The sweeping changes being made by the U.S. government are expected to bring significant modifications in export regulations, including military products. While North America's EMS providers need to watch what's happening as these regulations are transformed over the coming years, they also need to continue to focus on meeting regulations that are already in place.

There's a chance that International Traffic in Arms Regulation (ITAR) and other regulations that dictate how North American companies handle controlled products will undergo dramatic alterations. The Obama administration's National Export Initiative calls for a doubling of exports over the next five years. That ambitious effort could prompt a major rewrite of ITAR, or possibly a merger of the agencies that now manage commercial and defense exports.

"This area of export regulation is changing, so people really need to pay attention. It could bring a reclassification of the way the U.S. holds onto its crown jewels," said Robert Davis, Vice President of Excelerate, a service company that specializes in international trade. "The export regulations are difficult to manage already."

Much of the complexity involves the governments regulations set in place to protect or control the export of U.S. defense information, articles and services. Any company that produces military equipment that the government deems of critical importance must comply with regulations set by the Directorate of Defense Trade Controls. Sometimes, manufacturers may not even know they need to comply with ITAR regulations. For example, a company may become sub-prime supplier of another subprime and not realize its equipment is going into a military vehicle.

"A company may make a power supply used in a mine resistant vehicle, for example," Davis said. "If the vehicle is defined for defense use and you provide a unique custom designed power supply for that application, it is considered a ‘controlled article' and you need to register with the Directorate."

The regulations call for strict differentiation between U.S. and foreign persons. Foreign workers, even those from historic U.S. allies like Canada and England, can't work on regulated production lines.

"Companies need to firewall production lines manufacturing defense hardware, especially if they have foreign visitors coming in. Production of even minor or obscure components that are controlled per the U.S. Munitions List should be off limits to foreign persons," Davis said. A wall or temporary curtain should block their view, he added.

Davis will be discussing the topic at the IPC Conference for the North American EMS Industry: What It Takes to Supply the Military. The day-long session will be held September 15, 2010 in Washington, D.C. His session will examine the many ways that companies can run afoul of government restrictions in regards to defense exports.