EXPORT ADMINISTRATION REGULATIONS

At the conclusion of Chapter 10, the student will understand the following:

1. There are various agencies of the federal government that have export control jurisdiction over exports from the U.S.
   
2. US law considers exporting to be a privilege.
   
3. Commercial exports are controlled by the Department of Commerce under the Export Administration Regulations (EAR).
   
4. US exports are restricted and/or prohibited to entities and destinations embargoed by the Department of Commerce, Department of Treasury and Department of State.
   
5. An export license is required to export specified items to entities on the "Entity List".
   
6. Commercial export transactions are authorized under the EAR according to controls on product or technology, end-use, end user, and end destination. Export Symbols / authorizations include: NLR (No License Required), License Exception, and export license.
   
7. There is a step-by-step procedure for complying with the EAR.
   
8. An export management and compliance program can be implemented to insure compliance with the EAR.
   
   

Commerce Control List

It's late Friday afternoon and Tom is preparing to leave work. He is thinking about his weekend trip to the beach when he is jarred back to reality by the ringing of his telephone.

"Who would be calling at 4:55 o n a Friday?", he asks himself as he lifts the receiver.

"Wilson here," he says with obvious irritation in his voice.

"Hello, Mr. Wilson, this is Officer Rubinski."

Tom immediately changes his tone of voice.  "Yes, Officer Rubinski, how can I help you?"

"Mr. Wilson, I'm an officer of the Customs and Border Protection of the Department of Homeland Security. We are detaining True-Flow's shipment of five computers destined for Taiwan.  Your Electronic Export Information states that shipment has been made under NLR. Can you verify to me that you are making this shipment correctly?" the officer asks.

"NLR? What is he talking about?" Tom thinks to himself.  "I'm not entirely sure about that," Tom answers the officer. "Can you release the shipment and we'll get you an answer on Monday?"

"No, we cannot release the shipment until we verify the export symbol or authorization," Officer Rubinski says.

At the risk of sounding ignorant, Tom asks, "What is an export authorization?"

"An export symbol or authorization is an entry on the Electronic Export Information indicating the exporter's authority to complete an export transaction," Rubinski says.  "It's obvious to me that you have not reviewed your product against the Commerce Control List. We cannot release this shipment until we get a ruling."

"Commerce Control List?  What is that?" Tom responds anxiously as he considers the inconvenience of a delayed shipment to his customer. His email earlier that day to Taiwan promised delivery for next week!

Rubinski explains, "The Commerce Control List, or CCL, is a list maintained by the Department of Commerce.  It includes all items (commodities, software and technical data) subject to Commerce Control.  It does not include items controlled by other agencies of the US government.

"I suggest you obtain a copy of the CCL and properly classify the product which you have shipped," Rubinski says.

"How do I get a copy of the CCL?"  Tom asks recognizing this is an area in which he has limited knowledge.

"The CCL is part of the Export Administration Regulations, administered by the Department of Commerce," Rubinski says in undisguised exasperation. "I suggest you call your local District Office of the Department of Commerce on Monday.  (See Exhibit 2-G). They will tell you how to classify your product.  You can access the Export Administration Regulations on the Bureau of Industry and Security website: http://www.bis.doc.gov.  Your shipment will be held here at the airport until we get a ruling from the Department of Commerce regarding your product classification."

"Have a nice weekend," Rubinski says as he hangs up.

"Oh sure," Tom thinks to himself, as a black cloud passes over his vision of a tranquil weekend.