GOAL LMS LOGIN

Understanding the ITAR
‘See-Through Rule’, and How It Differs from the EAR

15th July 2025

If you’re working in aerospace, defence, space tech, or advanced manufacturing, navigating U.S. export controls can feel like untangling a web. Understanding these controls is more than just a legal checkbox, it’s central to your ability to operate globally, collaborate internationally, and commercialise innovation. Two critical pieces of this puzzle are the International Traffic in Arms Regulations (ITAR)’s ‘see-through rule’ and the Export Administration Regulations (EAR)’s treatment of integrated components and technology.

This post walks through how the U.S. regulates the integration of controlled parts, technology and software into foreign or commercial systems, and where the ITAR and EAR part ways in how they apply controls. We’ll also cover the important exemptions and exceptions you should be aware of, especially for Australian companies navigating these systems under the evolving Australian export controls framework.

What Is the “See-Through Rule” Under ITAR?

The see-through rule, formally known as the Integration of Controlled Items, is a principle under the ITAR that says:
If you integrate an ITAR controlled component, technical data and/or software into a broader system, even one intended for commercial use, the entire system may become subject to ITAR controls.

For example: Your company is developing a commercial unmanned aerial vehicle (UAV) for surveying applications. To meet a specific requirement, you incorporate an ITAR controlled sensor or targeting component. Because of the see-through rule, the entire UAV, regardless of its commercial design or use, is now treated as a defence article under ITAR.

This rule is not based on intent; it is based on the presence of controlled components and their integration into a system.

Why Does the See-Through Rule Matter?

The see-through rule is designed to prevent ITAR-controlled technologies from being exported indirectly, whether through finished systems developed with controlled technical data or embedded components or software. The U.S. government is particularly concerned about protecting sensitive defence technologies that could otherwise be reverse engineered or extracted.

This means that even one small, controlled article can trigger a significant regulatory burden, including:

  • Licensing requirements for export or reexport of the end item.
  • Restrictions on sharing technical data related to the entire system.
  • Limitations on who can access the item.
  • Risk of penalties if the item is handled improperly, even unintentionally.

When the ITAR See-Through Rule Doesn’t Apply

Though ITAR’s see-through rule is broad, there are specific exceptions in the regulations where integration of ITAR components doesn’t automatically make the larger item ITAR-controlled.

Category XV – Spacecraft and Satellites

Note 1 to Paragraph (a): Certain EAR controlled spacecraft (e.g., ECCNs 9A004 or 9A515) remain under the EAR, even if they include ITAR parts, a critical distinction for space companies.

Category XIX – Gas Turbine Engines

A note to Paragraph (d) clarifies that when integrated into EAR controlled aircraft (ECCN 9A610), some ITAR-controlled engines may also fall under the EAR, rather than ITAR.

Category V – Explosives and Energetic Materials

Note 3 to Category V: States that certain energetic materials integrated into EAR controlled items may be classified under ECCN 1C608 instead of being treated as ITAR.

These notes and exceptions are found throughout the USML and are vital when interpreting how the see-through rule is applied in real world projects.

Why It Matters for Your Business

Whether you’re developing spacecraft, drones, propulsion systems, or dual-use technologies, understanding these rules can:

  • Help you design products strategically to avoid unintended controls.
  • Influence how you source and integrate components.
  • Prevent costly export violations.
  • Enable smoother international collaboration and investment.

For Australian companies, this is especially relevant given the rollout of the new Australian export controls framework, which increasingly aligns with U.S. approaches. That means the implications of U.S. content and jurisdictional reach will only become more significant for companies in the region.

How the EAR Takes a Different Approach

Unlike the ITAR, the EAR takes a notably different approach. Under these regulations, items are generally classified based on the end item as a whole, not just based on a single controlled component or technology within it. In other words:

  • The EAR does not automatically ‘infect’ a product with control just because it includes a part or technology that would be controlled on its own.
  • Instead, the end-use, end-user, and the functionality of the final item drive classification and licensing decisions.
  • The EAR doesn’t automatically apply its most stringent controls to a finished product just because it contains controlled U.S. origin technology, unless specific exceptions apply (which we’ll discuss shortly).

Understanding the EAR’s De Minimis Rule

One of the EAR’s most business friendly features is the de minimis rule. This rule essentially allows foreign made products containing U.S. origin controlled articles to avoid becoming subject to the EAR, as long as:

  • The value of U.S. controlled content does not exceed 25% of the total value of the foreign product (in most cases), and
  • The destination country is not under a comprehensive U.S. embargo or similar restriction.

For exports to embargoed countries, the threshold drops to 10%, or in some cases, the de minimis rule doesn’t apply at all.

How De Minimis Works

Imagine you build a foreign manufactured drone that uses a U.S. component classified under the EAR. If the U.S. part accounts for less than 25% of the drone’s total value (and it’s not going to a sanctioned destination), then the drone itself is not subject to EAR licensing, meaning fewer restrictions on who you can sell to and where you can operate.

When the De Minimis Rule Doesn’t Apply

It’s important to note that there are several critical exceptions to the de minimis rule. These are areas where the U.S. government maintains tighter control and does not permit foreign end products to ‘escape’ regulation, no matter how small the U.S. content. These include the following:

  • 600-series and 9×515 ECCNs: These include items derived from the U.S. Munitions List (USML) or certain military and space items. Even small percentages of such content remain subject to the EAR.
  • Encryption items (Category 5, Part 2): can also be exempt from de minimis treatment.
  • Embargoed countries and prohibited end-users: Items that incorporate any controlled U.S. content might still be restricted, regardless of value, when destined for these jurisdictions.
  • WMD-related or military end-use concerns: These override de minimis calculations.

In short, not all U.S. origin technology that are classified under the EAR are treated equally, and not all foreign items with U.S. content qualify for de minimis relief.

Final Thoughts

The see-through rule under the ITAR, and its contrast with the EAR’s de minimis rule, underscores just how complex export control compliance can be. A single part or piece of technical data can shift your entire regulatory posture. And while there are exceptions, those exceptions are nuanced and often misunderstood.

If you’re working with U.S. origin technology, incorporating sensitive components or software, or collaborating internationally, it’s essential to classify accurately, plan for licensing early, and understand where the grey areas are.

Need help navigating this? Whether you’re launching satellites, prototyping UAVs, or moving dual-use software across borders, our Goal Group export control specialists can guide you through these frameworks, without slowing innovation.

Author: Amanda Mason – Security, Trade and Industry Consultant