Print PDF

State Dept. Requires Remedial Measures While Easing Restrictions on Debarred Company

Thursday, May 12, 2016
Sandler, Travis & Rosenberg Trade Report

The State Department has published an agreement with Rocky Mountain Instrument Company in which this statutorily debarred company will undertake specified measures to ensure compliance with the International Traffic in Arms Regulations while being allowed to participated in limited ITAR-related activities. ST&R previously reported on those activities; this article provides details on the measures required of RMI.

RMI was convicted in 2010 for violations of the Arms Export Control Act and sentenced to forfeit $1 million and serve five years’ probation. Its export privileges were automatically revoked and it was statutorily debarred, which prohibited it from engaging directly or indirectly in transactions subject to the ITAR.

According to a State Department press release, RMI requested that its export privileges be reinstated and its statutory debarment be revoked after satisfying the requirements of its plea agreement with the Department of Justice, cooperating with State, and implementing or agreeing to implement extensive remedial compliance measures. Instead, State has opted for a two-year agreement intended to allow it to oversee RMI’s implementation and application of its ITAR compliance program while RMI participates in limited ITAR-related activities. This agreement provides for the following actions on the part of RMI.

- The vice president of corporate affairs will be appointed to serve as the responsible official for the oversight of RMI’s responsibilities under this agreement.

- The responsible official must ensure that RMI has in place policies and procedures necessary to maintain full compliance with the company’s ITAR-regulated activities and to monitor, improve and update those policies and procedures as necessary.

- If its export privileges are reinstated during the term of the agreement, RMI will not be allowed to export or transfer ITAR-controlled technical data or defense articles without the knowledge and prior approval of the responsible official, who must notify State prior to the export or transfer that this requirement has been met.

- The responsible official must report on RMI’s AECA and ITAR compliance program enhancements every six months, including a description of all defense articles manufactured by RMI during the period; information on the creation, storage and transfer of technical data by RMI; information regarding RMI’s compliance with this agreement; findings, conclusions and recommendations necessary to ensure compliance; allocation of resources toward compliance; and a summary of the recommendations from previous reports.

- The responsible official must promote a corporate culture of ITAR awareness and ensure that all personnel receive the necessary training for ITAR-regulated activities.

- RMI must review and verify the export control jurisdiction of all items it manufactures within 12 months and report the results of the review to State.

- An audit of the overall effectiveness of RMI’s ITAR compliance program and its implementation of the measures in this agreement must be conducted by a State-approved outside counsel or consultant with expertise in AECA and ITAR matters.

- Three months before the agreement’s second anniversary RMI must certify in writing as to whether it has implemented all aspects of this agreement, the audit has been completed, and its export compliance program is adequate to identify, prevent, detect, correct and report AECA and ITAR violations.

To get news like this in your inbox daily, subscribe to the Sandler, Travis & Rosenberg Trade Report.

Customs & International Headlines