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Viewing cable 09BERLIN770, EUROPEAN INDUSTRY WARY, AND WEARY, OF ITAR

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Reference ID Created Released Classification Origin
09BERLIN770 2009-06-26 12:58 2011-08-24 01:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Berlin
VZCZCXYZ0000
RR RUEHWEB

DE RUEHRL #0770 1771258
ZNR UUUUU ZZH
R 261258Z JUN 09
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC 4452
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
UNCLAS BERLIN 000770 
 
SENSITIVE 
 
SIPDIS 
COMMERCE FOR BIS 
JUSTICE 
PM/DDTC FOR BLUE LANTERN COORDINATOR 
 
E.O. 12958: N/A 
TAGS: ETTC KOMC GM
SUBJECT: EUROPEAN INDUSTRY WARY, AND WEARY, OF ITAR 
REGULATIONS, BUT ON BOARD WITH COMPLIANCE 
 
1.  (SBU) Summary:  At the "ITAR Compliance in Europe" 
conference in Munich, European defense industry 
representatives expressed concern regarding International 
Trafficking in Arms Regulations (ITAR), but clearly 
understood the message from U.S. legal, consulting and 
government representatives that ITAR compliance was a vital 
part of the defense industry.  Approximately 65 defense 
industry delegates from across Europe attended two days of 
panel presentations from 35 presenters from the U.S. and 
Europe.  End Summary. 
 
2.  (SBU)  Panel participants represented the Departments of 
State, Commerce and Justice. They explained the spectrum of 
checks and enforcement mechanisms that exit to monitor and 
control U.S.-origin defense goods around the world.  These 
include the Blue Lantern program for ITAR military items and 
a similar 
Commerce-BIS program for dual use items, as well as warning 
letters and civil penalties.  In serious cases involving 
willful violations, the Justice Department will file criminal 
charges against both companies and individuals. 
 
3.  (SBU)  The American legal and consulting industry's 
speakers presented a consistent message during the 
conference:  an ounce of prevention is worth a pound of cure. 
 They presented elements of best practices for ITAR 
compliance, including record keeping, performing independent 
internal audits and responding to government inquiries and 
enforcement actions.  These presenters also recommended that, 
in the case of a violation, companies should strongly 
consider voluntary disclosure to U.S. export control 
authorities in an effort to mitigate their liability.  As one 
US-based consultant said, "compliance is good business".  The 
risks of non-compliance, he explained, are not just civil 
fines and criminal prosecution, but include the risks of 
expensive project delays and their concomitant reputational 
risk in the defense industry. 
 
4. (SBU)  European defense industry representatives voiced a 
number of concerns, frustrations and complaints about the 
ITAR system.  The "deemed export" regulations were a source 
particular concern, with an executive of a large German 
aerospace company telling Econoff that what he fears most is 
an inadvertent deemed export from the US to his company of 
ITAR information.  Another Dutch aerospace company 
representative said that the deemed export regulations were 
the "hardest things to get our heads around".  Echoing these 
sentiments, more than one attendee said they feared that many 
of their U.S. suppliers do not understand ITAR regulations, 
putting the European customer at increased risk of committing 
a violation.  Others spoke of lengthy delays in receiving 
export licenses or modifying existing licenses. 
 
5.  (SBU) The European defense attendees expressed a variety 
of other concerns surrounding ITAR issues.  A British defense 
industry company delegate explained the difficulties in 
certifying to USG authorities the citizenship of employees 
with access to ITAR information, citing national and EU 
privacy and anti-discrimination laws.  One defense industry 
attendee related that he once considered "going ITAR free" on 
a project, sourcing all components outside of the ITAR 
scheme, but came under USG pressure not to do so.  (Note:  He 
did not indicate if he felt the USG exerted this pressure to 
allow the USG to keep a finger on the project, to promote 
U.S. defense exports, or for some other reason.  End Note.) 
 
6.  (SBU)  Comment:  While the defense industry attendees 
focused on the most serious aspects of ITAR enforcement, 
criminal prosecutions, they did not shy away from their 
responsibilities.  Rather, the pervasive tone of the 
conference, from both the European defense industry and their 
American attorneys and consultants, was one of wanting to 
comply with the ITAR rules.  There was no / no explicit or 
implicit discussion of "cutting corners" or "how not to get 
caught".  To the contrary, there was a 
recognition that, while ITAR compliance may be expensive and 
difficult, there is no substitute for a commitment to 
compliance, vigilance, and cooperation. 
Koenig