Export Control

INTRODUCTION

Living by the Northrop Grumman Values and Standards of Business Conduct is one of our most important responsibilities. We have set high ethical standards. Abiding by these standards and strictly observing all U.S. and foreign laws and regulations is not only a legal requirement but also an ethical obligation for us at Northrop Grumman.

There are very specific laws and regulations to be followed when dealing with exports. These laws and regulations are administered by the State Department for defense articles and services and by the Department of Commerce for dual use (i.e. military or civilian) items. The U.S. Customs and Border Protection agency enforces the export regulations of the various departments. The regulations are in place to protect U.S. national security and foreign policy objectives (State) as well as to protect U.S. economic interests (Commerce).

Exports are items or knowledge provided to foreign persons in the United States or abroad and the delivery of information to U.S. persons while located in foreign countries.

Exportable items or knowledge may include, for example:

products
test and repair equipment
technical services
commodities
executable program code
proposals
hardware
technical data and/or knowledge
models and prototypes
software
blueprints
photographs and performance data
subassemblies
drawings
computer data files
individual components
operating instructions

A foreign person is:

someone who is not a U.S. person (not a U.S. citizen or a permanent resident alien)
A foreign corporation, business association, partnership, trust, society or any other foreign entity or group that is not incorporated or organized to do business in the United States
International Organizations
Foreign governments and any agency or subdivision thereof (e.g. diplomatic mission).

U.S. subsidiaries of corporations located outside the United States may require special review because, in some instances, they may be considered foreign persons and/or may employ foreign persons.

WHEN AND HOW DO EXPORTS OCCUR?

Sending or taking any controlled defense article or dual use article outside the United States or providing it to a foreign person within the U.S.
Disclosing (including orally or visually) or transferring technical data to a foreign person within the United States or abroad
Performing a defense service on behalf of or for the benefit of a foreign person in the United States or abroad
Escorting tours of company facilities for foreign persons
Publication of technical data, presentations and/or technical papers at symposia, conferences or meetings, technical discussions and even casual conversations
Transferring information over international communications systems such as the Internet, facsimile, video conference, NetMeeting, and telephone conversations.

The party you want to communicate with or the country involved may not even be eligible for an export license because of U.S. government prohibitions. If you have any question about this or any other aspect, please discuss it with your sector?s legal counsel or export compliance focal point. You can also contact the company?s Director of Corporate Export/Import Management, or call the Sector OpenLine or the Corporate OpenLine.

ELEMENTS OF AN EXPORT LICENSE

Exports require government permission in the form of a license or written approval. The license must be specific and identify the items, services or data to be exported, and is issued for a fixed period of time. Export licenses or approvals may be needed:

To provide technical data to foreign customers or suppliers
To return a part to a foreign supplier for repair
To return a part to a foreign customer after the part has been received, repaired or replaced
To discuss technical data with a foreign customer or supplier
To conduct design discussions with a foreign customer or supplier
To deliver hardware to a foreign customer
To provide proposal data to a potential foreign customer
To temporarily import defense articles
To export defense articles on a temporary basis
To perform any defense services for a foreign customer or supplier.

Some exports may be covered under an existing license and others will require a separate license. It is possible that you may need an export license covering a product before you begin to work on a contract. In any case, before you begin any of the activity listed above with a foreign party, be sure you have the license you need.

PENALTIES

Individuals violating the federal law and applicable regulations on exports are subject to civil and criminal penalties which include fines, jail terms, suspension or denial of exporting privileges and debarment from government contracting. In addition, such a violation of company policy could result in discipline up to and including termination of employment.

LAWS AND REGULATIONS

Employees involved with exports or doing business overseas must also be familiar with the laws and regulations governing these activities, namely, The Arms Export Control Act (AECA) as implemented by the International Traffic in Arms Regulations (ITAR), the Export Administration Act (EAA) as implemented by the Export Administration Regulations (EAR), The Foreign Corrupt Practices Act (FCPA), The Office of Foreign Assets Controls (OFAC), the Anti-Boycott Act, and the Customs Modernization Act (Mod Act).
ITAR, 22 CFR Parts 120-130 - These regulations administered by the State Department require that all exports and temporary imports of defense articles and services and technical data on the U.S. Munitions List be authorized by a U.S. State Department approved license, an approved agreement or an ITAR exemption.
EAR, 15 CFR Parts 730-774 - These regulations, administered by the Department of Commerce, control the export of dual use items or items as specified on the Commerce Control List (CCL).
FCPA - This act prohibits any payments, offers of money or other items of value to an official of a foreign government or a foreign politician or political party for the purpose of improperly influencing the official?s actions or decisions in helping the company get or keep business. It also prohibits making false or misleading entries in company records. (See companion ?Test Yourself? brochure on FCPA.)
OFAC - This agency controls the sanctions and embargoes authorized by the U.S. which prohibit exports to or the conduct of business with certain countries and/or governments.
ANTI-BOYCOTT ACT - The Commerce Department and Treasury Department have certain regulations prohibiting companies and their employees from providing certain types of information to foreign customers and agreeing to certain contractual provisions such as supporting embargoes not approved by the U.S. The regulations require mandatory reporting of certain boycott requests, even if no sale results. It is vital that employees conducting business with foreign governments and companies understand and comply fully with these regulations.
Note: The Law Department must be contacted every time a boycott-related request is received.
U.S. CUSTOMS REGULATIONS, 19 CFR, Chapter 1, Parts 1-199 - These regulations are administered by the Department of Treasury, U.S. Customs Service and detail the import process, including the procedure for the valuation and classification of merchandise.
ALCOHOL, TOBACCO, FIREARMS and EXPLOSIVES (?ATF?) Regulations, 27 CFR Parts 47, 178, and 179 - These regulations detail the import license process for the permanent import of defense articles contained on the U.S. import Munitions List.