Export Controls and EAR Compliance for Turkish-U.S. Technology Transfers

When a U.S. company shares technology, software, or technical data with a Turkish partner, subsidiary, or employee — whether physically or electronically — U.S. export control laws may apply. The two primary regimes are:

• Export Administration Regulations (EAR): Administered by the Bureau of Industry and Security (BIS) within the Department of Commerce. Covers dual-use goods, software, and technology with both commercial and potential military applications.
• International Traffic in Arms Regulations (ITAR): Administered by the Directorate of Defense Trade Controls (DDTC) within the Department of State. Covers defense articles, defense services, and related technical data on the U.S. Munitions List (USML).

For most Turkish-U.S. technology transfers in commercial contexts, the EAR is the primary framework. This guide focuses on EAR compliance, with an overview of ITAR considerations.

The EAR's definition of "export" is broader than the physical shipment of goods. An export includes:

• Physical export: Shipping a controlled item from the U.S. to a foreign country
• Deemed export: Releasing controlled technology or source code to a foreign national inside the United States — including sharing technical information with a Turkish employee or visitor at a U.S. facility
• Re-export: Transferring a U.S.-origin item from one foreign country to another
• Electronic transmission: Emailing, uploading, or otherwise transmitting controlled technology to a foreign recipient

The deemed export rule is critical for Turkish-American companies: If a U.S. company employs Turkish nationals and shares controlled technology with them, that sharing may constitute a deemed export to Turkey — requiring a license if Turkey is a restricted destination for that technology.

Every item subject to the EAR is assigned an Export Control Classification Number (ECCN) on the Commerce Control List (CCL). The ECCN determines:

• Whether a license is required
• Which countries require a license
• Which end uses and end users are prohibited

ECCNs are organized into ten categories:

• 0: Nuclear and miscellaneous
• 1: Materials, chemicals, microorganisms, and toxins
• 2: Materials processing
• 3: Electronics
• 4: Computers
• 5: Telecommunications and information security
• 6: Sensors and lasers
• 7: Navigation and avionics
• 8: Marine
• 9: Aerospace and propulsion

Items not on the CCL are designated EAR99 — they generally do not require a license for export to most destinations, including Turkey, unless the end user or end use is restricted.

Turkey is not subject to a comprehensive U.S. embargo. However:

• Turkey is not a member of all multilateral export control regimes (it is a member of the Wassenaar Arrangement but not the Nuclear Suppliers Group or Australia Group for all purposes)
• Certain sensitive technologies require a license for export to Turkey even without an embargo
• End-user and end-use restrictions apply regardless of destination

A license is required when:

1. The item has an ECCN that lists Turkey (or the relevant country group) as requiring a license for the applicable reason for control
2. The end user is on a restricted party list (Entity List, Denied Persons List, Unverified List, Specially Designated Nationals list)
3. The end use is prohibited (weapons of mass destruction, military end use in certain countries)

BIS provides several license exceptions that may allow exports without a license:

• ENC: Encryption items
• TSR: Technology and software under restriction
• TMP: Temporary exports
• RPL: Replacement parts
• STA: Strategic Trade Authorization (for exports to close allies)

Turkish companies and their U.S. partners should work with export counsel to determine whether a license exception applies before proceeding with a technology transfer.

Before any export or deemed export, U.S. exporters must screen the recipient against U.S. government restricted party lists:

• Entity List (BIS): Foreign entities subject to license requirements due to national security concerns
• Denied Persons List (BIS): Individuals and companies denied export privileges
• Unverified List (BIS): Entities whose bona fides BIS has been unable to verify
• Specially Designated Nationals (SDN) List (OFAC): Individuals and entities subject to sanctions
• Debarred List (DDTC): Entities debarred from ITAR-controlled transactions

Screening should be conducted before each transaction and whenever a new business relationship is established. Several commercial screening services automate this process.

ITAR controls defense articles and services on the U.S. Munitions List. Key points for Turkish-U.S. transactions:

• Turkey is a NATO ally but is not on the ITAR exemption list (unlike Canada and some other close allies)
• Exports of ITAR-controlled items to Turkey generally require a State Department license
• Turkish companies that manufacture or develop products incorporating ITAR-controlled components must comply with ITAR re-export restrictions
• ITAR deemed exports: Sharing ITAR-controlled technical data with Turkish nationals in the U.S. requires a license

Turkish defense and aerospace companies with U.S. partnerships should conduct a thorough ITAR analysis before any technology sharing.

1. Jurisdiction and classification: Determine whether items are subject to EAR or ITAR and obtain the correct ECCN or USML category.

2. Restricted party screening: Screen all customers, partners, and end users before each transaction.

3. License determination: Determine whether a license is required and, if so, apply for one or identify an applicable exception.

4. Written compliance policies: Document export compliance procedures, including who is responsible, how screening is conducted, and how records are maintained.

5. Training: Train all employees involved in technology transfers, sales, and business development on export control obligations.

6. Recordkeeping: Maintain export records for five years (EAR) or five years after the expiration of a license (ITAR).

7. Audits: Conduct periodic internal audits of export transactions to identify and remediate compliance gaps.

If a Turkish-U.S. company discovers a past export control violation, voluntary self-disclosure to BIS or DDTC can significantly reduce penalties. Companies that self-disclose, cooperate, and remediate typically receive substantially lower fines than those discovered through government investigation.

Export control violations carry severe penalties:

EAR criminal penalties: Up to $1 million per violation and/or 20 years imprisonment per violation

EAR civil penalties: Up to $364,992 per violation (adjusted annually for inflation) or twice the value of the transaction

ITAR criminal penalties: Up to $1 million per violation and/or 20 years imprisonment

ITAR civil penalties: Up to $1.3 million per violation

Debarment: Companies can be denied export privileges entirely, effectively ending their ability to conduct U.S.-origin technology business.

1. Classify before you transfer: Before receiving U.S. technology, ask your U.S. partner for the ECCN and confirm whether a license is required for transfer to Turkey.

2. Screen your own organization: If your company employs U.S. nationals or has U.S. operations, ensure you are not inadvertently re-exporting controlled technology to restricted parties.

3. Review joint venture agreements: Technology transfer provisions in joint venture and licensing agreements should address export control compliance obligations explicitly.

4. Engage export counsel early: Export control analysis is most effective — and least costly — when conducted before a transaction, not after a violation has occurred.

U.S. export controls are a significant compliance obligation for Turkish companies that receive, use, or re-export U.S.-origin technology. The EAR's broad definition of "export" — including deemed exports to Turkish nationals in the U.S. — means that compliance obligations arise in contexts that may not feel like traditional "exports."

ULF New York advises Turkish companies and Turkish-American joint ventures on EAR and ITAR compliance, export license applications, restricted party screening programs, and voluntary self-disclosure. Contact us to assess your export control exposure.

This article is for informational purposes only and does not constitute legal advice. Export control regulations are subject to frequent change; consult qualified export counsel for advice specific to your situation.