- Who's In Charge Anyway? The Commodity Jurisdiction ("CJ") Process
The CJ Process
Because ITAR controls are preemptive over EAR controls, it is always necessary to first determine if the specific article or technology to be exported is subject to ITAR jurisdiction before concluding that it falls within the scope of controls under the EAR.
The commodity jurisdiction process should be used if doubt exists as to whether an article or service is covered by the U.S. Munitions List. If an exporter cannot make a reasonable and documented determination on its own as to whether an article or technical data is subject to ITAR jurisdiction, it should request a Commodity Jurisdiction Determination from the Department of State and the Directorate of Defense Trade Controls. The process is described in section 120.4(c) of the ITAR.
Any request for a CJ is required under section 120.4(c) must include the following information:
Requests shall identify the article or service, and include a history of the product's design, development and use. Brochures, specifications and any other documentation related to the article or service shall be submitted in seven collated sets.
(d)(1) A determination that an article or service does not have predominant civil applications shall be made by the Department of State, ... on a case-by-case basis, taking into account:
(i) The number, variety and predominance of civil applications;
(ii) The nature, function and capability of the civil applications; and
(iii) The nature, function and capability of the military applications.
(d)(2) A determination that an article does not have the performance equivalent, defined by form, fit and function, to those used for civil applications shall be made by the Department of State, ... on a case-by-case basis, taking into account:
(i) The nature, function, and capability of the article;
(ii) Whether the components used in the defense article are identical to those components originally developed for civil use.
The Directorate of Defense Trade Controls will provide a preliminary response within ten working days of receipt of a complete request for Commodity Jurisdiction. If, after 45 days, the Directorate of Defense Trade Controls has not provided a final Commodity Jurisdiction determination, the applicant may request in writing to the Director, Center for Defense Trade, that this determination be given expedited processing.
State, Defense and Commerce resolve Commodity Jurisdiction disputes in accordance with established procedures. State shall notify Defense and Commerce of the initiation and conclusion of each case. A person may appeal a Commodity Jurisdiction determination by submitting a written request for reconsideration to the Director of the Center for Defense Trade. The Center for Defense Trade will provide a written response of the Director's determination within 30 days of receipt of the appeal.
Common questions regarding export control jurisdiction
Q1. Inexpensive products for which the U.S. manufacturer has no idea of the use, as the customer may not want to tell them.
A1. U.S. ITAR export controls are not based on the intended end use of the product after export. As a rule, to be subject to ITAR controls, the device must be specifically designed, modified, or manufactured for a military end use, and the device is not in normal commercial use.
The exporter, as the U.S. principal party in interest to the transaction, has the legal obligation to determine the control status of the information or device to be exported and to obtain the appropriate license, if required, or refrain from the shipment.
Likewise, U.S. EAR export controls are not based on a specific end use. Devices are controlled according to their functional parameters, and whether they are identified on the CCL as subject to a license requirement to the intended destination.
The U.S. exporter has a legal obligation to determine the control status of the information or device to be exported and to obtain the appropriate license, if required, or refrain from the shipment.
Q2. What about devices that are made and sold for both commercial and military applications?
A2. Again, U.S. ITAR export controls are not based on the any specific end use of the product after export. To be subject to ITAR controls, the device must be specifically designed, modified, configured, or manufactured for a military end use, and the device is not in normal commercial use. According to paragraph (c) of Category XI, USML, the part or component will only fall within the export control coverage of the end-item with which it is used if it is specifically designed or modified for use with that end-item, or is not in "normal commercial use."
The single most important question is "how, or in what way is the device specifically designed or modified for use with that end-item?" In many instances the slight fabrication differences for military marking and testing may be enough to subject the part to ITAR jurisdiction.
Q3. What should we do about Customer-submitted designs, drawings or specifications that are marked as ITAR controlled, but we need to transmit to our foreign manufacturing sites?
A3. By definition, to be controlled under the ITAR, the technical data must relate to a commodity that is controlled under the ITAR. If the commodity to be made is not ITAR controlled, then the technical data to make it is not controlled under the ITAR. However, in situations where the customer has identified a particular drawing or document as ITAR controlled, then there is a presumption that this is true, and you should treat it as ITAR controlled, unless you reasonably and reliably establish that the contrary is true, either through discussions with the customer or through a CJ request with DDTC.