PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack PACE Technologies Export Compliance May 2014

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack It is the official company policy of Pace Technologies to fully comply with United States export regulations as well as adhere to exporting best practices.

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack Why does export compliance matter?

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack National Security Foreign Policy –Crime control –Anti-terrorism –Regional stability –Firearms convention Non Proliferation –Nuclear weapons –Chemical/biological weapons –Missiles

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack Non-compliance can carry serious consequences for both the exporter and the importer –Exporter Fines Loss of export privileges Possible jail time –Importer Possible inclusion to United States restricted parties list

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack How are exports classified? Export Control Classification Number (ECCN), administered by Bureau of Industry and Security, U.S. Department of Commerce –Five digit alpha-numeric designation used to determine if an export license is required –To date all Pace Technologies products have been determined to be EAR99, or not listed on the Commerce Control List (CCL) –EAR99 items do not require an export license (No License Required – NLR) as long as the end user is not in an embargoed or sanctioned country, is not a party of concern, or in support of a prohibited end-use

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack Rules concerning non-licensed exports Export Administration Regulations (EAR) Section 736, General Prohibitions –General Prohibitions 4 through 10 apply to non- licensed exports (EAR99)

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack General Prohibitions 4 through 10 4: Exporter may not ship to entities on the Consolidated List –Denied parties from several United States departments consolidated on one list –The Consolidated List can be found at the U.S. Export resource website:

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack General Prohibitions 4 through 10 5: Exporter may not export without a license (NLR) items subject to the EAR Part 744. –End-user and end-use based restrictions –Non-proliferation Nuclear uses Conventional and chemical/biological weapons Rocket/missile technology Unmanned air vehicles (UAV) Certain cameras and microprocessors China military

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack General Prohibitions 4 through 10 6: Exporter may not, without a license or license exception export to a country that is embargoes by the United States –Cuba –Iran –North Korea –South Sudan –Syria

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack General Prohibitions 4 through 10 7: United States citizens may not (without a license) support weapons proliferation

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack General Prohibitions 4 through 10 8: Exported items may not (without a license) be routed through one of the following countries: Armenia Azerbaijan Belarus Cambodia Cuba Georgia Kazakhstan Kyrgyzstan Laos Mongolia North Korea Russia Tajikistan Turkmenistan Ukraine Uzbekistan Vietnam

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack General Prohibitions 4 through 10 9: Exporter may not violate terms and conditions of Export Administration Regulations 10: Exporter may not proceed with a transaction if knowledge that a violation has or is about to occur

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack Knowing the End User Pace Technologies is accountable for our products from “cradle to grave” BIS 711 or End Use Statement required for all transactions

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack Knowing the End User

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack Schedule B Codes Schedule B Codes are administered by the United States Census Bureau –Utilized to track the amount of trade goods being exported from the United States –Schedule B Codes are based upon the Harmonized Tariff System (HTS) but use 10 digit codes rather than six digits

PACE Technologies – 3601 E. 34 th St. Tucson, AZ Telephone: FAX: ExitNextBack Electronic Export Information (EEI) Filing Administered by the United States Census Bureau Carrier or Freight Forwarder files the EEI with United States Customs and Border Protection (CBP) Required when the value of a single commodity is $2,500 (USD) or greater of if an export license is required to export the commodity –Shipments to Canada do not require an EEI filing regardless of commodity value Shipments cannot be ‘broken up’ to avoid an EEI filing If a Freight Forwarder is being utilized the forwarder must provide proof of EEI filing to Pace Technologies if applicable

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