Overview of U.S. Export Controls & Regulations Presented by Robert Stackpole International Trade Specialist
Questions to Answer • What are my responsibilities as the exporter • Do I need an export license • How do I get an export license • What are the consequences of not complying with export regulations • Why do we have export regulations
Exporter Responsibilities • It is the exporter’s responsibility to be aware of and comply to all existing and future regulations of any and all U.S. government agencies controlling exports from the U.S. • Exporting is a Privilege not a Right
Responsibilities of the Exporter at a Minimum • Lists to Check www.bis.doc.gov ( Denied Persons List, Unverified List, Entity List, SDN List, Debarred List) 2. Automated Export System (AES) 3. Due Diligence 4. Export License Requirements
Automated Export System • Replaces the Shipper’s Export Declaration (SED) Required For: • Any Shipment over $2500 per schedule B number • Any Time a license is required • From the U.S. to any foreign country including U.S. territories such as Puerto Rico or the U.S. Virgin Islands
Due Diligence Questions you have to ask • Who am I shipping to • Where are they located • What am I shipping ? • What is it going to be used for ?
Due Diligence is Required Commonly heard phrases: • It’s NLR (No License required) • This is the way we have been doing it for 20 years • The government told me I could do it • That is what we always put on the document • The license takes too long, ship first then we’ll get the license • The forwarder told me to do it this way
Export Licensing Overview • Do I Need a License to Export – Maybe • The Bureau of Industry and Security (BIS) is responsible for implementing and enforcing the Export Administration Regulations (EAR), which regulate the export and reexport of most commercial items. BIS regulates "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.
Export Controls Overview • The EAR do not control all goods, services, and technologies. Other U.S. government agencies regulate more specialized exports. • For example, the U.S. Department of State has authority over defense articles and defense services
JurisdictionUS Gov’t Agencies regulating exports US Dept of State US Congress US Dept of Commerce White House US Dept of Defense Joint Staff Defense Security Cooperation Agency Military Services Department of Homeland Security Missile Defense Agency Alcohol Tobacco Firearms US Customs US Dept of Agriculture National Security Council US Dept of Energy US Trade Representative US Dept of Justice Intelligence Community Nuclear Regulatory Commission NASA
What is Controlled for Export/Re-export? • Commodities • Software • Technology • Technical Data
How does an Export Occur? • Taking Products or Data out of the US; Sending Products or Data out of the US; • Release of Technology or Source Code (including orally or visually) to a non-US person, in the US or abroad; (Deemed Export) • Re-exporting –Sending US products or data from one country to another outside the US; or to a third party or third nationality.
How an Export Occurs • Tangible Shipments • Hand Carrying Products • Electronic transmission (fax, email) • Oral Conversations • Presentations open to the public • Publishing articles • Offshore procurement/sourcing (build to print) • Access by foreign person to technical information on computer servers • Foreign Visitors ( meetings, plant tours) • Trade Shows (US and Foreign)
Export License Overview • Which Government Organization has Jurisdiction over my products or services? • Does my product/service have an Export Control Classification Number (ECCN) • Does my product/service have an exemption or exception
Determining Jurisdiction • Two ways to determine Jurisdiction: Self Determination (Check with Manufacturer) Official USG Determination • State and Commerce Dept. regulations are VERY different • Identifying the proper jurisdiction is KEY
Structure of the ECCN • A 202 1 Category A Product Group 202 Type of Control The ECCN is an alpha-numeric code, e.g., 3A001, that describes a particular item or type of item, and shows the controls placed on that item.
Commerce Control List • 10 Categories – 5 Product Groups • 0 = Nuclear materials, facilities and equipment (and miscellaneous items)1 = Materials, Chemicals, Microorganisms and Toxins2 = Materials Processing3 = Electronics4 = Computers5 = Telecommunications and Information Security6 = Sensors and Lasers7 = Navigation and Avionics8 = Marine9 = Propulsion Systems, Space Vehicles, and Related Equipment A. Systems, Equipment and ComponentsB. Test, Inspection and Production EquipmentC. MaterialD. SoftwareE. Technology
ECCN 0A979 Police helmets and shields; and parts, n.e.s. License Requirements Reason for Control: CC (Crime Control) Check Country Box For Assistance: 202-482-4811
Reasons for Control AT= Anti-Terrorism NP= Nuclear Nonproliferation CB= Chemical & Biological NS= National Security Weapons RS= Regional Stability CC= Crime Control SI= Significant Item CW= Chemical Weapons SL= Surreptitious Listening Convention SS= Short Supply EI= Encryption Item UN= United Nations Embargo FC= Firearms Control MT= Missile Technology
Background of U.S. Export Controls: • Export Controls date back to the Revolutionary war : First Continental Congress- Importation of British goods illegal, then export of goods illegal. • Since then Legislation: Embargo Act, Trading with the Enemy Act, Neutrality Act, Export Control Act, Export Administration Act , Arms Export Control Act • Rationale for Control: Not giving Aid and comfort to the nation’s enemies • Through these Acts the U.S. effectively divided jurisdictional control over the export of goods and technology into two separate and distinct bureaucracies, one for military exports and one for dual –use or civil exports
U.S. Export Control Terms • Controlled- The U.S. Government has cognizance over the export of products or the associated technology, or technical data • Jurisdiction- Different USG agencies have control over different types of products- * First question in determining export requirements • Authorization- The USG permission to export. Typically a license, agreement, or an exemption or exception to the license requirement. • Exemption- Department of State • Exception- Department of Commerce • Classification- If item or technology is Commerce controlled, it must be classified with the appropriate ECCN, if it is State Dept. controlled then it must have a “category” associated with it.
What is “Controlled Information”? State Department calls it technical data or defense services “Information which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of a defense article”
Requirements? The International Traffic in Arms Regulations (ITAR) 22 C.F.R. Chapter I, Subchapter M, Part 122.1 “(a) Any person who engages in the United States in the business of either manufacturing or exporting defense articles or furnishing defense services is required to register with the Directorate of Defense Trade Controls.”
Next Step ITAR Controlled • Register with DDTC • Set up control plan and record keeping policy • Lodge licenses with customs EAR Controlled • Determine ECCN • Determine whether licensing exceptions are available • Record Keeping
Best Practices For All Products and Technology: Document Determinations • Identify Jurisdiction • Licensing Requirements • HTS Code • ECCN if Commerce controlled • Customs Requirements • Person who did the analysis • Date analysis is made
Destination Control Statements State Department: • “These commodities are authorized by the U.S. Government for export only to [country of ultimate destination] for use by [end-user]. They may not be transferred, transshipped on a non-continuous voyage, or otherwise be disposed of in any country, either in their original form or after being incorporated into other end-items, without the prior written approval of the U.S. Department of State.” Commerce Department: • “These commodities, technology or software were exported from the United States in accordance with the Export Administration Regulations. Diversion contrary to U.S. law prohibited.”
Export Management Compliance Program • Comply with all Regulatory Requirements for Exporting • Corporate Commitment and Policy for Export Compliance • Identification of Responsible Parties within Company • Understanding and Awareness of Regulations and Training • Identification and Tracking of controlled data and goods • Screening Mechanism to identify denied parties and destinations • Record Keeping Policy and Procedure for export control • Identification and Disclosure of Violations
Exporting is a Privilege not a Right That privilege can be taken away when it is determined that an export occurred without permission and it is detrimental to the United States of America.
Thank You! Robert Stackpole International Trade Specialist Phone: 205-731-1333 Robert.Stackpole@mail.doc.gov