A manufacturer of defense articles was charged with violations of Arms Export Control Act (AECA) and the International Trade in Arms Regulations (ITAR) for having exported defense articles and furnished defense services without seeking authorization from DDTC, and failure to appoint a qualified Empowered Official.
We will focus on failing to appoint a qualified official, the emphasis being in bold letters to signify the importance of the qualifications of the empowered official. A defense articles’ manufacturer knows that it must appoint an Empowered Official empowered in writing to sign license applications and other approvals. It is of no surprise that the empowered official has to have “authority for policy and management within an organization.” (§ 120. 25(a)(1) see also § 120. 25(a)(2) ). More important, the empowered official must understand not only the export statutes and regulations but also the liabilities, both criminal and civil, and the administrative penalties for violations of AECA and ITAR. See, § 120. 25(a)(3). Generally, these are the requirements on what it means to be an Empowered Official, therefore, the mere act of giving an employee that title without more doesn’t make them so automatically.
At the company, the person working as an Empowered Official didn’t have the qualifications to fulfill that role. An employee is an employee and it is the company that must invest to train the employees for the roles it assigns them. Here, the company it seems to have only appointed the employee, however, the company had not offered the require training in export controls, so the staff worked by relying on personal knowledge and that of the customers, who often were foreign customers. A lot went wrong because of this oversight by the company: items were exported without a license and proper authorization for years. The end result were the violations of the AECA and ITAR and all that it implies.
Companies can avoid these mishaps if they get in the habit of asking questions early, understand your product, your customer, the regulations involved and following the letter of the law. It is a hassle to do it at the start, because I know companies see compliance as a cost, but it is less of a hassle than dealing with the enforcement agencies, the liabilities and penalties, plus other expenses a company has to make just to get through the mess. If within a company an employee bears the official title of the Empowered Official, ensure that the employee receives the training it needs to meet the qualifications demanded by the tasks it performs. *
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