Written by: Bianca Lindau

The defense industry has long been a lucrative industry throughout the world, particularly in the United States. In fact, the top 5 arms-producing and military services companies in the world are US companies.[1] The Department of Defense (DoD) contract obligations, payroll spending, and grant awards in the 50 states and the District of Columbia totaled $609.2 billion in Fiscal Year 2023, which is 2.2 percent of the country’s gross domestic product (GDP).[2] Companies are constantly developing new arms and military technologies with the aim of commercializing them. In a global economy, contractors for the large U.S. DoD industrial base will need to comply with import and export controls that are in place for defense articles. As such, this article provides an overview of the key U.S. import and export laws relevant to the defense industry.

Imports

When considering the import of defense articles into the US, it’s important to first distinguish between permanent imports and temporary ones. Permanent imports of defense articles into the US are regulated by the Attorney General under the direction of the Department of Justice’s Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). The International Traffic in Arms Regulations (ITAR) regulates temporary imports, that is, the bringing into the US from any foreign country any defense article that is either to be returned to the country from which it was shipped or taken or is in transit to another foreign destination. ITAR controls over temporary imports apply only to items on the U.S. Munitions List (USML), which is administered by the Directorate of Defense Trade Controls (DDTC). The USML is a list of 21 categories of articles, services, and related technology designated as defense and space-related by the United States federal government. The Attorney General under the direction of the ATF controls permanent imports of the defense items on the distinct but similarly named U.S. Munitions Import List (USMIL).

Generally, the permanent imports of defense articles enumerated on the USMIL require an ATF Form 6, Application and Permit for Importation of Firearms, Ammunition and Implements of War. The processing time is currently around 45 days.[3] The decision on whether an article is covered by the category is to be made by the DDTC, Department of State, with the concurrence of the DoD. Persons in the United States engaged in the business of importing defense articles enumerated on the USMIL must register by making an application on the ATF Form 4587, Application to Register as an Importer of U.S. Munitions Import List Articles. Processing of this application may take anywhere from two to six weeks.[4]

The process for acquiring a temporary import license under the ITAR (for items on the USML) differs depending on whether an item is classified or unclassified. The application form for unclassified items is Form DSP-61; and DSP-85 for classified items. The processing time for DSP-61 is around two months and around 60 to 120 days for the DSP-85 form. Registration for export/import activities subject to the ITAR is administered by the DDTC using Form DS-2032, which must be submitted through the electronic portal of the Defense Export Control and Compliance System. Typically, this form is processed within 30 days.

Exports

In the US, export controls are found in the International Traffic in Arms Regulations (ITAR) and the Export Administration Regulations (EAR).

ITAR’s primary objective is to prevent unauthorized access to US military technologies and safeguard national security while maintaining compliance with international agreements and defense collaborations. ITAR governs the manufacture, export, reexport, temporary import of defense articles, the furnishing of defense services, and brokering activities involving items described on the USML. These regulations outline the requirements for licenses or other authorizations for specific exports of defense articles (including technical data) and services. Exporters generally must submit a license application for any item that is included on the USML unless a specific license exemption applies. Separate and apart from ITAR licensing requirements, as stated above, all persons or entities that engage in the manufacture, export, or brokering of defense articles and services must be registered with DDTC.

The EAR regulates dual-use items, i.e., those that have both civilian and military applications, and is administered by the Commerce Department’s Bureau of Industry and Security (BIS). Additionally, the Office of Foreign Assets Control (OFAC) enforces economic sanctions and embargoes, restricting exports to certain countries, individuals, and entities. Further, the Nuclear Regulatory Commission (NRC) and Department of Energy (DOE) regulate nuclear-related exports.

Sometimes, a company may have difficulty determining which agency has jurisdiction over an item or transaction. This step is often referred to as the “commodity jurisdiction” determination. If doubt exists on whether an item is subject to the EAR or the ITAR, companies may submit Commodity Jurisdiction Requests (CJR) to DDTC to obtain a formal determination. The ITAR provides that exporters may submit requests to DDTC to obtain a determination on the proper jurisdiction of an item.

In practice, this means that any company wishing to import or export defense articles into or from the US should be familiar with the applicable regulations and governmental entities that administer these regulations.

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[1] Stockholm International Peace Research Institute, The SIPRI Top 100 arms-producing and military services companies in the world, 2023, sipri (Dec. 2024), https://www.sipri.org/visualizations/2024/sipri-top-100-arms-producing-and-military-services-companies-world-2023.

[2] U.S. Department of Defense, DOD Releases Report on Defense Spending by State in Fiscal Year 2023, U.S. Department of Defense (Oct. 15, 2024), https://www.defense.gov/News/Releases/Release/Article/3935678/dod-releases-report-on-defense-spending-by-state-in-fiscal-year-2023.

[3] Bureao of Alcohol, Tobacco, Firearms and Explosives, Current Processing Times, ATF (last updated Dec. 1, 2024),https://www.atf.gov/resource-center/current-processing-times.

[4] International Trade Compliance Institute, What are the requirements for importing gas masks and filters, tradecomplianceinstitute.org,https://tradecomplianceinstitute.org/p_show_faq_answers.php?id=857 (last visited Jan. 7, 2025).