1. Complying with U.S. Export Controls
Bureau of Industry and Security Department of Commerce
Bureau of Industry and Security Department of Commerce
John Bushnell
July 25, 2013
QUE Group 2013 Conference, San Diego, CA

2. Our Contact Information
Bureau of Industry and Security
Western Regional Office
2302 Martin Street, Suite 330
Irvine, California 92612 T: F:
Northern California Branch
160 West Santa Clara Street, Suite 725
San Jose, California 95113 T: F:

3. Overview BIS Mission Statement To advance U.S. national security,
foreign policy, and economic objectives
by ensuring an effective export control
and treaty compliance system and
promoting continued U.S. strategic
technology leadership

4. Transactions we control
BIS regulates “exports” and
“reexports” of “items” “subject to the
EAR” in addition to certain activities of U.S. persons.

5. Authority to Administer Controls
Export Administration Act (EAA)
International Emergency Economic Powers Act (IEEPA)
Export Administration Regulations (EAR)
BIS
EAR

6. Reasons Why We Control Exports
National Security
Foreign Policy
Crime control
Anti-terrorism
Regional Stability
Non Proliferation
Nuclear weapons
Chemical/biological weapons
Missiles

7. Multilateral Export Control Regimes
Wassenaar Arrangement
Supplement 1 to Part 743
Missile Technology Control Regime (MTCR)
Supplement 1 to Part 740 (A:2)
Nuclear Suppliers Group (NSG)
Supplement 1 to Part 740 (A:4)
Australia Group (AG)
Supplement 1 to Part 740 (A:3)

8. Export Administration Regulations
Designed to implement the Export Administration Act
Apply to commercial and some military items
Items that can be used in both commercial and military/strategic applications
Also apply to items that have solely civil uses
Other agencies have jurisdiction over some exports

9. How do I determine my regulatory requirements?
Depends upon:
1. What is the product?
2. Where is the product going?
3. Who is the end user?
4. What is the end use?

10. End use concerns Nuclear Section 744.2 Chemical/Biological Weapons
Missile
Section 744.4
Support of these activities by a U.S. Person
Section 744.6

11. What is an Item? (Section 734.2)
Software
Technical Data
Commodity

12. Definitions and Terms What is an export?
A shipment out of the United States
An electronic transmission out of the United States
Release of technology to a foreign national in the United States
Technology – specific information necessary for the “development”, “production”, or “use” of a product

13. What is a Reexport?
A shipment of a U.S. origin item from one foreign country to another
A shipment of a foreign produced item containing U.S. origin parts, from one foreign country to another
Shipment from one foreign country to another of an item manufactured abroad based on U.S. origin technology

14. Who is the Exporter? (Part 772)
The person in the United States who has the authority of a principal party in interest to determine and control the sending of items out of the United States.

15. IMPORTANT CONCEPT:
Having an Export Control Classification Number (ECCN) does NOT automatically mean that a license is required to all destinations
Being classified as EAR99 does NOT automatically mean that a license is NOT required to a particular destination

16. Are You Subject to the EAR? (Continued)
U.S. Persons & Foreign Nationals
Certain activities of U.S. persons
(Part 744)
Release of certain technology and source code to foreign nationals in the U.S. (“Deemed Exports” (Part 734))

17. Deemed Exports (Section 734.2(b)(2)(ii))
The release of technology or source code subject to the EAR to a foreign national in the United States is “deemed” to be an export to the home country of the foreign national.

18. Deemed Exports (Section 734.2(b)(2)(ii))
Situations that can involve release of U.S technology or software include:
Tours of laboratories
Foreign national employees involved in
certain research, development, and
manufacturing activities
Foreign students or scholars conducting
research
Hosting of foreign scientist

19. Deemed Exports (Section 734.2(b)(2)(ii))
Export Enforcement Note
Deemed Export violations are one of the most common types of violations
Because the violation typically occurs in the U.S. and all parties are typically in the U.S., this is very often the easiest to prove in a court of law.

20. Exempted from the Rule (Section 734.2(b)(2)(ii))
Any foreign national is subject to the deemed export rule except:
A person granted U.S. citizenship;
A person granted permanent residence status (i.e., “Green Card” holders);
A person granted status as a “protected individual” under 8 U.S.C. 1324b(a)(3)

21. What Kind of Authorization is Required to Export?
NO LICENSE REQUIRED (NLR)
LICENSE EXCEPTION
LICENSE or
VEU

22. ON LINE ACCESS www.bis.doc.gov BIS home page E-mail notifications
(Seminars, Regulatory changes, etc.)
SNAP-R
(Online Licensing and other requests)

23. Commerce Control List & Country Chart

24. Commerce Control List (Part 738 and Part 774, Supplement No. 1)
Contains lists of items subject to licensing authority of BIS
Each entry is called Export Control Classification Number (ECCN)
Five alpha-numeric characters
Items listed in terms of technical parameters

25. ECCN Structure (Section 738.2)
Category
Reason for Control
3A001
Sequential
Numbering
Product Group

26. Ten Categories in the CCL (0 to 4)
0. Nuclear Materials, Facilities & Equipment and Miscellaneous
1. Materials, Chemicals, Microorganisms & Toxins
2. Materials Processing
3. Electronics Design, Development and Production
4. Computers
e.g.: 3A001

27. Ten Categories in the CCL (5 to 9)
5. Telecommunications (PART 1) and
Information Security (PART 2)
6. Sensors and Lasers
7. Navigation and Avionics
8. Marine
9. Propulsion Systems, Space Vehicles and Related Equipment
e.g.: 5A001

28. ECCN Structure- Product Groups
5A B C101
5D E101
Equipment, assemblies & components
Test, inspection & production equipment
Materials
Software
Technology

29. Finding Your ECCN
Check the Commerce Control List (CCL) alphabetic index
Review general characteristics of item to arrive at Category and Product Group
Match characteristics of item with ECCN and subparagraph
BIS
CCL

30. Classification Request Requirements (Section 748.3)
Use SNAP-R the BIS online request system (discussed in detail later)
Identify specific items of concern
Attach Detailed Technical Specifications as a .pdf

31. Working with the Country Chart (Part 738, Supplement No. 1)
Contains licensing requirements based on destination and reason for control
Used with the CCL to determine if you need a license

32. DEGREE OF CONCERN
REASON FOR CONTROL
PDF
VERSION

33. EASIER TO READ WITH TWO WINDOWS OPEN
E-CFR VERSION
******
EASIER TO READ WITH TWO WINDOWS OPEN

34. Using the Commerce Control List with the Country Chart
Determine ECCN
Check reasons for control
Match specific controls to country chart column
If a territory, possession, or department of a foreign country is not listed on the country chart, the export or reexport is deemed to be an export to the foreign country of which it is a territory, etc.
Is there an “X” in the box under that specific Reason for Control?? If so, there is a license requirement.

35. EAR99
If an item subject to the EAR is NOT described by any ECCN, it is designated EAR99.
In most cases, the export of an EAR99 item can be completed using the license authorization NLR (No License Required),
but …
Check the General Prohibitions AND the “Lists to Check” for other possible licensing requirements.

36. TEN GENERAL PROHIBITIONS Part 736
DESCRIBE EXPORTS, REEXPORTS AND CONDUCT IN WHICH YOU MAY NOT ENGAGE WITHOUT A LICENSE, LICENSE EXCEPTION (IF AVAILABLE AND APPLICABLE) OR A DETERMINATION THAT A LICENSE IS NOT REQUIRED.

37. Ten General Prohibitions Part 736
General Prohibitions 1-10 apply to items having a specific ECCN
General Prohibitions 4-10 apply to items that are EAR99

38. FACTORS DETERMINING LICENSE REQUIREMENTS
1. WHAT IS THE PRODUCT?
2. WHERE IS THE PRODUCT GOING?
3. WHO IS THE END USER?
4. WHAT IS THE END-USE?

39. LICENSE EXCEPTIONS
Part 740

40. Important Concepts
After determining “License Requirements,” determine if there is an available mechanism for OVERCOMING that requirement. This potential mechanism is called a License Exception.
When the fire hose of information is turned onto the attendees, they very often miss the most important points. It is very important that they understand that very few products have an ECCN and it was for that reason that the 10% guess was made.

41. License Exceptions Part 740
Definition: An authorization that allows you to export or reexport, under stated conditions, items subject to the EAR that would otherwise require a license.
Each license exception bears a three letter symbol used for export clearance purposes.

42. Can You Use a License Exception?
Review general restrictions (Section 740.2)
Identify all applicable License Exception(s)
List based and transaction based
Use least restrictive exception that is available
Each “X” (license requirement) must be overcome

43. Strategic Trade Authorization
July 2011 through December 2012
105 companies have exported under STA
1,231 shipments under STA
41% (500) exports worth less than $2,500
$146.2 million worth of exports under STA

44. Strategic Trade Authorization
Top STA product categories (ECCNs)
Optical sighting devices (0A987)
Cameras (6A003)
Components for the International Space Station (9A004)
Non-fluorinated polymeric substances (1C008)
Electronic components (3A001)

45. Strategic Trade Authorization: STA (Section 740.20)
Authorizes the immediate export, reexport or transfer of most items to 36 specified countries AND the immediate export, reexport or transfer of many items to 8 additional countries.
Specifically excludes certain reasons for control AND certain specified ECCN’s in Categories 0, 1 and 9.
Review ALL individual ECCN entries for additional restrictions.

46. 36 STA-Eligible Countries Multiple Reasons for Control NS, CB, NP, RS, CC, SI
Argentina
Australia
Austria
Belgium,
Bulgaria
Canada
Croatia
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Iceland
Ireland
Italy
Japan
Latvia
Lithuania
Luxembourg
Netherlands
New Zealand
Norway
Poland
Portugal
Romania
Slovakia
Slovenia
South Korea
Spain
Sweden
Switzerland
Turkey
United Kingdom

47. 8 STA-Eligible Countries Reasons for Control NS ONLY
Albania
Hong Kong
India
Israel
Malta
Singapore
South Africa
Taiwan

48. Encryption matters please contact the BIS Encryption Hotline
For assistance with
Encryption matters please contact the
BIS Encryption Hotline

49. Join us tomorrow as the Journey Continues.49