Transit and Transshipment Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies WA Practical Workshop, June 27-28, 2016

Transit - Transshipment - Reexport Transit:Transit: – Items from one country are shipped through (or pass through) a second country en route to a third country – The shipment does not clear customs in the second country Transshipment:Transshipment: –Items from one country are offloaded in the second country en route to a third country, which is the intended destination at the time of export from the first country –Typically in a bonded warehouse or free trade zone –The shipment does not clear customs in the second country Reexport: –Items are shipped between two foreign countries after clearing customs in the first foreign country –If the items are subject to export controls, licensing requirements will apply to the re-export

What is a Free Trade Zone? TraditionalTraditional –Physical Free Trade Zone –Bonded Warehouse –Free Port HybridHybrid –“Borderless" Economic Zones – Special Industrial Parks – Forwarders and Cargo Agents

What is not a free trade zone? Free Trade Agreements (FTAs)Free Trade Agreements (FTAs) –Bilateral or multilateral agreements which cover customs and market access issues For example, the North American Free Trade Agreement (NAFTA) a treaty signed by Canada, Mexico and the United States Customs Mutual Recognition Agreements and Customs UnionsCustoms Mutual Recognition Agreements and Customs Unions –Bilateral agreements which allow for closer cooperation between Customs organizations Generally do not affect the process in a free trade zone For example, the EU Customs Union

Licensing requirements in U.S. FTZs WA-listed items that enter the U.S. economyWA-listed items that enter the U.S. economy –No export control license required for movement within the U.S. –WA-listed munitions may require domestic permits based on federal and state/local laws WA-listed dual-use items that are moving in transit through the U.S.WA-listed dual-use items that are moving in transit through the U.S. –No export control license required –Prohibited from being exported to certain countries –Entry must be made at a U.S. Customs & Border Protection Office Transportation and Exportation (T.&E.) Customs entry Immediate Exportation (I.E.) Customs entry –The U.S. does not issue separate authorizations for transit and/or transshipment within the U.S. WA-listed munitions moving in transit through the U.S. to a third countryWA-listed munitions moving in transit through the U.S. to a third country –Subject to the U.S. Department of State licensing authority Temporary import license required, with certain limited exceptions

Reexport of WA-listed items WA-listed items that enter the U.S. economy and then are exportedWA-listed items that enter the U.S. economy and then are exported –May require a license For WA-listed dual-use items subject to the jurisdiction of the U.S. Department of Commerce, the applicant must be the exporter, who is the U.S. principal party in interest with the authority to determine and control the sending of items outside the U.S. –May be eligible for a License Exception based on the destination, end-use and end-user For WA-listed munitions items subject to the jurisdiction of the U.S. Department of State, the applicant must be a U.S. person, and the application must be accompanied by a certified letter signed by an empowered official, who, inter alia, must be directly employed by the applicant or a subsidiary and is legally empowered in writing by the applicant to sign license applications on behalf of the applicant The U.S. may authorize the transit and/or transshipment of a WA-listed item through another country’s territory on an export licenseThe U.S. may authorize the transit and/or transshipment of a WA-listed item through another country’s territory on an export license

Questions? Donald Pearce Special Agent – Office of Export Enforcement