1. Company Confidential Registration Management Committee RMC Auditor Workshop Charleston, SC - 22-23 July 2015 1 Determining Export Restrictions Dave Day and Jeff Long 22-23 July, 2015 Charleston SC

2. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee Content ITAR vs. EAR A Five Step Process Examples 2

3. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee ITAR – International Traffic in Arms Regulations 3 22 CFR Part 120, Sub-Chapter M §120.1 General authorities, receipt of licenses, and ineligibility. (a) Section 38 of the Arms Export Control Act (22 U.S.C. 2778), as amended, authorizes the President to control the export and import of defense articles and defense services. The statutory authority of the President to promulgate regulations with respect to exports of defense articles and defense services is delegated to the Secretary of State by Executive Order 13637. This subchapter implements that authority, as well as other relevant authorities in the Arms Export Control Act (22 U.S.C. 2751 et seq.). By virtue of delegations of authority by the Secretary of State, these regulations are primarily administered by the Deputy Assistant Secretary of State for Defense Trade Controls, Bureau of Political-Military Affairs.

4. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee EAR – Export Administration Regulations 4 15 CFR Part 730 15 CFR Part 730 and forward §730.1 What these regulations cover. In this part, references to the Export Administration Regulations (EAR) are references to 15 CFR chapter VII, subchapter C. The EAR are issued by the United States Department of Commerce, Bureau of Industry and Security (BIS) under laws relating to the control of certain exports, reexports, and activities. In addition, the EAR implement antiboycott law provisions requiring regulations to prohibit specified conduct by United States persons that has the effect of furthering or supporting boycotts fostered or imposed by a country against a country friendly to United States. Supplement No. 1 to part 730 lists the control numbers assigned to information collection requirements under the EAR by the Office of Management and Budget pursuant to the Paperwork Reduction Act of 1995.

5. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee The Five Step Process 1.Identity 2.Jurisdiction 3.Classification 4.Authorization 5.Documentation 5

6. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 1. Identity What is being considered for export? –Tangible »Hardware »Data –Intangible »Knowledge 6

7. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 2. Jurisdiction Department of State or Department of Commerce? –Military Unique  State –All Else  Commerce! 7 The key take away here is that ALL exports are controlled!

8. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 2. Jurisdiction (continued) Jurisdiction may be based on “Where Used.” This can be difficult for sub-tier supplier to determine. Dual Use falls under Department of Commerce 8

9. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 3. Classification (Dept. of State) Category I.Firearms, Close Assault Weapons and Combat Shotguns II.Guns and Armament III.Ammunition/Ordinance IV.Launch Vehicles, Guided Missiles, Ballistic Missiles, Rockets, Torpedoes and Mines V.Explosives and Energetic Materials, Propellants, Incendiary Agents and Their Constituents VI.Vessels of War and Special Naval Equipment VII.Tanks and Military Vehicles VIII.Aircraft and Associated Equipment IX.Military Training Equipment X.Protective Personnel Equipment 9

10. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 3. Classification (Dept. of State) (Continued) Category (continued) XI.Military Electronics XII.Fire Control, Range Finder, and Guidance and Control Equipment XIII.Auxiliary Military Equipment XIV.Toxicological Agents, Including Chemical Agents, Biological Agents, and Associated Equipment XV.Spacecraft Systems and Associated Equipment XVI.Nuclear Weapons, Design and Testing Related Items XVII.Classified Articles, Technical Data and Defense Services Not Otherwise Enumerated XVIII.Directed Energy Weapons XIX.Reserved Gas Turbine Engines and Associated Equipment XX.Submersible Vessels, Oceanographic and Associated Equipment 10

11. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 121.1 Category VIII (i) Technical data and defense services directly related to the defense articles enumerated… 11

12. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee C ATEGORY XIX—G AS T URBINE E NGINES AND A SSOCIATED E QUIPMENT This is the latest category It lists specific engine models and components 12

13. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee ITAR Bottom Line If it is listed in the Unites States Munitions List (USML), it is restricted. If it is not listed in the USML, it falls under the control of the Department of Commerce 13

14. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 3. Classification (Dept. of Commerce) The Commerce Control List (CCL) Category 9 – PROPULSION SYSTEMS, SPACE VEHICLES AND RELATED EQUIPMENT A.SYSTEMS, EQUIPMENT AND COMPONENTS B.TEST, INSPECTION, AND PRODUCTION EQUIPMENT C.MATERIALS D.SOFTWARE E.TECHNOLOGY 14

15. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee CCL “Technology” 9E001 – Development 9E002 – Production 9E003 – Other, e.g. Hot Section 15

16. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee Commerce Reasons for Control CB – Chemical and Biological Weapons NP – Nuclear Nonproliferation NS – National Security MT – Missile Technology RS – Regional Stability FC – Firearms Convention CC – Crime Control AT – Anti-Terrorism 16

17. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 4. Authorization From the USML classification or the Commerce Control List and the appropriate Export Control Classification Number, the Reason for Control is looked up in the relevant country chart to determine if DoS restricts or if DoC requires a license. 17

18. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 4. Authorization 18

19. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 5. Documentation Anytime you are making a decision on export control, you should document the decision process from the four steps above. 19

20. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee ITAR Example ( 22 CFR Ch I 121.1, Category VIII) Category VIII—Aircraft and Associated Equipment * (a) Aircraft, including but not limited to helicopters, non- expansive balloons, drones, and lighter-than-air aircraft, which are specifically designed, modified, or equipped for military purposes. This includes but is not limited to the following military purposes: Gunnery, bombing, rocket or missile launching, electronic and other surveillance, reconnaissance, refueling, aerial mapping, military liaison, cargo carrying or dropping, personnel dropping, airborne warning and control, and military training. (See § 121.3.)121.3 20

21. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee ITAR Example ( 22 CFR Ch I 121.1, Category VIII) * (b) Military aircraft engines, except reciprocating engines, specifically designed or modified for the aircraft in paragraph (a) of this category, and all specifically designed military hot section components (i.e., combustion chambers and liners; high pressure turbine blades, vanes, disks and related cooled structure; cooled low pressure turbine blades, vanes, disks and related cooled structure; cooled augmenters; and cooled nozzles) and digital engine controls (e.g., Full Authority Digital Engine Controls (FADEC) and Digital Electronic Engine Controls (DEEC)). However, if such military hot section components and digital engine controls are manufactured to engineering drawings dated on or before January 1, 1970, with no subsequent changes or revisions to such drawings, they are controlled under Category VIII(h). 21

22. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 22 CFR Ch I 121.1, Category VIII (h) Components, parts, accessories, attachments, and associated equipment (including ground support equipment) specifically designed or modified for the articles in paragraphs (a) through (d) of this category, excluding aircraft tires and propellers used with reciprocating engines. 22

23. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 22 CFR Ch I 121.1, Category VIII (i) Technical data (as defined in § 120.10) and defense services (as defined in § 120.9) directly related to the defense articles enumerated in paragraphs (a) through (h) of this category (see § 125.4 for exemptions), except for hot section technical data associated with commercial aircraft engines. Technical data directly related to the manufacture or production of any defense articles enumerated elsewhere in this category that are designated as Significant Military Equipment (SME) shall itself be designated SME. 23

24. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee Significant Military Equipment (SME) (b) Significant military equipment: An asterisk precedes certain defense articles in the following list. The asterisk means that the article is deemed to be “Significant Military Equipment” to the extent specified in § 120.7 of this subchapter. The asterisk is placed as a convenience to help identify such articles. Note that technical data directly related to the manufacture or production of any defense articles enumerated in any category that are designated as Significant Military Equipment (SME) shall itself be designed SME. 24

25. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee EAR Excerpts (15 CFR Part 730 et seq.) 9A001 Aero gas turbine engines having any of the following (see List of Items Controlled). LIST OF ITEMS CONTROLLED –Unit: Number –Related Controls: See also 9A101 and 9A991 –Related Definitions: N/A Items: –a. Incorporating any of the technologies controlled by 9E003.a, 9E003.h, or 9E003.i; or 25

26. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee EAR Excerpts (15 CFR Part 730 et seq.) 9E003 –a.1. Gas turbine blades, vanes or ‘‘tip shrouds’’, made from directionally solidified (DS) or single crystal (SC) alloys and having (in the 001 Miller Index Direction) a stress rupture life exceeding 400 hours at 1,273 K (1,000 °C) at a stress of 200 MPa, based on the average property values; –a.2. Multiple domed combustors operating at average burner outlet temperatures exceeding 1,813 K (1,540 °C) or combustors incorporating thermally decoupled combustion liners, non-metallic liners or non-metallic shells 26

27. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee EAR Excerpts (15 CFR Part 730 et seq.) 9E001 “Technology” for “development”… 9E002 “Technology for “production”… 9E003 Other “technology”… Etc. EAR99 Items subject to the EAR that are not elsewhere specified in this CCL Category or in any other category in the CCL are designated by the number EAR99. 27

28. RMC Auditor Workshop Charleston, SC - 22-23 July 2015 Registration Management Committee 28