Export Controls and Sanctions: A Guide for Missouri Manufacturers

Missouri is home to a thriving international trade sector. Missouri is a manufacturing powerhouse. Aerospace components, agricultural equipment, automotive parts, defense systems, and advanced technology products flow from Missouri factories to customers around the world. This international reach is a tremendous economic asset — but it also means that Missouri manufacturers are squarely within the scope of federal export control and sanctions laws.

The consequences of non-compliance are not abstract. Criminal penalties can reach $1 million per violation and 20 years imprisonment for willful ITAR violations. Civil penalties under the EAR can reach $374,474 per violation or twice the value of the transaction, whichever is greater (as adjusted for inflation in January 2025). OFAC violations carry civil penalties of up to approximately $377,700 per violation or twice the transaction value (also inflation-adjusted annually). Beyond the financial penalties, a company that loses its export privileges effectively loses its ability to participate in international commerce.

This guide provides Missouri manufacturers with a practical overview of the three primary export control and sanctions regimes and the steps needed to build an effective compliance program.

The Three Pillars of U.S. Export Controls

Export Administration Regulations (EAR)

The EAR, administered by the Bureau of Industry and Security (BIS) within the Commerce Department, control the export of dual-use items — goods, software, and technology that have both commercial and military or proliferation applications. The EAR are codified in 15 CFR Parts 730-774.

What is controlled? The Commerce Control List (CCL) identifies specific items subject to export controls, organized into ten categories: nuclear materials, materials and chemicals, materials processing, electronics, computers, telecommunications, sensors and lasers, navigation and avionics, marine, and aerospace and propulsion. Each item on the CCL has an Export Control Classification Number (ECCN) that determines which destinations require a license.

When is a license required? Whether an export requires a license depends on the item's ECCN, the destination country, the end user, and the end use. Some items classified as EAR99 — meaning they are not on the CCL — can be exported to most destinations without a license, but even EAR99 items cannot be exported to embargoed countries or prohibited end users.

License exceptions. BIS provides a number of license exceptions that permit certain exports without an individual license application. Common exceptions include TMP (temporary exports), TSR (technology and software under restriction), and STA (Strategic Trade Authorization). Qualifying for a license exception requires careful analysis and documentation.

For Missouri manufacturers, common EAR-controlled items include precision machining equipment, advanced composites, avionics systems, certain chemicals, and dual-use software. Companies that are not sure whether their products are controlled should conduct a self-classification review or request a commodity classification from BIS.

International Traffic in Arms Regulations (ITAR)

The ITAR, administered by the State Department's Directorate of Defense Trade Controls (DDTC), control the export of defense articles, defense services, and technical data listed on the United States Munitions List (USML). The ITAR are more restrictive than the EAR — nearly all exports of USML items require a license or other authorization from DDTC.

USML categories. The USML contains 21 categories of controlled defense articles, from firearms and ammunition to military aircraft, naval vessels, missiles, and classified information. Missouri's aerospace and defense sector frequently encounters USML controls on aircraft components, fire control systems, military vehicles, and associated technical data.

Registration. Any person or company engaged in the business of manufacturing or exporting defense articles must register with DDTC. Registration is mandatory even if you have not yet exported — the act of manufacturing defense articles triggers the requirement. Following a major fee restructuring effective January 2025 — the first adjustment since 2008 — annual registration fees now start at $3,000 for Tier 1 registrants (with a $500 discount available for small businesses where the fee exceeds one percent of annual revenue), $4,000 for Tier 2, and $4,000 plus $1,100 per additional favorable determination for Tier 3.

Deemed exports. Disclosing ITAR-controlled technical data to a foreign national — even within the United States — constitutes a deemed export that requires authorization. Missouri manufacturers employing foreign national engineers, researchers, or technicians who have access to USML technical data must implement Technology Control Plans that restrict access to controlled information.

OFAC Sanctions Programs

The Office of Foreign Assets Control (OFAC) within the Treasury Department administers economic sanctions against designated countries, entities, and individuals. Sanctions programs vary in scope — some impose comprehensive embargoes prohibiting virtually all transactions with a designated country, while others target specific individuals and entities on the Specially Designated Nationals (SDN) list.

Screening obligations. Before completing any export transaction, Missouri manufacturers should screen all parties involved — including the end user, consignee, freight forwarder, and financial intermediaries — against the SDN list and other OFAC sanctions lists. Engaging in a transaction with a designated party, even unknowingly, can result in significant civil penalties under a strict liability standard.

No de minimis exception for sanctions. Unlike the EAR, which has de minimis rules that may exempt certain foreign-made items containing limited U.S.-origin content, OFAC sanctions generally have no de minimis exception. If a transaction involves a sanctioned party or country, it is prohibited regardless of the value or nature of the goods.

Building a Compliance Program

Step 1: Product Classification

The foundation of any export compliance program is knowing what you make and how it is classified. Conduct a systematic review of all products, software, and technology your company exports or could export. For each item, determine whether it is classified under an ECCN on the Commerce Control List, listed on the United States Munitions List, or classified as EAR99. Document the classification rationale and maintain classification records.

Step 2: Destination and End-User Screening

Implement a process for screening all export transactions against applicable restrictions. This includes checking the destination country against country-based controls and embargoes, screening all parties to the transaction against OFAC's SDN list and BIS's denied persons and entity lists, and evaluating the stated end use for red flags that might indicate diversion to a prohibited end use or end user.

Automated screening tools are available and are advisable for companies with significant export volume. However, automated tools are only as good as the data they screen against and the processes that govern their use. Human review of flagged transactions is essential.

Step 3: License Management

When an export requires a license, manage the application process carefully. Maintain records of all license applications, approvals, denials, and returns without action. Track license conditions and ensure that exports comply with all terms of the license. Monitor license expiration dates and apply for renewals or new licenses in advance of deadlines.

Step 4: Training

Train all employees involved in export activities — including sales, engineering, shipping, and management — on the basics of export controls, your company's compliance procedures, and how to identify and escalate red flags. Training should be role-specific and conducted at least annually, with supplemental training when regulations change or new risks emerge.

Step 5: Record Keeping

The EAR require that export records be maintained for five years. The ITAR require records to be maintained for the duration of the license or agreement plus five years. Maintain complete records of all export transactions, including the item exported, its classification, the destination, the end user, the end use, any license or exception relied upon, and the shipping documentation.

Step 6: Internal Audits

Conduct periodic audits of your export compliance program to identify gaps, test controls, and verify that procedures are being followed in practice. Audit findings should be reported to senior management and should drive continuous improvement of the compliance program.

Deemed Exports: The Hidden Risk

For many Missouri manufacturers, the most overlooked export control risk is the deemed export. Any release of controlled technology or source code to a foreign national in the United States is deemed an export to that person's country of citizenship. This means that allowing a foreign national employee to access EAR-controlled technical data or ITAR-controlled defense information may require an export license — even though the technology never leaves your facility.

Missouri's major employers in aerospace, defense, and advanced manufacturing frequently employ foreign nationals in engineering and technical roles. Implementing a Technology Control Plan — which identifies controlled technology, restricts access to authorized individuals, and establishes physical and cybersecurity controls — is essential for managing deemed export risk.

Voluntary Self-Disclosure

If your company discovers that it has made an unauthorized export or violated sanctions, consider filing a voluntary self-disclosure with the appropriate agency. BIS, DDTC, and OFAC all have policies that provide significant mitigation of penalties for companies that voluntarily disclose violations, cooperate with investigations, and implement remedial measures. The decision to self-disclose should be made in consultation with experienced export control counsel who can evaluate the nature of the violation and the potential benefits and risks of disclosure.

Recent Developments Missouri Manufacturers Should Watch

The export control and sanctions landscape is evolving rapidly. Several recent developments are particularly relevant to Missouri manufacturers:

Expanded semiconductor and AI chip controls. In 2025, BIS issued sweeping new rules restricting exports of advanced computing chips, semiconductor manufacturing equipment, and AI-related technology — primarily targeting the People's Republic of China and Macau. BIS added over 60 PRC entities to the Entity List in 2025 alone. In January 2026, BIS revised its licensing policy to allow case-by-case review (rather than a presumption of denial) for certain advanced chip exports to mainland China, provided specific conditions are met. Missouri manufacturers producing electronics, sensors, or precision equipment should review whether their products fall within these expanded controls.

Russia and Ukraine sanctions escalation. OFAC significantly expanded Russia-related sanctions through 2025 and into 2026, including the designation of major Russian oil companies Rosneft and Lukoil in October 2025 and the issuance of new general licenses governing wind-down transactions and petroleum product sales. Missouri companies with any direct or indirect exposure to Russian counterparties must conduct heightened screening and consult updated OFAC guidance regularly.

CFIUS enforcement expansion. The Committee on Foreign Investment in the United States (CFIUS) has increased its enforcement posture, ordering divestiture in several cases and expanding jurisdiction over real estate transactions near national security-sensitive sites. For Missouri companies considering foreign investment or acquisition by foreign buyers, CFIUS review should be factored into deal planning. Companies engaged in cross-border mergers should be particularly attentive to these developments.

Compliance program expectations rising. Federal enforcement agencies increasingly expect companies to have robust, documented compliance programs — not just policies on paper. Voluntary self-disclosure, cooperation, and demonstrated remediation carry significant weight in penalty mitigation. Companies without a formal export compliance program face greater enforcement risk than ever before.

Frequently Asked Questions

How do I know if my product requires an export license?

Start by classifying your product against the Commerce Control List (for EAR-controlled items) and the United States Munitions List (for defense articles). If your product has an ECCN, check the country chart in Supplement No. 1 to Part 738 of the EAR to determine if a license is required for your destination. If you are uncertain about classification, you can submit a commodity classification request to BIS or a commodity jurisdiction request to DDTC. OTT Law assists Missouri manufacturers with product classification and licensing analysis.

What is a deemed export and does it apply to my company?

A deemed export occurs when controlled technology or software source code is released to a foreign national in the United States. If your company employs foreign national engineers, scientists, or technicians who have access to EAR-controlled or ITAR-controlled technology, deemed export rules likely apply. You may need an export license for each foreign national's access to controlled information, and you should implement a Technology Control Plan to manage access.

What are the penalties for export control violations?

Criminal penalties under the EAR include up to $1 million per violation and 20 years imprisonment. ITAR criminal violations carry penalties of up to $1 million per violation and 20 years imprisonment. Civil penalties under the EAR can reach $374,474 per violation (as of the January 2025 inflation adjustment). OFAC civil penalties can reach approximately $377,700 per violation (also inflation-adjusted annually). In addition to financial penalties, companies may lose their export privileges, be debarred from government contracting, and suffer significant reputational harm.

Protect Your Business with Experienced Export Control Counsel

Navigating the intersection of EAR, ITAR, and OFAC sanctions requires specialized legal guidance — particularly as enforcement intensifies and regulations evolve. Whether you need help classifying your products, building a compliance program, responding to an enforcement inquiry, or evaluating the export implications of a cross-border transaction, OTT Law provides practical counsel tailored to Missouri manufacturers.

Contact us today at (314) 710-2740 for a free consultation.

This article is for informational purposes only and does not constitute legal advice. Every case is different. Contact OTT Law at (314) 710-2740 for a free consultation specific to your situation.