Export controls

General controls

What general controls are imposed on exports?

Export controls serve multiple purposes, such as guarding national security, protecting the economy and supporting national foreign policy. As a result, different government agencies have different rules and lists specifying who or what is considered export-sensitive and where export controls apply. Most US exports, however, take place under expressly defined exceptions or waivers and do not require a specific export licence or other special authorisation. Export licences are only required in certain situations involving national security, foreign policy and terrorist concerns. Additionally, certain places, as well as denied persons and organisations, are subject to additional restrictions.

Government authorities

Which authorities handle the controls?

The US Department of Commerce - Bureau of Industry and Security (BIS) (www.bis.doc.gov) is responsible for implementing and enforcing the Export Administration Regulations (EAR), which regulate the export and re-export of most commercial items. The government often refers to the items and products that the BIS regulates as dual-use - items that have both commercial and military or proliferation applications - but purely commercial items without an obvious military use are also subject to the EAR.

The US Department of State, Directorate of Defence Trade Controls (www.pmddtc.state.gov) has authority over defence articles and defence services, under the International Traffic in Arms Regulations (ITAR).

The US Treasury, Office of Foreign Assets Control (OFAC) (www.treasury.gov), prohibits or restricts trade with a list of countries and an ever-growing directory of individuals and companies.

The Department of Energy’s US Nuclear Regulatory Commission (www.nrc.gov) controls the export and re-export of nuclear materials, nuclear technology and technical data for nuclear power.

Special controls

Are separate controls imposed on specific products? Is a licence required to export such products? Give details.

The US Department of State controls the export of ‘defense articles and defense services’ under the ITAR. Items in this category to be export-controlled are placed on the US Munitions List, which is maintained by the Department of State in conjunction with the US Department of Defense. This list includes such obvious things as firearms, ammunition and explosives, but also military vehicles (land, air and sea); spacecraft (including non-military); military and space electronics; protective personnel equipment; guidance and control equipment; and components, auxiliary equipment and miscellaneous articles related to military equipment. Export of any item or technology on the US Munitions List requires specific authorisation from the Department of State. For practical purposes, the ITAR regulations dictate that information and material pertaining to defence and military-related technologies may only be shared with US persons if approval from the US Department of Defense is received or special exemption is used.

Dual-use items are regulated under the EAR, based on the Commerce Control List maintained by the BIS. The export control provisions of the EAR are intended to serve the national security, foreign policy, non-proliferation and short-supply interests of the US and, in some cases, to carry out its international obligations. Some controls are designed to restrict access to dual-use items by countries or persons that might apply such items to uses inimical to US interests. The EAR also include some export controls to protect the US from the adverse impact of unrestricted export of commodities in short supply.

The Department of Energy’s US Nuclear Regulatory Commission controls the export and re-export of nuclear materials, nuclear technology and technical data for nuclear power.

Supply chain security

Has your jurisdiction implemented the WCO’s SAFE Framework of Standards? Does it have an AEO programme or similar?

The CBP has taken a lead role in the development of international standards in customs security, including the adoption of the World Customs Organization’s SAFE Framework. In this leadership role, the CBP has developed the US Customs-Trade Partnership Against Terrorism (C-TPAT), a voluntary government-business initiative to build cooperative relationships that strengthen international supply chain and US border security. The C-TPAT engages with industry by providing certifications to companies that voluntarily agree to adopt and integrate the programme’s security guidelines into their supply chains. The programme is open to all parties participating in the movement of international goods, including carriers for ocean, air, rail and road; and importers, foreign manufacturers, brokers, consolidators, ocean transportation intermediaries, port authorities and terminal operators (see www.cbp.gov/border-security/ports-entry/cargo-security/ctpat).

The Container Security Initiative (CSI) is a programme through which the US CBP negotiates bilateral cargo security agreements with the governments of US trading partners to establish procedures for screening and inspecting high-risk maritime cargo containers before they are loaded aboard vessels bound for the US. The CSI is now operational at 58 ports in North America, Europe, Asia, Africa, the Middle East, and Latin and Central America (see www.cbp.gov/border-security/ports-entry/cargo-security/csi/csi-brief).

Applicable countries

Where is information on countries subject to export controls listed?

In the Commerce Country Chart, the EAR maintain lists of every country subject to export controls and the reasons for the listing (see www.bis.doc.gov/index.php/regulations/export-administration-regulations-ear).

The ITAR includes a list of ‘proscribed countries’ that are subject to US arms embargoes. The State Department maintains a general policy of denying licence applications for exports of ITAR-controlled items to the proscribed countries. The list of ITAR-proscribed countries, which is available at www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_country_landing, is significantly broader than the list of countries subject to US economic sanctions (see question 29).

OFAC administers and enforces economic and trade sanctions against targeted countries for particular foreign policy and national security reasons. The list is subject to change at any time. A current list of OFAC sanctions programmes and additional guidance regarding prohibited transactions is available at www.ustreas.gov/ofac.

Named persons and institutions

Does your jurisdiction have a scheme restricting or banning exports to named persons and institutions abroad? Give details.

The US government provides a downloadable file that consolidates the export screening lists of the Departments of Commerce, State and the Treasury into one spreadsheet as an aid to industry in conducting electronic screens of potential parties to regulated transactions at http://2016.export.gov/ecr/eg_main_023148.asp.

Penalties

What are the possible penalties for violation of export controls?

The penalties are provided for under the follow legislation:

  • International Traffic in-Arms Regulations (ITAR)
    • up to $1 million per violation or imprisonment of up to 20 years, or both pursuant to 22 USC 2778(c).
      • Export Administration Regulations
        • Export Administration Act of 1979
          • criminal: up to $1 million per violation or imprisonment of up to 20 years, or both; and
          • administrative: up to $11,000 per violation or $120,000 per violation for items involving national security.
        • International Emergency Economic Powers Enhancement Act
          • criminal: up to $100,000 per violation or imprisonment of up to 20 years, or both; and
          • administrative: up to the greater of $250,000 per violation or twice the amount of the transaction.
  • Office of Foreign Assets Control
    • Trading with the Enemy Act of 1917, 50 USC, section 5
      • criminal (wilful violation): up to $1 million per violation, and up to $100,000 in individual fines, per violation or imprisonment of up to 10 years, or both;
      • criminal (knowing violation): up to $100,000 or up to 10 years in prison, or both, per violation; and
      • civil: up to of $65,000 per violation.
      • International Emergency Economic Powers Act, 20 USC section 1701
        • criminal: up to $1 million per violation or imprisonment of up to 20 years, or both; and
        • civil: up to $250,000 per violation or twice the amount of the transaction that is the basis of the violation, whichever is the greater.