Complete EAR Compliance
The Export Administration Regulations (EAR) is one of the two main export control laws used by the U.S. government to regulate exports from the United States. This law is in place to protect U.S. interests like economic and national security, so any business that ships anything out of the U.S. must comply with EAR regulations.
An export is the movement of any item from within its borders to outside the U.S., and the U.S. government oversees the export (and re-export) of all goods and technologies throughout the world. While this is a monumental task, various U.S. agencies oversee this task for national security and foreign policy reasons. There are two main export controls used by the U.S. government:
- International Traffic in Arms Regulations (ITAR): The ITAR is regulated by the United States Munitions List (USML) and applies to all goods and technologies intended for military use.
- The Export Administration Regulations (EAR): The EAR is regulated by the Commerce Control List (CCL) and applies to all goods and technical data intended for commercial use and has military applications.
As you can see, ITAR is much more straightforward and well-known than the EAR due to the confusing nature of classification and categorization of EAR-controlled items. If your business exports anything from the U.S., then you need to ensure that you are compliant with both ITAR and EAR licensing requirements.
Export Solutions offers professional EAR compliance training, audits, and consulting services for business operations. Since the EAR is often an area where companies fall into problems with exports, we wanted to put together some information to help you understand the EAR and navigate this critical part of your business.
What Is The Export Administration Regulations (EAR)?
The Export Administration Regulations (EAR) are controlled by the U.S. Department of Commerce and the U.S. Department of State to regulate “dual-use” items. These types of goods and related technical data are any items that are made for commercial use but could also have military applications.
The EAR regulates the export of any goods or technologies used by a foreign military, with exports requiring licenses based on the item’s characteristics, foreign country destination, intended use, and the foreign person.
A complete list of EAR-controlled items are outlined in the Commerce Control List (CCL). This list breaks down various categories for different types of EAR-controlled items based on their function, intended use, and application. The ten broad categories covered in the CCL are:
- Nuclear Materials, Facilities, and Equipment, and Miscellaneous
- Materials, Chemicals, Microorganisms, and Toxins
- Materials Processing
- Telecommunications and Information Security
- Lasers and Sensors
- Navigation and Avionics
- Propulsion Systems, Space Vehicles, and Related Equipment
Along with the broad categorization found in the CCL, additional restrictions can be applied to EAR-controlled goods and technologies based on their destination, receiving the shipment, and the intended use of the goods or technology.
What Agencies Regulate Control Exports?
Many companies are overwhelmed when they start exporting from the U.S. when they realize several agencies control different regulations. Export control is complex because the United States government requires
While there are many agencies involved with export controls, you should pay extra attention to these agencies with EAR-controlled goods and technologies:
Let’s enhance your compliance with the EAR so that you can avoid costly fines, penalties, and other delays for your organization.
The Bureau Of Industry And Security (BIS)
The Bureau Of Industry And Security (BIS) is the primary agency responsible for policy control through the EAR. The BIS is tasked with national security, foreign policy, and economic advancements with treaties and exports from the U.S. to foreign governments.
As discussed above, the EAR regulates the trade of dual-use goods and technologies not currently covered by other regulations like ITAR.
U.S. Census Bureau
The Foreign Trade Regulations is part of the U.S. Census Bureau, and it collects trade data and statistics to help other agencies oversee export compliance and develop trade policy. The FTR checks the value of exported goods and record-keeping requirements as trade compliance requirements continue to evolve.
Directorate of Defense Trade Controls (DDTC)
The U.S. State Department’s Directorate of Defense Trade Controls (DDTC) oversees exports classified as defense articles from the Arms Export Control Act (AECA). While the AECA is primarily found in the ITAR, some categories could be listed in the EAR due to statutory debarment.
Office Of Foreign Assets Control (OFAC)
The OFAC sets policy and enforces additional sanctions based on U.S. national security and foreign policy goals. Sanctions typically include economic and trade sanctions against different governments, military groups, or any other entity that threaten U.S. national security.
Many other agencies oversee aspects of export compliance. You will need to take extra care to ensure that your product doesn’t require an export license or if an agency needs to be considered when building a trade compliance program for your business operations.
How Does The EAR Determine Export Classifications?
The first factor determining the type of required export license is if your goods or technologies are dual-use, as defined by part 730.3 of the EAR. It’s easy to imagine that items meant for military use like firearms need to be regulated, and EAR applies to items or technologies not specifically controlled under the ITAR.
Commercial items that could be used by a foreign entity with military purposes need to be controlled for foreign and national security. These types of commercial items may have an ECCN code if it is considered dual-use under the EAR.
Export Control Classification Number (ECCN) & Commerce Control List (CCL)
The next item to consider when deciding if a right or technology is regulated under the EAR is if it has an ECCN. It’s important to note that most commercial items don’t have an ECCN assigned to them, but it’s essential to check the CCL to ensure your goods and technologies are not an EAR-controlled item.
The ECCN is an alphanumeric classification for a variety of goods and technologies in the CCL. Check the CCL to find your export’s specific ECCN and reasons why it is an EAR-controlled item to be used during the application process.
One part of export licensing that trip many companies up is when items don’t have an ECCN but still fall under EAR99. Products that fall under EAR99 are usually low-technology consumer goods that usually don’t require an export license but require an export license due to the destination country, end-user, or intended use.
Make Sure Your Company Is Compliant Today!
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