Decoding the ITAR 'See-Through' Rule: What Exporters Need to Know

Introduction

The International Traffic in Arms Regulations (ITAR) govern the export and handling of defense-related articles, services, and technical data listed on the U.S. Munitions List (USML). Among the many compliance challenges under ITAR, one concept that frequently confuses exporters and manufacturers is the “see-through” rule. This rule determines how the presence of ITAR-controlled components affects the export classification of an end product. Understanding the “see-through” rule is critical to avoid inadvertent violations, maintain proper export controls, and protect U.S. national security interests.

1. What the “See-Through” Rule Means

The “see-through” rule is an informal term used to describe the ITAR’s principle of continuous jurisdiction over defense articles. In simple terms, if an item contains any ITAR-controlled part or component, the entire item is considered subject to ITAR—B'even if the ITAR component represents only a small fraction of the final product'. The Department of State’s Directorate of Defense Trade Controls (DDTC), which administers ITAR, effectively “sees through” the larger system to the controlled component within it.

For example, if a U.S. company integrates an ITAR-controlled guidance module into an otherwise commercial drone, the entire drone becomes subject to ITAR, regardless of the drone’s other components or commercial nature. This broad reach underscores ITAR’s intent: once a defense article, always a defense article—unless formally reclassified or decontrolled by the U.S. government.

2. Regulatory Basis and Interpretive Guidance

The “see-through” rule is not explicitly codified in the text of ITAR, but it arises from DDTC’s longstanding policy interpretations and advisory opinions. Specifically, 22 C.F.R. § 120.6 defines a “defense article” as any item or component that is specifically designed, developed, configured, adapted, or modified for a military application. Because ITAR controls extend to items that incorporate such components, DDTC treats the presence of a defense article as sufficient to render the larger system subject to ITAR jurisdiction.

The Department of Commerce’s Export Administration Regulations (EAR), by contrast, do not apply the same logic. Under the EAR, a product’s classification is generally determined by its functional characteristics and performance capabilities rather than the origin of its components. This distinction between ITAR’s “see-through” approach and the EAR’s more flexible classification framework is a major source of confusion for companies engaged in both defense and commercial manufacturing.

3. Impact on Manufacturers and Exporters

The “see-through” rule has significant compliance implications for manufacturers, systems integrators, and exporters. Companies must exercise extreme caution when incorporating ITAR-controlled parts into larger assemblies. Once an item falls under ITAR, it is subject to strict licensing requirements for exports, reexports, and even transfers to foreign persons within the United States.

This can have practical consequences, such as:

• Supply chain limitations: Foreign suppliers and customers may be unwilling or unable to handle ITAR-controlled materials.
• Operational constraints: Manufacturing abroad or collaborating with foreign engineers may require prior DDTC authorization.
• Administrative burdens: ITAR registration, recordkeeping, and licensing can be time-consuming and costly for firms that handle even a single controlled component.

Failing to comply can result in severe civil and criminal penalties, as well as loss of export privileges.

4. Reform Efforts and Exceptions

Over the past decade, the U.S. government’s Export Control Reform (ECR) initiative has sought to rationalize these rules. Some items previously controlled under ITAR have been moved to the Commerce Control List (CCL), where they are subject to the EAR’s more flexible controls. However, the “see-through” principle remains a key feature of ITAR and has not been formally eliminated.

In limited cases, companies may seek B'commodity jurisdiction (CJ) determinations' from DDTC to clarify whether a product incorporating ITAR parts should remain under ITAR or qualify for EAR treatment. These determinations are fact-specific and hinge on factors such as design intent, function, and degree of modification.

Conclusion

The ITAR “see-through” rule reflects the U.S. government’s cautious approach to defense trade—ensuring that sensitive technologies remain under control even as they are integrated into broader systems. For businesses operating in the defense and aerospace sectors, understanding this rule is essential to compliance. Any incorporation of ITAR-controlled components should trigger careful review, robust recordkeeping, and, where appropriate, consultation with export counsel or DDTC.