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U.S. Controls On The Export And Re-export Of
U.S. Origin Goods & Technology - EAR
  1. The Department of Commerce, the EAA, and the Export Administration Regulations ("EAR") (15 C.F.R. Part 732 et seq.)
    1. Jurisdictional Scope and Limitations of the EAR

Generally, all goods and technical data (any references to goods or items includes the corresponding technology or technical data necessary to design, manufacture, operate or repair it) are subject to export control under the EAR, unless they are subject to the preemptive jurisdiction of another agency. This would include:

      1. All items in the United States regardless of orign;

      2. All U.S. origin items wherever located;

      3. U.S. origin parts, components, materials or other commodities incorporated abroad into foreign-made products, U.S. origin software commingled with foreign software, and U.S. origin technology commingled with foreign technology, in quantities exceeding de minimis levels as described in §734.4 and Supplement No. 2 of this part;

      4. Certain foreign-made direct products of U.S. origin technology or software, as described in §736.2(b)(3) of the EAR.

While not a legally descriptive term, we typically refer to these goods and technologies as "dual-use", meaning that they are capable of both a commercial and a military application. More accurately, however, items subject to the EAR consist of the items listed on the Commerce Control List ("CCL") in part 774 of the EAR, and all other items which meet the definition of that term.

    1. The Commerce Control List (the "CCL")

The Commerce Control List (the "CCL") is a list of all items under the export control jurisdiction of the EAR and the Department of Commerce. The CCL is found in Supplement No. 1 to Part 774 of the EAR. The Bureau of Industry and Security ("BIS") maintains the CCL. The coverage of the CCL includes commodities, as well as software, technology, and technical data.  

The CCL does not include those items exclusively controlled for export by another department or agency of the U.S. Government, such as the Department of State's Directorate of Defense Trade Controls (DDTC).

The CCL is divided into 10 categories, as follows:

  • 0-Nuclear Materials, Facilities and Equipment and Miscellaneous
  • 1-Materials, Chemicals, "Microorganisms," and Toxins
  • 2-Materials Processing
  • 3-Electronics
  • 4-Computers
  • 5-Telecommunications and Information Security
  • 6-Lasers and Sensors
  • 7-Navigation and Avionics
  • 8-Marine
  • 9-Propulsion Systems, Space Vehicles and Related Equipment

Within each category, items are arranged by group. Each category contains the same five groups. The letters A through E identify each group, as follows:

  • A-Equipment, Assemblies and Components
  • B-Test, Inspection and Production Equipment
  • C-Materials
  • D-Software
  • E-Technology

Within each group, individual items are identified by an Ex port Control Classification Number (ECCN) (e.g., 3A001). Each number consists of a set of digits and a letter. The first digit identifies the category within which the entry appears.

The letter immediately following this first digit identifies under which of the five groups the item is listed (e.g., 3A001). The second digit differentiates individual entries by identifying the type of controls associated with the items contained in the entry (e.g., 3A001).  

The numbers in either the third or forth place (e.g., 3A001) serve to differentiate between multilateral and unilateral controlled entries. An entry with the number "9" as the third place identifies the entire entry as controlled for a unilateral concern (e.g., 2B991 for anti-terrorism reasons).  

The last digit within each entry (e.g., 3A001) is used for the sequential numbering of ECCNs to differentiate between entries on the CCL.

So, in the case of ECCN 3A001, it covers electronic (category 3) equipment, assemblies and components (Group A), that are controlled for multilateral export control purposes, and, in this case, it is national security purposes. It is the first entry in the Group, and covers electronic components that are specifically enumerated in the paragraphs. The technology to manufacture or produce such electronic devices is described in ECCN 3E001.

There is also ECCN 3A991, which covers category 3 equipment, assemblies and components (Group A), which are controlled for unilateral export control purposes, and in this case, it is foreign policy reasons. It is close to the last entry in the group and covers electronic components that are not otherwise specifically enumerated in 3A001. The technology to manufacture or produce an electronic device controlled under this ECCN is described in ECCN 3E991, whereas the equipment to produce them is covered by ECCN 3B001 or 3B991, depending on the technical specifications of the equipment.

Even if an item is not specifically named or identified on the CCL, it is still subject to jurisdiction under the EAR. Commerce uses the designator "EAR99" to identify items that are subject to the EAR but which are not identified on the CCL under a specific ECCN.  

  1. Export Controls on Technology And Technical Data Under the EAR
    1. Exports And Transfers of Technology And Technical Data

As noted above, the EAR controls the export of technology and technical data, as well as the products made therefrom. The term "Technology" is defined (§772, EAR) as:

"Technology". (General Technology Note) -- Specific information necessary for the "development", "production", or "use" of a product. The information takes the form of "technical data" or "technical assistance".  

Technical assistance includes instruction, skills training, working knowledge, and/or consulting services. The term "technical data" is defined as:

"Technical data" -- May take forms such as blueprints, plans, diagrams, models, formulae, tables, engineering designs and specifications, manuals and instructions written or recorded on other media or devices such as disk, tape, read-only memories.

Controls on the export of technology and technical data typically mirror the type of export controls applicable to the goods to which the technology relates. Therefore, if there is a prohibition of the export of a particular good to a particular country, it is also very likely that the export of the technology or technical data to develop, produce, or use that product is subject to the same restrictions. In fact, in some cases, the level of control may be greater because the same technology or know how can be used to produce an item with a high degree of sophistication.  

Therefore, before any transfer of technology and technical data occurs, it should be classified under the CCL so a determination can be made as to whether any export licensing obligations exist.

      1. The "Deemed Export" Rule--Transfers of U.S. Origin Technology And Technical Data To Foreign Nationals In The United States

An "export" of U.S. origin technology or technical data can occur even in the United States simply by disclosing information or technology to a foreign national from a country other than the United States. Under EAR 734.2(b), the release of technology or technical data subject to the EAR to a foreign national of another country is "deemed" exported to the home country of the foreign national.   Technology or software is "released" for export through:

    1. Visual inspection by foreign nationals of U.S.-origin equipment and facilities;

    2. Oral exchanges of information in the United States or abroad; or

    3. The application to situations abroad of personal knowledge or technical experience acquired in the United States.

The "deemed export" rule does not apply to persons lawfully admitted for permanent residence, and does not apply to persons who are protected individuals under the Immigration and Naturalization Act (8 U.S.C. §1324b(a)(3)).

    1. EAR Export Controls And Country Restrictions

Once an item is classified according to the CCL, a determination can be made as to whether an export license or other approval is required before the export occurs.

In addition to the CCL, the EAR also contains the Commerce Country Chart (the "CCC")(See Supplement 1 to Part 738 of the EAR). The Commerce Country Chart indicates the basic licensing requirement for every country, according to the reason for control found in the CCL applicable to that item. For instance, an item that is controlled for national security or missile technology will require an export license to most countries, while an item that is controlled only for foreign policy reasons will require an export license to only four or five countries.

For example according to the Commerce Country Chart, a semiconductor laser diode that is described in ECCN 6A005 will require a validated license to most countries because it is controlled for national security reasons. On the other hand, a semiconductor laser diode that is described in ECCN 6A995 (because it has less sophisticated performance specifications) will require a validated license to only a few countries (Sudan, Syria, Cuba, Iran, Iraq and North Korea), because it is controlled only for U.S. foreign policy reasons.

    1. U.S. Re-export Controls Under The EAR And Foreign Produced Items Manufactured Or Produced From U.S. Origin Technology

The EAR also maintains controls on the re-export of U.S. origin goods, and foreign produced goods that are made using U.S.-originating technology or technical data. These restrictions apply regardless of whether the reseller or exporter is a U.S. entity or not.

      1. Re-Export Of U.S. Origin Goods

The EAR maintains controls on the re-export of U.S.-origin goods using the same system to classify and control the export of items from the U.S. If a license would be required to export the item from the U.S. directly to the new country, then a re-export approval would be required to re-export the U.S.-origin item from the first foreign country to the second.  

Similarly, if a license exception exists to allow the export the item from the U.S. directly to the new country, then a license exception exists, which allows the re-export of the U.S.-origin item from the first foreign country to the second.

      1. Export of Foreign Produced Items Manufactured Or Produced From U.S. Origin Technology Or Technical Data

The EAR also maintains controls on the export of foreign produced items manufactured or produced from U.S.-origin technology or technical data.  

      1. Export Of Foreign Produced Items Manufactured Or Produced From U.S.-Origin Technology or Technical Data To Terrorist-Supporting Countries

The United States maintains foreign policy export restrictions on countries that support terrorism. These countries are identified in Group E:1 to Supplement 1 to Part 740 of the EAR, and are listed below:               

Cuba
Iran
Sudan
Syria
North Korea
Libya

If a foreign produced item contains 10% or more in value of U.S.-origin commodities or technical data, it is subject to U.S. export licensing controls to the above six countries.

      1. Export Of Foreign-Produced Items Manufactured Or Produced From U.S.-Origin Technology or Technical Data To Destinations Other Than Terrorist-Supporting Countries

If a foreign produced item contains 25% or more in value of U.S. origin commodities or technical data, it is subject to U.S. export licensing controls to all destinations other than those countries identified in Group E:1 to Supplement 1 to Part 740 of the EAR, listed above.

    1. Other EAR Export Restrictions

Certain individuals and organizations are prohibited from receiving U.S. exports, and others may only receive goods if they have been licensed, even items that do not normally require a license, based on the ECCN and Commerce Country Chart or based on an EAR99 designation. For example:

Entity List - EAR Part 744, Supplement 4 - This is a list of organizations identified by BIS as engaging in activities related to the proliferation of weapons of mass destruction.   Depending on the item and its ECCN classification, you may be required to obtain a license to export to an organization on the Entity List even if permission is not otherwise required.

Treasury Department Specially Designated Nationals and Blocked Persons List - EAR Part 764, Supplement 3 - A list maintained by the Department of Treasury's Office of Foreign Assets Control, comprising individuals and organizations deemed to represent restricted countries or known to be involved in terrorism and narcotics trafficking.

Denied Persons - You may not participate in an export or re-export transaction subject to the EAR with a person whose export privileges have been denied. A list of those firms and individuals whose export privileges have been denied is available on this list. The list is available from many sources, including the BIS Web site. Note that some denied persons are located within the United States.

The Unverified List.   This is a list of firms or entities for which BIS was not able to complete an end-use check. Firms on the unverified list present a "red flag" that exporters have a duty to inquire about before making an export to them.

You can obtain current information on all of these lists by clicking on http://www.bis.doc.gov/ComplianceAndEnforcement/index.htm#ltc  

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