Mandatory Export Registration for Non-Exporters: A Hidden Danger for Small Arms Companies

One of the most perplexing requirements that manufacturers of defense articles in the United States face, and one about which I am often asked in my legal representation and advising of companies in the firearms and ammunition business, is the mandatory export registration requirements for producers of defense articles.  Section 122 of the ITAR states that “[a]ny person who engages in the United States in the business of manufacturing or exporting or temporarily importing defense articles, or furnishing defense services, is required to register with the Directorate of Defense Trade Controls.”  22 C.F.R. §§122.1(a). 

Put more simply, this means that any person or company, located in this country, who even manufactures (makes, produces, designs, etc.) any type of defense article (firearm, part, accessory, ammunition, etc.) must register with the State Department.  Making abundantly clear that this applies to everyone and every action, the regulations further provide that “engaging in such a business requires only one occasion,” and reiterates its universal application, even to non-exporters, by pointing out that “[a] manufacturer who does not engage in exporting must nevertheless register.”  Id.

Now, it is reasonable for a company looking to export its products – regardless of the industry in which it operates – to inquire into and research the relevant export regulations, but common sense would not dictate that a company or person (this applies even to a garage inventor or gunsmith) only engaged in domestic business would familiarize herself with export rules.  Therefore, it often comes as an unsettling surprise to honest, above-board firearms and ammunition manufacturers to realize that they are delinquent in registration, upon learning about this part of the ITAR.

While it is said so often as to be a cliché, it never stops being true in the legal world, that what you do not know, can hurt you.  Whether you intend to export or not, it is always a good decision, in preventing future headaches, costs, investigations, and even potential criminal sanctions, for anyone or any company in the business of manufacturing defense articles to have an experienced small arms attorney run a compliance check of one’s operation.