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22 The PCB Magazine • July 2017 New Political Alliances As defence projects can last over many de- cades, it is wise to consider the political land- scape. Conducting business with NATO coun- tries and U.S. allies is a sound strategy. Field Test Some products such as missiles require ex- tensive field tests. The more rigid testing a requalification of an article requires, the more careful one should be regarding selection of the supplier. Risks and Implications of Failing to Comply with DoD Regulations DoD requires that a clause mandating strict compliance with U.S. export and import control laws and regulations is included in all DoD solicitations and contracts, including contracts between prime contractors and sub- contractors. This requirement highlights the importance of close communication with your manufacturers and sub-suppliers down to the tiniest part of your products to ensure compli - ance. DFARS Subpart 225.7 prohibits all pro- curement from Mainland China. DFARS Sub- part 225.10 and 225.003 states that foreign acquisition can only be conducted from NATO countries or allies of the United States. Any exemption from this regulation requires a de- viation approval according to DFARS Subpart 201.4. FAR, DFARS and ITAR specifically relate to defense programs of the U.S. government. The consequences of not following the regulations are severe. Violations of the U.S. export control laws may lead to civil and criminal penalties of up to $1 million, or twice the value of a trans- action, imprisonment, administrative penalties and suspension or debarment from U.S. govern- ment contracting. The What, How, Where and to Whom What can you do to ensure compliance? Initiate all development projects by determin- ing the internal and external factors and im- plementing a strategy regarding standardizing a compliance document for the project. The document should follow the product and the BOM from development to mass production. Put simply, if you ensure compliance for all the articles entering your supply chain, then you will automatically have compliance for all the products leaving your supply chain. Ensure that all new products consist of com- ponents from DoD approved countries as this will significantly decrease your total cost, re- duce administration and provide your sales force with access to the United States defence market. Transparency, compliance methodology and clear communication with your partners, ensures that correct information regarding what, how, where and to whom articles are produced and delivered, are addressed. Identi- fying who the end customer can be will place restrictions on elements as country of origin for the parts necessary to build your product. As a general notice, one can state that buying from a NATO country is within all parameters. Howev- er, if your product consists of parts produced in China then you are subjecting the whole trans- action to a variety of penalties from the United States. You must know the country of origin down to the component, printed circuit or material level of your products and the BOM should en- compass a country of origin for every article. Otherwise, you risk not only jeopardising your customer's business being banned from deliver- ing to the U.S market, but substantial penalties to your own company. PCB References 1. Federal Acquistion Regulations 2. Defense Federal Acquisition Regulations Supplement 3. International Traffic in Arms Regulation Didrik Bech is CEO of printed circuit broker Elmatica. He can be reached by clicking here. STRATEGIES FOR COMPLIANCE WITH DOD REGULATIONS INCLUDING ITAR AND DFARS