Scenario: a precision-engineering firm in Bac Ninh machines components for a US customer; an electronics firm in Hai Phong imports US chips, assembles them and exports to third markets. Both may be caught by US export controls without knowing it — because US law follows the goods and technology, and does not stop at the US border. This article distinguishes the EAR/ITAR frameworks and maps the practical duties of Vietnam-based companies.
1. Two frameworks, two agencies, two levels of strictness
The EAR (Export Administration Regulations), administered by BIS (Bureau of Industry and Security, US Department of Commerce), governs dual-use items (civilian goods with potential military applications) and ordinary commercial items under the Commerce Control List (CCL); each item carries an ECCN, and items outside the CCL are EAR99 (note: EAR99 does not mean automatically licence-free — destination, end-user and end-use still matter). ITAR (International Traffic in Arms Regulations), administered by DDTC (Directorate of Defense Trade Controls, US Department of State) under the Arms Export Control Act, governs defense articles on the US Munitions List (USML) in 21 categories. ITAR is stricter in every respect: in classification, the USML takes precedence over the CCL — if it is on the USML, ITAR applies; there is no opting for the lighter EAR.
2. Where Vietnamese firms stumble: re-exports
US law controls not only exports from the US but also re-exports: a Vietnam-based company importing US components/chips, assembling them and exporting to a third country may need a BIS/DDTC licence for that export, depending on the ECCN/USML entry, destination and recipient. The classic scenario: importing US chips (ECCN 3A001 group), mounting them on boards and shipping to a restricted market — without checks, the Vietnamese company breaches the EAR even though the goods merely “passed through” Vietnam. Supply contracts with US vendors typically already impose re-export compliance duties — signing unread is self-binding.
3. Deemed exports: technology transfers to foreign nationals
“Export” under US law is not only shipping across a border. A deemed export is the release of controlled technology/drawings/source code to a foreign national — even inside the United States — deemed an export to that person’s country. For Vietnamese companies, the analogue: a Vietnamese engineer visiting a partner’s US plant is shown ITAR-controlled drawings, or a foreign expert at the Vietnamese plant accesses US-origin technology. Each case needs assessment: is the technology controlled, who is the recipient, is a licence required.
4. ITAR: registration and the red lines
Unlike the EAR (no registration), ITAR requires every US manufacturer, exporter and broker of defense articles to register annually with DDTC (Tier 1 fee: USD 3,000/year). For Vietnamese firms in US defence supply chains: never share ITAR technical data with unauthorised persons (including Vietnamese staff without authorisation — ITAR treats that as an export to Vietnam); never store ITAR data on ordinary commercial cloud lacking access controls; any violation can bring heavy penalties and blacklisting — meaning the loss of all US defence customers.
5. A compliance checklist for Vietnam-based companies
One, inventory every US-origin input (components, software, technology, drawings) and ask suppliers for ECCN/USML classifications. Two, screen partners and end destinations against US sanctions and denied-party lists. Three, put export-compliance clauses in customer and supplier contracts (no unauthorised re-exports, notification duties). Four, control technology access: need-to-know permissions and deemed-export training. Five, for defence chains: assess whether DDTC registration/agreements via the US partner are needed. Six, when in doubt — ask US export-control counsel before shipping; fixing a violation afterwards costs multiples more.
Frequently Asked Questions
Do EAR99 items need an export licence?
Not necessarily — but not automatically exempt either. EAR99 means outside the CCL, yet three factors still matter: destination (sanctioned/restricted countries), recipient (denied parties) and end-use (weapons, military). Hitting any of the three can still require a BIS licence.
Must a Vietnamese subcontractor to US defence customers register under ITAR?
DDTC registration falls on US manufacturers/exporters/brokers. A Vietnamese subcontractor typically does not register directly, but must honour every restriction flowed down by the US partner (no technical-data sharing, access controls) — breaching the contract means indirect ITAR breach and loss of the customer.
Is sharing drawings with Vietnamese engineers at the Vietnam plant a deemed export?
Deemed export strictly means releases inside the US to foreign nationals. But a Vietnamese company receiving US-origin technology still bears EAR/ITAR re-export duties on onward transfers (to other nationalities, abroad). Assess each case against the ECCN/USML entry.
How are US export-control violations punished?
BIS and DDTC can impose heavy administrative penalties (per violation), pursue criminal cases for wilful conduct, and blacklist offenders (denied persons) — cutting them out of US supply chains. For Vietnamese firms, the heaviest practical consequence is usually losing US customers and facing indemnity claims under contract compliance clauses.
This article has been quality-reviewed by the FLAW AI Legal Council