Bureau of Industry and Security (BIS)
The Bureau of Industry and Security (BIS) is part of the US Department of Commerce and is responsible for the development, implementation and interpretation of U.S. export control policy, specifically dual-use commodities, software, and technology. The mission of the BIS Export Enforcement (EE) is to protect U.S. national security, homeland security, foreign policy, and economic interests through a law enforcement program. EE is involved in preventative and investigative enforcement activities and using criminal and administrative sanctions against export violators. The EE works with the Department of Justice (DoJ) to impose criminal sanctions for violations, including fines and possible jail terms. US companies involved in exporting must ensure that exports fully comply with all statutory and regulatory requirements. Compliance involves the no-export of controlled goods and technologies and the restrictions on shipping to certain countries, companies, organizations, and individuals.
Export Administration Regulations (EAR)
If you own a company that is exporting items, then the Export Administration Regulations (EAR) is important guide that must be adhered to. There are a relatively small percentage of exports that are subject to the EAR require an application to BIS for a license. There are five areas that should be examined to identify if your company needs an export license.
- Classification – for export controls, the classification of an item to be exported has to be identified to see if it is on the Commerce Control List (CCL)
- Final Destination – the country of final destination is important in deciding whether an export license is needed.
- End Consumer – the final consumer of the product is another vital piece of information in the exporting decision
- End Use – the ultimate use of the item can determine the export viability.
- Conduct – the conduct of a freight forwarder, financier or shipper is another important element in the decision.
Items On The Commerce Control List (CCL)
If you are planning to export an item or a service that is on the CCL, then you will need to review a list of ten prohibitions that require a license for the export.
- Export and re-export of controlled items to listed countries
- Parts and Components Re-exports
- Foreign-produced Direct Product Re-exports
- Engaging in actions prohibited by a denial order
- Export or re-export to prohibited end-user
- Export or re-export to embargoed destinations
- Support of proliferation activities
- In-transit shipments and items to be taken off from vessels
- Violation of any orders, terms, or conditions
- Proceeding with transactions knowing that a violation is about to occur
If you decide that after reviewing the CCL that an export license is required for the destination of your export then you should determine whether a License Exception can be allowed. If no License Exception is available, and then you have to apply for an export license before exporting any items. The License Exception allows the export of items that are subject to the Export Administration Regulations (EAR) that would otherwise require a license. Each License Exception bears a three letter symbol that is used for export clearance purposes. The Shipper’s Export Declaration (SED) requires that the three letter License Exception symbol and Export Control Classification Number (ECCN) are stated.
License Exception Symbols
There are a number of license exceptions that can be used. These have a three letter designation such as LVS, CIV and APP. A list of exemptions are shown below.
- Shipments of Limited Value (LVS) – This refers to shipments of limited value. Each license requirement on the CCL has a LVS identified for items that can be referred to.
- Shipments to Country Group B Countries (GBS) – Group B countries are deemed friendly nations such as Australia, Brazil, Norway, United Kingdom, etc.
- Civil End-Users (CIV) – This exemption can only be used if there is an entry in the CCL that identifies an item as being applicable for the CIV exemption.
- Technology and Software Under Restriction (TSR) – This exemption allows exports of technology and software where the destination would require a license for national security reasons only, but indicated as allowable on the CCL.
- Computers (APP) – This exemption allows the exports of computers and electronic assemblies.
- Servicing and Replacement of Parts and Equipment (RPL) – This exemption allows for the one-for-one replacement of parts or servicing and replacement of equipment.
- Gift Parcels and Humanitarian Donations (GFT) – This authorizes the exports of gift parcels by an individual that is addressed to an individual, religious, charitable or educational organization.
- Technology and Software Unrestricted (TSU) – Allows exports of operation technology and software; sales technology and software; software updates (bug fixes); “mass market” software considered to be publicly available.
Complying with US Export Controls
The Bureau of Industry and Security offer a number of courses to companies that are involved or would like to start an exporting business. The courses aim to help companies understand how to comply with current US exporting regulations and set up compliance programs to ensure that errors are avoided. These courses are held throughout the country and a schedule is posted on the BIS website.