Why is ITAR Necessary in Enterprises?

September 1, 2020

  ITAR is the acronym for International Traffic in Arms Regulation and it consists of a set of compliance guidelines laid down by the Directorate of Defense Trade Controls (DTDC), of the United States government. To put it simply, it is a set of stringent guidelines that need to be followed by companies that manufacture, […]

ITAR Compliance


ITAR is the acronym for International Traffic in Arms Regulation and it consists of a set of compliance guidelines laid down by the Directorate of Defense Trade Controls (DTDC), of the United States government. To put it simply, it is a set of stringent guidelines that need to be followed by companies that manufacture, deal, export or import, any defense articles, and services. These guidelines are not just limited to physical goods, but also include information and files and so on; especially the CUI (Controlled Unclassified Information). The compliances will be applicable to everything that is listed on the United States Munitions List (USML) in articles and services.

The tricky part here is that all companies dealing with such goods and services should also ensure that their brokers or partners, down the supply chain, should also be ITAR compliant. As is the case with any compliance, the violations of ITAR also result in extremely worrisome repercussions. The penalties, including both civil and criminal, are quite high. The fines could run into millions of dollars, along with imprisonment and debarment from further government contracts, as well.

These repercussions are besides that, of taking a hit on the reputation of the organization, which could be much more damaging. The large enterprises may well recover from such incidents, but the small and medium ones may have to wind up their business altogether. Hence, it is important for all enterprises that deal with such goods, and services to ensure that they are ITAR compliant. It is not just a matter of survival; it is also to ensure that they do business with the best in the industry, by ensuring what it takes. Dealing with such security first organizations is a matter of pride for most enterprises. Hence, if they can do so consistently without any untoward incidents, it is a validation of the high business standards of the enterprise, as well.

The Challenges

The challenges for enterprises, especially small and medium businesses dealing with such sensitive information are many. These stringent compliances need to be built into their everyday data governance, covering all forms of communication, including their employees, customers, and vendors. There has to be a sound data governance policy that can be strictly monitored to ensure compliance. This is a must, as they may also be monitored or audited by governmental agencies themselves.

The compliance requirements are quite complicated also, with multiple layers of security like end-to-end encryption, data classification, data loss prevention, controlled access, and so on. For ensuring such strict compliances for data storage and movement, the enterprises would look at retaining complete control over their data. They may look at having private servers, stringent access control, sound backup policies, foolproof security measures, and so on. This could mean extra expenses in the form of infrastructure and its maintenance cost, as well as constant monitoring efforts for alerts, logs, and audits.

While these may not look challenging for large enterprises, SMEs will have to balance the compliance with their available budgets. With most enterprises moving to cloud service providers to save on their infrastructure costs, as well as for the convenience of operations, the compliance factor becomes doubly challenging. With Cloud comes the many other unique challenges of blending in the stringent organizational data governance policies into the cloud vendor’s infrastructure.

The Solution

The chances of an overlook on the compliance side are high, as it could just be an oversight by employees as well. However, the repercussions, remain the same for any non-compliance that occurs. Hence, to ensure compliance, it is important to ensure complete control within the organizational infrastructure and data governance policies.

The other option is to look for Cloud service providers who are already ITAR compliant, and also provide you the complete freedom and flexibility to manage your data. It is important to choose a partner that understands the importance of such compliances and maintains its policies, based on constant updates. The cloud contract should also extend to the lapses in the compliances, to protect the interests of the organization. A good idea may be to look at providers that are already working with government agencies, as it would mean that they have a robust compliance system in place.

It is better to list out all data governance requirements as a checklist for all necessary compliances, without compromising on any other organizational requirement. While many Cloud service providers may provide you with a lot of flexibility and control, specific compliances may not be available. A look at the best practices for ITAR Cloud compliance is a good way to prepare that checklist and start ticking.

The Silver Lining

While the ITAR compliance may seem a bit too overwhelming for most small and middle enterprises, with the right Cloud service partner, this can be overcome easily. Cloud service providers like FileCloud understand the importance of such compliances and its sensitivity, as they know what it takes.

FileCloud has been working with such agencies, and quite successfully, and the ITAR compliance is quite reliable. Also, there is complete flexibility and control over the data governance policies. If enterprises would like to retain their infrastructure to ensure complete control over the infrastructure, FileCloud can cloud-enable those servers as well.

When the stakes are high, it is always best to ensure all possible risks of non-compliances are plugged. One of the best ways to do that would be to tie up with a partner that best understands this business and makes it easier to do so. With many added benefits, going with a partner like FileCloud could be a big advantage that can make ITAR compliances easy and smooth for enterprises.

By Team FileCloud