The U.S. Department of Commerce restricts the export of certain items and data to protect national security. The Export Administration Regulations (EAR), which control certain exports and technology, are part of this process.
This article provides an overview of EAR compliance but is not a substitute for consulting EAR regulations or following advice from an international business law attorney.
What Is an Export?
Exports are the movement of goods outside the country of origin, both physical items and data. Exporting may be completed via shipping container, regular mail, fax, internet downloads, or even transference of proprietary information via a phone conversation.
Any technology or data delivered to a foreign country, or even a foreign national physically located in the U.S., is considered an export and subject to security and export regulation.
EAR regulations consider an item an export even if it’s being returned to another country or is only leaving the U.S. temporarily.
Regulatory Agencies that Control Exports
There are many U.S. export administration regulations, of which EAR regulations are just one type. Each agency has its standards and restrictions.
The Bureau of Industry and Security (BIS)
The BIS is part of the Department of Commerce and helps administer the EAR. However, the BIS is in place to protect national security, advance economic objectives, and align with foreign policy. It does so by ensuring treaty compliance with regard to exports through export control, promoting effective strategic technology leadership for the U.S.
Directorate of Defense Trade Controls (DDTC)
The DDTC oversees the export of defense articles and technology per the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). The ITAR contains a list of munitions subject to AECA regulation that require an export license. It also contains a list of embargoed destinations for these goods.
U.S. Census Bureau
Office of Foreign Assets Control (OFAC)
The U.S. Department of the Treasury’s OFAC enforces trade and economic sanctions per U.S. foreign policy, executing national security goals concerning specific foreign countries and the Specially Designated Nationals List.
What Is the EAR (Export Administration Regulations)?
The Export Administration Regulations (EAR) are laws governing export controls of goods and technology shipped from the United States. These regulations affect the manufacturing, sale, and distribution of certain technology products, commercial goods, and software. They also control the export of dual-use items that may be used for military or commercial purposes.
Compliance with U.S. Export Administration Regulations is required for every business that ships technology or goods from the country. The Bureau of Industry and Security enforces this compliance; noncompliance may cause the company or involved personnel to be barred from exporting.
Items subject to EAR export compliance can include purely commercial or dual-purpose items. The ITAR governs items or technology exclusively for military purposes that don’t also fall under EAR compliance regulations. Dual-use items will have an ECCN identification code.
Commerce Control List and ECCN
The first step to ensuring product shipment falls within the EAR trade compliance guidelines is checking it against the Commerce Control List (CCL). If the product is assigned a specific ECCN, the code will detail why it's restricted or controlled. The CCL is divided into ten categories:
- Nuclear materials, equipment, facilities, and miscellaneous items
- Chemicals, materials, toxins, and microorganisms
- Materials processing
- Telecommunications and information security
- Lasers and sensors
- Avionics and navigation
- Aerospace and propulsion
Businesses use this information to determine whether they need to apply for a special export license.
Export License Determination
The designated reason for control of an item per the CCL determines whether a company needs an export license to export said item to specific countries. An international business attorney will help ensure that each export item is shipped per EAR export administration regulations.
Staying Ahead of EAR Requirements
International shipping of controlled items and technology can be tricky, and the regulations change as U.S. foreign policies change. Keeping up with shifting controls can be complicated. Sequoia Legal, a team of international business attorneys, can help you remain compliant. Contact us today to learn more about our services.