1. Trade shows are exports waiting to happen.
Many defense contractors do not consider trade shows in the U.S. to be a vulnerability from an export compliance standpoint. Most trade shows, though, are open to foreign persons and U.S. persons alike.
There is a high likelihood that activity that would not otherwise constitute an export in a room full of U.S. persons will in fact constitute an export at a trade show, where foreign persons are free to observe your presentations, read your materials, and examine your products.
2. Map out your licensing strategy in advance.
If you are participating in a trade show and intend to simply provide “basic marketing information,” as such term is defined in Section 120.10(b) of the International Traffic in Arms Regulations (“ITAR”), then an export license will not be required. However, if you intend to provide any information that constitutes “technical data,” as defined in Section 120.10(a) of the ITAR, then you will need to secure a DSP-5 “marketing license” in advance.
Make sure to budget for the time it takes to prepare and submit the license application and for the likely duration of the application review by the Directorate of Defense Trade Controls and other U.S. Government stakeholders.
3. Train your business development personnel.
The objective of your business development personnel at trade shows is to sell your products and/or services and you absolutely want to position them to do so. It is crucial, though, that they understand what they can and cannot share with attendees. That is, they should be aware of the line between basic marketing information and technical data, which can just as easily be “exported” to a foreign person during a discussion or an informal pitch as it can in paper materials.
4. Account for temporary exports.
In addition to technical data, many defense contractors take their hardware to trade shows for the purposes of highlighting their capabilities. However, even if you return to the U.S. from a foreign trade show with all of your hardware, the shipment of such hardware constitutes, in and of itself, a temporary export for which a DSP-73 temporary export license is required (assuming none of the exceptions in Section 123.16 of the ITAR apply).
5. Be wary of demos.
Trade shows are an ideal opportunity to provide demonstrations of your products. A visual demonstration of a defense article for a foreign person, though, can constitute an “export” if it does more than simply (a) provide a general system description or (b) information on the function or purpose of the product.
About the Authors
Downrange authors Jennifer S. Huber and Adam Munitz are Partners in FH+H's International Trade & Transactions Practice. Focusing primarily on the defense, security, and intelligence sectors, Jennifer and Adam help businesses translate their domestic successes into overseas growth and assist foreign entities with sensitive investments in, and acquisitions of, U.S. businesses.
Additional information regarding their capabilities and previous representations can be found here.
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