The ever expanding global economy has caused many companies to become exporters of goods and services. As such, knowledge of United States export licensing requirements is essential to avoid potential civil and/or criminal penalties. Export licenses are issued for individual transactions determined by the product or service to be exported, the destination country, the end use of the product or service, and the end user of the product or service. Multiple federal agencies regulate specific types of exports.
The Department of Commerce through the Bureau of Industry and Security (BIS) implements and enforces the Export Administration Regulations (EAR). The EAR regulates the export and re-export of commercial items, and some military items. Many items regulated by BIS are characterized as “dual-use” because they have both commercial and military applications.
Does my product need an export license?
The key in determining whether an export license is required from the United States Department of Commerce is knowing whether the item has a specific Export Control Classification Number (ECCN). ECCN’s are listed in the Commerce Control List (CCL). If an item or service to be exported has no ECCN, it is designated as EAR 99 for export purposes and no license is required. Such items generally consist of low technology consumer goods. However, if the proposed export is to an embargoed country, to an end-user of concern, or in support of a prohibited end-use, a license will then be required if the export is permitted at all. Thus, it is critical to identify as accurately as possible the destination, end-user, and purpose of the exported item or service in order to determine if a license is required. When in doubt, the US government is available to provide guidance prior to export.
The export of military goods may be subject to licensing by the Directorate of Defense Trade Controls at the Department of State (DDTC). There are also special rules for exports to certain prohibited countries and organizations. The Office of Foreign Assets Controls (OFAC) in the Treasury Department administers and enforces economic and trade sanctions against certain foreign countries such as Cuba and North Korea, against terrorism sponsoring organizations, and against international narcotics traffickers.
US export laws are complicated and the restrictions on where an export can go and who may receive an export change regularly. Training, internal compliance programs, and qualified assistance in the way of a customs broker or counsel can greatly assist companies in navigating the law. It is important to fully investigate whether a product or good to be exported requires a license and the aforementioned federal agencies are available in advance of any export for guidance.