The Bureau of Industry and Security (BIS) today announced the implementation of the latest license exception under the EAR – the Strategic Trade Authorization (STA) exception.
In a nutshell, STA allows for the export, re-export and in-country transfer of a variety of items subject to the EAR – without a license – to 36 different countries. There are approximately 30 ECCNs on the CCL which do not apply to this exception. Some of the authorized countries include: Canada, Germany, France, Norway, Greece, Spain, Sweden, Poland, United Kingdom and more.
In its press release, BIS claims the new exception will eliminate the need for 3,000 export licenses per year, affecting an estimated $1.4 billion in goods and technology.
Exporters using STA must obtain certain written assurances from their consignees before making any shipments. In addition, exporters must notify consignees in writing each time an STA shipment is made. Using this exception also requires the exporter to keep a log of STA shipments made and the exact written assurance from each consignee in connection with each shipment.
As with any export exemption or exception, there are a variety of conditions which apply. Above all, make sure the ECCN of your item is covered by the new STA exception before trying to claim it.
One quirky note about this new exception: As its currently written in the EAR, the STA exception makes it seem like any ECCN which is controlled for Anti-Terrorism (AT) reasons is not eligible for the new exception. Since nearly every ECCN has an AT reason for control, some exporters may assume (incorrectly) that no ECCNs apply for STA. However, BIS makes an “exception to this exception” by allowing those ECCNs with AT reasons for control to use STA, except for the five countries where a license is actually required due to AT reasons for control. Those five destinations are: Sudan, Syria, North Korea, Cuba and Iran.
BIS stated in its final rule that it was better to phrase the exception this way than to imply that exporters can use STA to send items to those five destinations, when in fact, they cannot.
Does that last part have you thoroughly confused? Don’t worry, we’re here to help! Let us know if we can assist you in applying the new STA exception to your exports. In the meantime, enjoy the additional $1.4 billion in annual commerce that can now be shipped “license free” courtesy of your friendly neighborhood BIS office!
Don Buehler is founder and president of Export Solutions, Inc., a consultancy firm which specializes in helping companies comply with ITAR and EAR.