The Directorate of Defense Trade Controls (“DDTC”) within the State Department has relaunched its “Company Visit Program.” Under the Company Visit Program, DDTC officials come to your office to review your company’s compliance activities under the International Traffic In Arms Regulations (“ITAR”). DDTC has recently resumed conducting company visits and has issued additional information about the program - every company that is regulated under ITAR should be familiar with this.
Under the program, companies are selected for a visit under DDTC’s screening criteria. Two or more officials from DDTC’s Compliance Office will conduct the visit. Visits last 1-2 days. During the visits, the DDTC officials meet with senior executives and company compliance personnel and review the company’s compliance activities.
DDTC has recently issued additional information about the program, including a series of Frequently Asked Questions.[1] The following are a number of these FAQ’s that are instructive:
What is the Company Visit Program?
The Company Visit Program (CVP) entails visits by Directorate of Defense Trade Controls (DDTC) officials to U.S. entities registered with DDTC as manufacturers, exporters, or brokers of defense articles and defense services, as well as others involved in ITAR-regulated activities, to include foreign companies and foreign governments. The CVP is administered by the Office of Defense Trade Controls Compliance (DTCC); however, representatives from DDTC’s Licensing and Policy offices, or other entities in the Department or elsewhere in the U.S. government, may also participate in the visits.
What is the purpose of the Company Visit Program?
The CVP has several purposes. First, the CVP ensures DTCC understands how compliance programs are implemented in accordance with the International Traffic in Arms Regulations (ITAR). Second, the program enables DDTC to gather information to support the Directorate’s development of regulatory policy and practice. Finally, DTCC uses site visits to glean, assess, and disseminate industry best practices, provide feedback to individual companies on their compliance programs, and share information on compliance programs industry-wide. …
How is the DDTC team staffed for each CVP visit?
A CVP team typically consists of two or more staff from DTCC, depending on the size of the individual company/site being visited and number of companies/facilities visited per trip. On some CVP visits, staff members from the Offices of Defense Trade Controls Licensing and Policy, or other relevant agencies, may participate. One DTCC team member serves as team lead and primary point of contact with the company. This primary contact is responsible for coordinating the site visit with the company.
How is a CVP visit conducted and what should a company expect?
Are Blue Lantern Checks the same as Company Visits for foreign companies?
The Blue Lantern program is not the same as the Company Visit Program. The Office of Defense Trade Controls Policy manages the Blue Lantern program; end-use checks are conducted by embassy personnel overseas and focus on end-user and end-use verifications related to DDTC authorizations.
It is important to be ready if DDTC requests a visit with your company. Companies are advised not to wait until the last minute but rather have their ITAR compliance house in order in prior to being contacted for a visit. This includes:
Of course, companies should be in full compliance with ITAR not just to avoid problems with DDTC office visits, but to also otherwise avoid liability for ITAR violations, including civil and criminal penalties of up to $1 million in fines and 20 years imprisonment.
The best defense is a good offense – companies should plan in advance and be prepared to avoid more serious problems later on. And “later on” may now come sooner than you think.
[1] See DDTC company guidance “Company Visit Program (CVP), dated July 17, 2016, available on DDTC website.