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News from Reeves & Dola, LLP
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RANGE DAYS AND U.S.
EXPORT CONTROLS
Planning a Range Day for customers or industry partners requires a lot of coordination. Of course, you want to ensure that your visitors have an enjoyable day full of demonstrations that showcase your products, and discussions that promote business opportunities and foster relationships. However, while making your plans, it is important not to overlook the laws and regulations that could potentially impact the event.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) may be one of the first U.S. Government Agency that comes to mind when considering which set of laws and regulations could impact activities during a Range Day. After all, ATF is in charge of regulating the transfer, possession, and transport of firearms and ammunition in interstate commerce pursuant to the Gun Control Act and the National Firearms Act. However, if you are hosting non-U.S. person visitors, the U.S. Department of State's International Traffic in Arms Regulations (22 C.F.R. Chapter I, Subchapter M, Parts 120-130) (ITAR) should also play a role in your planning. Specifically, a review of Range Day activities should be done prior to the event to determine whether an export may occur, and if so, whether a license will be required for that activity. In this article, we explore some considerations of U.S. export controls compliance that are pertinent in planning a successful Range Day with foreign person attendees.
THE BASICS
In order to determine whether an ITAR-controlled export may occur, you must first determine (1) whether the activity will involve a "defense article," "technical data," and/or a "defense service," and, if so (2) whether the activity meets the definition of "export" for ITAR purposes.
The ITAR defines "defense article" in 22 C.F.R. § 120.6 as any item or technical data designated on the U.S. Munitions List (USML) in 22 C.F.R. § 121.1. It is important to note that a defense article includes "forgings, castings, and other unfinished products, such as extrusions and machined bodies, that have reached a stage in manufacturing where they are clearly identifiable by mechanical properties, material composition, geometry, or function as defense articles." Firearms up to and including .50 caliber, except so-called non-combat shotguns, are controlled as a defense article because they are specifically enumerated in USML Category I - Firearms, Close Assault Weapons and Combat Shotguns. Of likely most relevance to activities during a Range Day are the following subcategories of USML Category I:
*(a) Nonautomatic and semi-automatic firearms to caliber .50 inclusive (12.7 mm).
*(b) Fully automatic firearms to .50 caliber inclusive (12.7 mm).
*(c) Firearms or other weapons (e.g. insurgency-counterinsurgency, close assault weapons systems) having a special military application regardless of caliber.
*(d) Combat shotguns. This includes any shotgun with a barrel length less than 18 inches.
*(e) Silencers, mufflers, sound and flash suppressors for the articles in (a) through (d) of this category and their specifically designed, modified or adapted components and parts.
USML Category I(i) also controls technical data and defense services directly related to the defense articles enumerated in Category I. The ITAR defines technical data in 22 C.F.R. § 120.10, in relevant part, as "information...which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of defense articles." [Emphasis added]. Technical data can take many forms, including blueprints, drawings, photographs, plans, or oral instructions. It is important to note that technical data does not include "information concerning general scientific, mathematical, or engineering principles commonly taught in schools, colleges, and universities, or information in the public domain as defined in § 120.11." Further, it does not include basic marketing information on function or purpose or general system descriptions of defense articles.
The ITAR defines defense services in 22 C.F.R. § 120.9 as "(1) the furnishing of assistance (including training) to foreign persons, whether in the United States or abroad in the design, development, engineering, manufacture, production, assembly, testing, repair, maintenance, modification, operation, demilitarization, destruction, processing or use of defense articles; (2) the furnishing to foreign persons of any technical data controlled under this subchapter (see §120.10), whether in the United States or abroad; or (3) Military training of foreign units and forces, regular and irregular, including formal or informal instruction of foreign persons in the United States or abroad or by correspondence courses, technical, educational, or information publications and media of all kinds, training aid, orientation, training exercise, and military advice." [Emphasis added].
WILL AN EXPORT OCCUR?
Since firearms are enumerated in USML Category I, the Range Day will, at the very least, involve a defense article, but what about an export? Section 120.17 of the ITAR defines the term "export", in relevant part, as:
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(1) an actual shipment or transmission out of the United States, including the sending or taking of a defense article out of the United States in any manner; (2) releasing or otherwise transferring technical data to a foreign person in the United States (a "deemed export");...(4) releasing or otherwise transferring a defense article to an embassy or to any of its agencies or subdivisions, such as a diplomatic mission or consulate, in the United States; (5) performing a defense service on behalf of, or for the benefit of, a foreign person, whether in the United States or abroad..." It is important to note that § 120.17(b) instructs that "any release in the United States of technical data to a foreign person is deemed to be an export to all countries in which the foreign person has held or holds citizenship or holds permanent residency."
So, is allowing a foreign person visitor to handle a firearm during a Range Day an export? The short answer is "no." Simply allowing a foreign person visitor to handle a firearm under close supervision during a Range Day (e.g., allowing the visitor to fire a firearm at a gun range) does not constitute an export of the firearm, presuming title to the item is not transferring. However, there may be applicable restrictions under the Gun Control Act and ATF regulations at 27 C.F.R. Pt. 478, such as the prohibitions on possession of a firearm or ammunition by certain persons identified in § 478.32. We will address such ATF prohibitions in a separate alert.
What about allowing a foreign person visitor to watch a demonstration, or engage in discussions regarding the firearms that are being handled during the day? Generally speaking, keeping discussions to basic marketing information on the function or purpose, or general system descriptions of the firearms being handled likely would not constitute an export of technical data or the provision of a defense service. Similarly, simply observing someone fire a weapon would not constitute an export of technical data or provision of defense service either.
However, this can often be a slippery slope. A conversation that begins with a basic marketing pitch could very easily evolve into a discussion that transfers technical data or provides a defense service to the foreign person visitor. For example, during the Range Day, the foreign visitor asks detailed questions about the design of the particular firearm or requests instruction on how to use the particular firearm in a certain tactical situation. Answering such inquiries may require providing the foreign visitor with information that goes beyond basic function or purpose, or general system descriptions, and may require export authorization.
HOW TO ADDRESS POTENTIAL EXPORTS
It is essential to ensure that company export compliance personnel are involved early and often during the planning of a Range Day. Discussions between compliance personnel and employees hosting the event should occur to clarify the scope of activities in order to determine whether export authorization is needed. A good way to protect against potential exports of technical data during the Range Day is to properly train staff attending the event. Providing a briefing to employees prior to the Range Day, which reminds attendees of what they are and are not allowed to discuss is a great way to raise awareness. This would include ensuring foreign visitors do not access areas of the facility that may be restricted. Identifying potential regulatory compliance concerns before they happen will go a long way to having a smooth day.
We will cover this topic, including the applicable ATF regulations, as part of our Wednesday Webinar Series in 2018. Stay tuned for more information on the date and how to register.
The above alert is for informational purposes only and is not intended to be construed or used as legal advice. Receipt of this alert does not establish, in and of itself, an attorney-client relationship.
Questions about this alert can be directed to:
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About Reeves & Dola
Reeves & Dola is a Washington, DC law firm that specializes in helping clients navigate the highly regulated and complex world of manufacturing, sales and international trade of defense and commercial products. We have a deep understanding of the Federal regulatory process, and use our expertise in working with a variety of Federal agencies to assist our clients with their transactional and regulatory needs.
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