Prepared by Rich Schulman, Vice President of Quality and ITAR Technology Control Officer and Gerry St. Jean Manager Audit and Training.As 2013 unfolds, Columbia Tech finds itself preparing to apply for its 5th year of ITAR registration from the Department of State.  This article covers the product Export Classification Number (ECCN) and what is needed to screen an ITAR/EAR order prior to shipment.

As a contract manufacturer, Columbia Tech does not design products. Our customers are responsible for the design and control of their own products and, as such, are responsible for understanding and communicating any controls identified within the ECCN to us. Securing our customer’s ECCN as soon as the quote process begins is a priority; building product without knowledge of the applicable restrictions can land a contract manufacturer, like Columbia Tech, into export “hot water”.  If proper due diligence is not performed on the ECCN requirements and restrictions prior to beginning of manufacture, we risk “exporting” technology without the product even leaving the U.S., let alone during the shipping process.

What’s important to know?

We are required by ITAR / EAR regulations, prior to export of our customer’s products, to identify whether the shipment is heading to an entity / party or destination listed on either the Denied Parties or Denied Destinations Lists. Remember, the shipper, as the last to have hands on the product, plays a critical role in preventing a shipment from falling into the wrong hands.

Using “Global Wizard”, a software package that we license, Columbia Tech confirms whether or not the party expecting to receive the goods is identified as an entity on the Denied Parties List.  The software is routinely updated multiple times a day by governmental agencies, so we are assured that any exported shipment is going only to “approved” parties. We check this list minimally two times during our process, once during the quote phase and again within a day of shipment so that we are confident in our decision to move forward by completing the shipment process.

We must also have a solid understanding of where each product is going to finally end up – the “final destination”. The U.S. has differing export agreements with just about every country in the world and Columbia Tech, as the shipper, needs to adhere to the specific requirements identified within the classification for each product. The customer is responsible for understanding and communicating the controls associated with their product and we, as the shipper having “last hands” on the product, are equally as responsible for executing shipping controls.

Once again, we turn to Global Wizard to verify that the final destination of the shipment is not listed on the Denied Destination List. Once completed we analyze the ECCN description in the Commerce Control list on the US Government website  to determine if there are any export restrictions associated with the destination country and the product shipping. Typical codes for which we need to be aware: Antiterrorism (AT), or National Security (NS) which indicate that the product, should it fall into the wrong hands, poses a potential risk for being used in an act of terrorism or that the national security of the U.S. could be compromised.

What happens if we don’t have an ECCN?

As noted earlier, the customer is responsible for understanding and communicating the controls necessary for the export of the product. But what do we do if the customer has not yet qualified their technology or has not, or cannot, provide the ECCN to us? It is a problem that we continue to address at Columbia Tech, although much less frequently now as customers export regularly and companies become more familiar with associated regulations.  We make multiple attempts to ascertain an ECCN, but usually the lack of response from the customer is because they are not aware of the process.   Since we are required by regulations to identify the ECCN of every shipment leaving our docks, if our customer has not been able to provide the information we will proceed forward by classifying the product ourselves with the aid of an export consultant.

Should our research indicate that heightened export restrictions exist on the product, additional work must take place to possibly secure and process an export license. This can usually be obtained within 2 weeks and provides the necessary one time permission to ship a specific product to a specific customer located in a specific country.

We always make sure the customer is aware of the classification or license requirements so that they are fully informed of the determination and are then able to make the final decision as to how to handle the exportation. After all, Columbia Tech is being paid to ship the product, and the customer, as the controlling agent, share and accept responsibility for the exporting product and technology. We are very careful that we continually meet the requirements set by our government while satisfying our customers’ requirements at the same time.