Where Industry and Security Intersect
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Updated on 10/23/08
The United States Department of Commerce regulates exports and reexports of "dual-use" items, i.e., goods, software and technologies with commercial and proliferation/ military applications, through its Export Administration Regulations (EAR). If you are outside the United States and wish to export or reexport an item that is of U.S. origin or that has a U.S. connection (as described in more detail in Parts B-D below), your product may require a license from the U.S. Department of Commerce's Bureau of Industry and Security (BIS). Certain additional restrictions are also outlined in part E below.
Your item is subject to the Export Administration Regulations (EAR) if it:
You may need to obtain a license to "reexport" an item that was produced or originated in the United States. A "reexport" is the shipment or transmission of an item subject to the EAR from one foreign country (i.e., a country other than the United States) to another foreign country. A reexport also occurs when there is "release" of technology or software (source code) subject to the EAR in one foreign country to a national of another foreign country.
Many items subject to the EAR do not need a license to be reexported from one foreign country to another. But certain items are controlled and will either require a license or must qualify for a License Exception. License requirements apply particularly to items controlled by multilateral export control regimes. In addition, some destinations and persons (individuals or groups) are subject to comprehensive export controls, including controls on widely traded consumer products.
To determine whether your U.S.-origin product requires a license you will need the following three pieces of information:
As noted above, certain foreign-produced items are also subject to the EAR because they contain more than a specified percentage value of U.S.-origin controlled content. You need to first determine if your foreign produced item is subject to the EAR. If you determine your foreign produced item is subject to the EAR, you will then follow the process outlined in Part A above to determine if your foreign-produced item requires a license.
The following steps are provided as general guidance for determining whether a foreign produced commodity that incorporates U.S.-origin parts is subject to the EAR or qualifies for the de minimis exception to the EAR. This general guidance does not take into account specific items that are not eligible for de minimis treatment. You should consult section 734.4 and Supplement 2 to Part 734 for information on such items and the calculation of U.S. controlled content.
1. General guidance regarding incorporation of U.S. parts or components into foreign-produced items. If you are a foreign company that incorporates U.S.-origin parts or components in a foreign commodity you will need to -
(a) classify the U.S.-origin parts or components exported to you according to the classification system set forth in the EAR. The U.S. exporter may be able to assist you in determining the ECCN.
(b) determine if the U.S. parts or components are "controlled content." ("U.S. controlled content" is content that would require a U.S. license if it were to be reexported as separate parts or components to the country of ultimate destination.)
(c) determine if the U.S. "controlled content" is greater that 25% of the value of your finished foreign product. (For designated terrorist supporting countries, you need to determine if the U.S. "controlled content is greater than 10% of the value of your finished product.) If the U.S. controlled content is 25% or less of the value of your finished product (or 10% or less for applicable countries), you qualify for the de minimis exception set forth in 734.4 of the EAR and your product is not subject to the EAR.
(d) if the controlled content is greater than 25% (or 10% for applicable countries), your product is subject to the EAR.
If your product is subject to the EAR, you need to determine if your item requires a license, either because of the ultimate destination or the end-use or end-user. To do this, follow the steps outlined in Part A 1-3. 2.
2. Additional guidance regarding foreign software incorporating U.S.-origin software and foreign technology commingled with or drawn from U.S.-origin technology. If you incorporate U.S.-origin software into your foreign software, or you bundle U.S.-origin software with foreign hardware, or if your foreign technology is commingled with or drawn from U.S.-origin technology, you would follow a process similar to the one outlined above. That process and a related one-time reporting requirement for technology commingling are set forth in section 734.4 and Supplement 2 to part 734 of the EAR.
Direct products of U.S.-origin technology are subject to the EAR only if they are intended for specified destinations, would be subject to national security controls (if they were U.S.-origin items) and the U.S.-origin technology or software on which the foreign product is based required a written assurance from the recipient when it was exported from the United States. See EAR sections 734.3(a)(4) and 736.2(b)(3).
The product of such a foreign plant or major component of a plant is subject to the EAR only if it is intended for specified destinations, would be controlled for national security reasons (if it were a U.S.-origin product) and if the technology on which the plant or major component of a plant is based required a written assurance from the recipient when it was exported from the United States. See section 734.3(a)(5) and 736.2(b)(3).
In certain instances, if your reexport transaction requires a license, you may be able to use one of the License Exceptions set forth in part 740 of the EAR. A License Exception allows you to reexport an item without applying for a license, provided your transaction meets all the terms and conditions of the License Exception.
You may not reexport an item subject to the EAR to a party whose export privileges have been denied by BIS. Information on parties subject to denial orders is provided on this Web Site.
Please note that U.S. persons may be subject to additional restrictions under the EAR. See section 744.6 of the EAR. U.S. persons may also be subject to restrictions under other U.S. Government regulations, such as those issued by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury or other U.S. Government departments or agencies.
The Department of Commerce has enforcement and protective measures available to it to ensure that recipients of items subject to the EAR comply with the reexport license requirements of the EAR. If the Department of Commerce determines that you have not complied with these requirements and restrictions, it may institute administrative enforcement proceedings, resulting in the possible imposition of civil penalties and/or denial of your eligibility to receive U.S. exports (part 764 of the EAR).
If your reexport requires a license and is not eligible for a License Exception, you may apply for a reexport license electronically through the Simplified Network Application Process Redesign (SNAP-R). You may find the basic information on the SNAP-R program on this Web site. If you have not submitted an application electronically before, you must first complete a "PIN" request package.
If you need help regarding a reexport license or product classification, or wish to obtain other information on U.S. export controls, please consult the main BIS Web Site (in English).
To speed the responses to requests for information and assistance, BIS has a list of Web forms (in English) for different kinds of requests. Using the correct form will help us to promptly respond to your inquiry.
In addition, you may contact the Office of Exporter Services, Bureau of Industry and Security, directly at:
Outreach and Educational Services Division
Room 1099D
14th Street & Pennsylvania Ave., N.W.
U.S. Department of Commerce
Washington, DC 20230
Phone: (202) 482-4811
Fax: (202) 482-2927
All requests for information and assistance must be in English.
The Bureau of Industry and Security provides this Guidance on Reexports for information purposes only. The Guidance does not provide an official interpretation or translation of U.S. export control law or regulations. This information does not relieve the reader of any duties or obligations regarding knowledge of or compliance with all relevant U.S. export control laws and regulations as they appear in the U.S. Code of Federal Regulations and as modified by notices in the Federal Register.