Being an exporter has its benefits, but you also have a lot of responsibilities. There’s export controls and regulations you need to be aware of and logistics and paperwork to figure out before you can load a box into your customer’s shipping container. If you’re new to exporting or want to make sure you’re doing things correctly, the West Virginia Department of Economic Development is here to help. Our trade representatives and partners can help guide you and your team through the export compliance process. Here are some of basics you need to know about export licenses.
Why are exports regulated?
The regulation of exports is an important part of protecting the national security, foreign policy and economic interests of the United States. While export laws can be overwhelming to a new exporter, they are not put in place to impose regulatory burdens on you or any business conducting legitimate international trade. To put it simply, an export license is the U.S. government’s way of permitting and tracing the export of controlled technologies.
Do I need an export license?
As the exporter, it is your responsibility to know whether your product requires a license. The first step in determining if you need an export license, is finding out which federal agencies have jurisdiction over your export. You are also required to determine who your buyer is and how your product will be used and you’ll need to maintain an effective export compliance plan.
The following is a brief overview of products and services that do or do not require you to have an export license.
Yes: Defense Articles and Services
The U.S. Department of State’s Directorate of Defense Trade Controls (DDTC) controls most defense articles and services. If you manufacture, distribute or refurbish these types of articles you should already be registered with DDTC. In order to export your products and services you must comply with the DDTC International Traffic in Arms Regulations (ITAR) and most likely will have to obtain a license for every export shipment. To learn more about how to comply with ITAR, visit the DDTC’s website and get in touch with their friendly support team.
Maybe: Commercial Items
Most other commercial items will fall under the jurisdiction of the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) and will be subject to the Export Administration Regulation (EAR). The EAR maintains a list of controlled items (commodities, software or technology) known as the Commerce Control List (CCL) which is categorized by Export Control Classification Numbers (ECCNs). In order to know your export license requirements, you will need to figure out your ECCN. Your ECCN will list any reasons for control and will provide indicators on how to consult the Commerce Country Chart, a table with columns and rows that matches countries with reasons for control. If your matching cell is marked with an X, a license may be required. Some countries will not trigger a license and there are some instances where license exceptions may apply. Even if your product requires a license, they are free and easily obtained online, usually within the hour if you have all the necessary information.
No: Most Consumer Goods
Most consumer goods and low technology items will not be found on the CCL. In this case, the item will be designated as EAR99 and will normally not require a license. Your ECCN number or EAR99, license number or license exemption code will be required for your export documentation and your AES filing. If a license is not required, you can simply say No License Required or NLR.
Yes: Consumer Goods Sold to Restricted Countries or for Prohibited Uses
Even if your item is designated as EAR99, you may need a license if it’s sold to an embargoed country, to an end-user of concern or for a prohibited end-use. To see if these regulations affect your product, you can check the Consolidated Screening List to verify if the end-user is restricted or denied to receive U.S. products. If your customer is on this list, a license may be required and additional due diligence should be conducted.
Being a smart and compliant exporter goes beyond simply screening customers. For instance, re-exports from your customer’s country to another country are also subject to the EAR. That’s why creating an effective export compliance program is so important. And with a little bit of training, it’s not that complicated. Click here to learn how West Virginia exporters are managing their export compliance.
Get help from our export experts
Still need help making sense of export license requirements? The U.S. Department of Commerce’s Bureau of Industry and Security has free training videos that can help you obtain your product’s ECCN and create an effective export compliance program. If you are unable to determine whether your products are subject to the EAR or ITAR, you can get an official ruling through a Commodity Jurisdiction Request. Click here to learn more.
If all else fails and you need to speak to someone directly, the West Virginia Department of Economic Development’s international trade representatives are available to help answer your questions about exporting and identifying new foreign buyers for your products or services. Contact us today!