CBP Chicago Details Local Procedures for Processing ITAR Defense Articles

(CBP Chicago explains that the instructions contained in this Pipeline are by no means inclusive of all requirements identified in the International Traffic in Arms Regulations (ITAR). The State Department's Directorate of Defense Trade Controls (DDTC) is the controlling and ultimate authority for international movement of U.S. Munitions List (USML) defense articles.

Shipments of defense articles not complying with the provisions of the ITAR are subject to penalty action described in 22 CFR Part 127.)

Highlights of Chicago's Requirements for State Dept-Controlled Defense Articles

The following highlights CBP Chicago's requirements applicable to imports and exports of defense articles controlled by the State Department:

All USML cargo processed at Rosemont facility. All USML requirements for imported and exported cargo will be processed at the CBP facility in Rosemont, Illinois. The Document Analysis Unit will review license exemptions and decrement temporary licenses submitted with entries. The Export Control Desk officer will lodge permanent licenses and decrement temporary licenses for export.

Hand-carried defense items processed at O'Hare airport. Defense articles hand-carried by arriving or departing passengers will be processed at Passenger Terminal 5, O'Hare International Airport. AII ITAR requirements apply to hand-carried as well as cargo shipments.

License amendments must be approved by State Dept. A license amendment must be approved by the State Department and is to be attached to and made an integral part of the approved license to which it applies. (The DSP-119 is the present and interim State Department amendment form. In the near future, DSP-6, 62, and 74 are expected to be the amendment forms used by the State Department. See ITT's Online Archives or 12/05/07 news, 07120535, for BP summary of DDTC's plan to upgrade its current version of D-Trade to enable the use of these forms.)

Defense exports must be reported via AES. Exportations of defense articles must be reported to CBP electronically through the Automated Export System (AES) and identify the port of exit. Chicago is not the port of exit for any truck, rail, or containerized modes of transportation. Paper Shipper's Export Declarations (SEDs) and AES Option-4 filings are not authorized for the exportation of defense articles.

Conditions for export of defense articles. Shipments of defense articles must not be tendered to the exporting carrier until all of the following conditions are met: (1) the Export Control Desk receives and lodges the permanent export license; (2) the export license is decremented either electronically (DSP-05 or 94 permanent licenses) or manually by CBP (DSP-61 or 73 temporary licenses); and (3) AES acceptance is obtained, which must be at least 8 hours prior to the scheduled departure of the air carrier.

Additionally, the exporter must incorporate the following Destination Control Statement (DCS) as an integral part of the air waybill and the invoice whenever USML defense articles are to be exported:

"These commodities are authorized by the U.S. Government for export only to [country of ultimate destination] for use by [end-user]. They may not be transferred, transshipped on a non-continuous voyage, or otherwise be disposed of in any other country, either in their original form or after being incorporated into other end-items, without the prior written approval of the U.S. Department of State."

Export license exemptions. The ITAR permits temporary export of defense articles without a license under certain specified conditions. All ITAR license exemptions must be reported to CBP at the port of exit through an accepted AES filing at least 8 hours before the shipment is tendered to the exporting air carrier.

When claiming a 22 CFR 123.4 license exemption, the exporter must report the complete CBP entry number (filer code and number - 11 characters total) in the Import Entry Number field in the AES transmission and identify the exemption in the DDTC Exemption Number field. Once an exemption is applied, then the DDTC Registration Number of the exporter is mandatory.

CBP Chicago may request to review the entry package upon the subsequent re-exportation of defense articles previously entered under this exemption. The CBP perforated, stamped, or signed CBP Form 3461 is the only acceptable proof of entry. It is suggested that the broker provide a copy of the CBP entry to the importer so they have it available at the time of re-exportation.

Temporary import licenses DSP-61 and DSP-73 may be issued. Temporary State Department licenses authorizing importation or re-importation must be attached to the CBP entry and presented to the Document Analysis Unit for manual decrementation.

A DSP-61 license is required for the temporary import (for repair, modification, overhaul, etc.) of foreign made goods as well as goods originally sold under the Foreign Military Sales (FMS) program and previously exported under the authority of a DSP-94. A DSP-73 license must be presented for all defense articles previously exported under that license and now subsequently being re-imported into the U.S.

Import licenses without a "defense" HTS number. All defense articles may not have a specific tariff number to identify them as defense items. In these instances, the Automated Commercial System (ACS) will not recognize that the shipment is accompanied by a State Department license and may erroneously designate the entry as "paperless."

If the importer/broker has a shipment that is licensed by the State Department and the tariff number is not specific to military goods, the broker may: (1) obligate a Single Transaction Bond (type 9); (2) file the entry as a non-ABI entry; or (3) file the entry via ABI. (See Pipeline for details.)

(CBP Chicago will not validate State Department licenses if the defense articles are no longer in CBP custody. Once delivery to the consignee has occurred, the defense articles are regarded as being imported in violation of the ITAR and are subject to liquidated damages against the importer's bond.)

Import license exemptions. When an import license exemption is claimed, the broker must submit a non-ABI entry or obligate a Single Transaction Bond.

Defense articles claiming a 22 CFR 123.4 license exemption must state on the CBP Form 3461 "This shipment is being imported in accordance with and under the authority of 22 CFR 123.4 (a) (identify subsection)." Brokers whose software does not allow for the full statement to be inserted may use "Imported in accordance with and under the authority of 22 CFR 123.4(a) (identify subsection)." After release by CBP, the broker should provide a copy of the entry to the importer so they have it available at the time of reexportation.

Carnet does not indicate State Dept approval. Obtaining a carnet does not release the obligation to comply with U.S. government import/export controls. A carnet is not a license nor does it indicate State Department approval for the movement of defense articles. The license must be attached to the carnet and presented to CBP for decrementation at the time the carnet is validated. (See Pipeline for details on requirements for entries/carnets associated with a State Department license or license exemption.)

Chicago Pipeline 08-02 (dated 01/08/08) available by emailing BP at documents@brokerpower.com