solutions and how they can help your business.