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How are existing encryption classifications grandfathered into the new encryption regulations? [Updated July 2, 2010]

Unrestricted classifications issued under former 740.17(b)(3)

An Unrestricted CCATS issued by BIS under former 740.17(b)(3) serves as authorization for export and reexport to eligible end-users and destinations if the reviewed item is described in the new paragraph (b)(1) or (b)(3) of license exception ENC.

Registration and classification

The exporter or reexporter may use the Unrestricted CCATS previously issued by BIS without any encryption registration (i.e., the information described in Supplement No. 5 to Part 742 of the EAR), new classification by BIS, self-classification reporting (i.e., the information described in Supplement No. 8 to Part 742 of the EAR), provided that the cryptographic functionality of the item has not changed and the item is not now described by 740.17(b)(2)(i).  

An encryption registration and updated classification must be submitted to BIS for items classified under the previous provisions as eligible for export and reexport under 740.17(b)(3) that are now described in paragraph 740.17(b)(2)(i) of license exception ENC, even if the cryptographic functionality has not changed.

Semi-annual sales reporting

Using the Unrestricted CCATS previously issued by BIS under former 740.17(b)(3), the exporter or reexporter is not required to provide semi-annual sales reporting under section 740.17(e) for items described in the new paragraph (b)(1) or (b)(3), except for items described in (b)(3)(iii).

Items described in 740.17(b)(2) and (b)(3)(iii) still require semi-annual sales reporting.

Restricted Classifications issued under former 740.17(b)(2)

A Restricted CCATS issued by BIS under old 740.17(b)(2) now serves as authorization for export and reexport to eligible end-users and destinations if the reviewed item is described in the new paragraph (b)(2)(i) of license exception ENC.  The exporter or reexporter may use the CCATS previously issued by BIS without any encryption registration (i.e., the information described in Supplement No. 5 to Part 742 of the EAR), new classification by BIS, or self-classification reporting (i.e., the information described in Supplement No. 8 to Part 742 of the EAR), or semi-annual sales reporting required under section 740.17(e), provided that the cryptographic functionality of the item has not changed. 

Items described in 740.17(b)(2) and (b)(3)(iii) still require semi-annual sales reporting.

Cryptanalytic items, open cryptographic interface items, and encryption technology:

For items described in the new 740.17(b)(2)(ii), (b)(2)(iii) or (b)(2)(iv), such items reviewed and classified by BIS prior to publication of this new rule are authorized for export and reexport to eligible end-users and destinations under paragraph (b)(2) of this license exception using the CCATS previously issued by BIS, without any encryption registration (i.e., the information described in Supplement No. 5 to Part 742 of the EAR), new classification by BIS, or self-classification reporting (i.e., the information described in Supplement No. 8 to Part 742 of the EAR), provided the cryptographic functionality of the item has not changed.

Classifications issued under the former 742.15(b) – Mass Market

For mass market encryption commodities, software and components described in the new 740.17(b), such items reviewed and classified by BIS as mass market products prior to the rule change are authorized for export and reexport under paragraph (b) of this section using the CCATS previously issued by BIS, without any encryption registration (i.e., the information described in Supplement No. 5 to Part 742), new classification by BIS, or self-classification reporting (i.e., the information described in Supplement No. 8 to Part 742), provided the cryptographic functionality of the item has not changed.


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