Presentation Title Goes Here Export Compliance Training –Sales September 13, 2011 Presentation Title Goes Here

Export Terminology Export – Transfer of an item (or in some cases information) to a foreign national who is not a permanent legal resident of the USA ITAR – Dept of State International Traffic in Arms Regulations The Munitions List EAR – Dept of Commerce Export Administration Regulations ECCN – Export Control Classification Number (reason for EAR control)

Do I need an Export License? YES If the item is on the Dept of State ITAR Munitions List, or might be on the ITAR list If any export of the item is to a banned or restricted party If the end use is restricted MAYBE If the item is controlled on the Dept of Commerce EAR lists with some exceptions for Group B Countries, Limited Value, Temporary Exports, etc.

Overview Knowing your customer Transaction Red Flags Restricted Uses Export License Application Requirements– Dept of State vs. Dept of Commerce Export Items Requiring OCC Management Approvals TFOCA II Connectors/Assemblies, Rad-Hard Fiber/Cable, Military Reels

Knowing your Customer is Not an Option! KNOW WHO YOU ARE QUOTING OR SELLING TO! KNOW WHO THE END USER IS! KNOW WHAT THE END USE IS! IN OTHER WORDS, KNOW YOUR CUSTOMER!

RESTRICTED PARTIES SCREENING ALL CUSTOMERS (Quotes and orders) NEED TO BE CHECKED TO MAKE SURE THAT THEY DO NOT APPEAR ON ANY RESTRICTED PARTIES SCREENING LIST. IT DOESN’T MATTER WHAT TYPE OF PRODUCT YOU ARE SELLING TO THEM. IF THE CUSTOMER APPEARS ON ANY OF THESE LISTS, AN EXPORT LICENSE IF REQUIRED.

RESTRICTED PARTY SCREENING (CONT’D) To have customer screening done Send e-mail to Production Support Lead and Financial Compliance Manager Include Name of Company, Contact Name, Address, Country and product being quoted or sold. It is Sales responsibility to ask for customer screening checks for all previously unscreened parties!

Transaction RED FLAGS! The customer is vague, evasive or inconsistent to offer information about itself, the address, business purpose officer information or end use. The customer or its address is similar to one of the parties found in the Restricted Party Screening or is known to have or is suspected of having dealings with embargoed countries or the transaction involves a party on the Unverified List published by BIS in the Federal Register. - The customer gives different spellings of its name for different shipments, which can suggest that the customer is disguising its identity and/or the nature and extent of its procurement activities.

RED FLAGS! -The customer is willing to pay cash for a very expensive item when the terms of sale would normally call for financing. -The customer has little or no background in the relevant business. The product’s capabilities do not fit the buyer’s line of business or level of technical sophistication. -The customer is unfamiliar with the product’s performance characteristics but still wants the product. -Installation, testing, training or maintenance services are declined by the customer, even when these services are included in the sale price or ordinarily requested for the item involved.

RED FLAGS! -Terms of delivery, such as date, location and consignee are vague or unexpectedly changed, or delivery is planned for an out-of-the-way destination. -The ultimate consignee is a freight forwarding firm, a trading company, a shipping company or a bank, also the end-user is not otherwise identified. -The shipping route is abnormal for the product and destination. -Packaging is inconsistent with the stated method of shipment or destination.

RED FLAGS! -When questioned, the buyer is evasive and especially unclear about whether the purchased product is for domestic use, for export, or for re-export. -The customer provides information or documentation related to the transaction that you suspect if false, or requests that you provide documentation that you suspect is false. If you can say YES to any of the RED FLAGS, OCC may need to apply for an export license.

Restricted Uses If an item controlled by the EAR is to be used in activities related to nuclear, chemical, or biological weapons, or missile delivery systems an export license is required for the item. Always ask about End Use of the export

Don’t Let This Happen to You! On September 17, 2008, 75 additions were made to the Commerce Department’s Entity List because of the entities’ involvement in a global procurement network which sought to illegally acquire U.S.-origin dual-use and military components for the Iranian Government, and for their relationship to the Mayrow General Trading Company. This network is spread across several countries, including the United States. U.S.-origin goods diverted to Iran via this network include those controlled by the EAR for missile technology, national security and anti-terrorism reasons as well as those controlled under the International Traffic in Arms Regulations. For Mayrow General Trading Company, the Entity List sets forth a license requirement for all items subject to the EAR and a license review policy that is a presumption of denial.

Don’t Let This Happen to You!

Don’t let this Happen to you? Cabela’s Incorporated – fined $680,000 civil penalties in Nov 2008 for exporting optical sighting devices for firearms without the required export licenses. ITT Night Vision Roanoke – fined $100 million in March 2007 for illegally exporting night-vision technology to China and other countries.

ITAR – Department of State Export Application Requirements 1)Purchase order, contract, or letter of intent, and when not verified on these documents by the foreign party, a document for the foreign party that states end use and use user (signed originals are to be maintained by the applicant) 2) Descriptive literature and/or technical data 3) Precedent Approvals. The case number is mandatory when the request for any unshipped balance of a previously approved license.

ITAR – Department of State Export Application Requirements (cont’d) 4) Letter of explanation. This should only be submitted when the information cannot be included in the application form or attachment and is necessary to add to the contents of the submission. 5) A Form DSP-83, Non-transfer and Use Certificate, only when Significant Military Equipment is being purchased. The sign original must be retained by the applicant and made available to Directorate of Defense Trade Controls (DDTC), upon request.

ITAR – Department of State Export Application Requirements (cont’d) 6) Foreign End-User – Name and address 7) Intermediate Consignee – Name and address (if any) 8) Foreign Consignee – Name and address 9) Freight Forwarder – Name and address (this is to include all persons performing brokering activities) 10) Probable port of exit from the United States

ITAR – Department of State Export Application Requirements (cont’d) Department of State wants to know specifics on the end use, e.g. The TFOCA I cable assemblies ordered in the purchase order #3133 will be used by the Singapore Armed Forces for communication link via Fiber Optic Modem, between two buildings located in a military camp in Singapore. The TFOCA I cable assemblies will be used to connect fiber optic modem and underground fiber optic cable.

BIS – Department of Commerce Export License Application Requirements. Purchase Order Statement by Ultimate Consignee & Purchaser (Form BIS-711) Drawings – Technical Specifications Intermediate Consignee (including address and phone number Ultimate Consignee (including address and phone number) End User (including address and phone number) Specific End Use Letter of Explanation (if necessary) Import/End Use Certificate (if required by importing country)

When Quoting Export Lead Times Always make export quotes subject to export controls Manage Customer Expectations If an item is controlled If you are unsure if an item is controlled, assume the item is controlled and a find out if a license is required If dealing with a previously unscreened party

Export Items Requiring OCC Management Approvals TFOCA I, Pierside M28876, and M3899 connectors and associated M29504 termini whether alone or attached to ANY type of fiber optic cable (ITAR) Fiber optic cables with TEMPEST rating code “T” or a Tempest Grade jacket (ITAR) Any cable to be used as or as part of a submersible tether or umbilical cable, including reinforcement code C1 (A01-Oil) or any cable designated for this use (EAR) Optical fibers capable of withstanding a proof test of 2x109 N/m2 (290 kpsi) or greater (EAR)

Export Items Requiring OCC Management Approvals (continued) Communications cables designed or modified to detect surreptitious intrusion, including, but not limited to Fiber Sensys SecurLAN cables (EAR) Any cable or component specially designed to withstand electromagnetic pulse (EMP or HEMP) effects Any electronic communications equipment specially designed to operate outside the temperature range from -55°to +124°C (EAR) Detailed technical data regarding any of the above products

TFOCA II Connectors/Assemblies, Rad-Hard Fiber/Cable, Military Reels May need export license if going to company or country on bad lists, or being used in activities related to nuclear, chemical, or biological weapons, or missile delivery systems. No longer requires management approval to enter order