Export compliance isn’t sexy—it’s not the jet-setting, money-making, network-growing side of the business many people think of when they think about exporting.
As exporters, it’s our responsibility to make sure we’re following the letter of the law. As all savvy and successful exporters know, export compliance is crucial to the health of your company (as well as the safety of the United States).
As an exporter, your compliance responsibilities include:
- Determining which government agency has jurisdiction over your goods.
- Determining the proper classification of your goods.
- Identifying whether or not your products require an export license.
- Paying attention to red flags to ensure the people you’re doing business with won’t use your items for nefarious reasons.
With all these responsibilities, what can you do to make your job a little easier?
The Bureau of Industry and Security (BIS) is the agency within the U.S. Department of Commerce that has jurisdiction over most goods exported from the United States. BIS has created several tools to help companies stay compliant with U.S. export regulations.
Please note: While all of these tools can be found on the BIS website, BIS published an updated version of their website in early 2024, but has not yet moved most of these compliance tools to their new website structure. Most of the links below will take you to the older, still-functioning website. (See the BIS notice on this fact.) Unfortunately, sometimes you may be taken to a white page that simply says, “Error.” If you get that message, come back to this blog post and try clicking on the link again. I’ve usually been able to get to the correct page on my second or third try. Once the compliance tools get moved to the new website navigation structure, I’ll update this blog post with the new links.
Interactive Export Compliance Tools
1. Commerce Control List (CCL) Order of Review Tool
If you are exporting from the United States, your goods may fall under the jurisdiction of one of a few different sets of regulations. Most goods fall under the jurisdiction of the U.S. Department of Commerce and the Export Administration Regulations (EAR). BIS is the agency within the Commerce Department that administers the EAR.
Once you’ve determined that your goods fall under the jurisdiction of the EAR rather than another set of regulations like the U.S. Munitions List (USML), you need to determine if it has an Export Control Classification Number (ECCN) to identify any potential export restrictions. ECCNs are listed in the Commerce Control List (CCL).
The CCL Order of Review Decision Tool will help you understand the steps you need to follow in reviewing the Commerce Control List when determining the classification of your item, so you don’t make a mistake that could lead to fines and penalties. To find out more about this process, check out our article No, You Probably Don’t Need an Export License, But…
2. Specially Designed Decision Tool
When reviewing the Commerce Control List, you may find that the definitions for certain ECCN classifications may include the term “specially designed.” The EAR uses that term to distinguish two different but similar types of products. The Specially Designed Decision Tool will help you determine if an item is “specially designed” under the EAR.
Part 772 of the EAR defines the term, and BIS has published a YouTube video that explains what it means. The term was introduced a few years ago to make a sort of “standard” that is common to the EAR and the International Traffic in Arms Regulations (ITAR), although slight differences in wording make the definition EAR- or ITAR-specific.
3. Strategic Trade Authorization (STA) Compliance Tool
Even if you determine that your product has an ECCN classification and may be controlled for exports to certain countries, the EAR provides a list of certain license exceptions that you may be eligible to use if the ECCN classification states that it can be used, and if your product meets the specific requirements. We explain that in more detail in our article, Understanding Export License Exceptions.
STA is one of those export license exceptions. STA “authorizes exports, re-exports, and transfers (in-country), including releases within a single country of software source code and technology to foreign nationals, in lieu of a license that would otherwise be required pursuant to part 742 of the EAR.” Part 740.20 of the EAR provides more detail.
The STA Compliance Tool will help you determine if your item is eligible for the specific license exception STA and help you understand if you are prepared to meet the compliance requirements of this license exception.
Learn more in our article, Using the Export License Exception STA: Strategic Trade Authorization.
4. De minimis and Direct Product Rules Decision Tool
If an item or software you export is controlled by BIS under the Export Administration Regulations, you may need an export license before you can ship it to certain countries. However, if a non-U.S.-made item incorporates or is bundled with that same item, you may not need an export license if the value of that original item represents a small percentage of the total value of the new item. In that case, its value is considered de minimis. That percentage may be 0%, 10% or 25%, depending on where the good is going.
The De minimis and Direct Product Rules Decision Tool will guide you through the process of determining if the reexported product contains a small enough percentage of your original item based on its intended destination to fall outside the scope of U.S. export controls.
For more background about re-exports, check out our articles, What Is a reexport? and No Bull: Export Compliance Means Watching for Red Flags.
5. Consolidated Screening List Tool
Technically, the Consolidated Screening List is not a BIS tool; it’s actually hosted on the U.S. International Trade Administration’s website. However, it includes four lists of denied parties that are published by BIS.
The Consolidated Screening List tool allows you to screen 11 lists published by different U.S. agencies for potential parties with whom you may not be allowed to do business. If a company, entity or person on the list appears to match a party potentially involved in your export transaction, you need to take additional steps and do your due diligence before you continue with your transaction.
The tool checks against the following lists:
- Denied Persons List
- Unverified List
- Entity List
- Military End User List
- Nonproliferation Sanctions
- AECA Debarred List
- Specially Designated Nationals List
- Foreign Sanctions Evaders List
- Sectoral Sanctions Identifications List
- Correspondent Account or Payable-Through Account Sanctions List
- Non-SDN Menu-Based Sanctions List
- Non-SDN Chinese Military-Industrial Complex Companies
- Palestinian Legislative Council List
6. Export Compliance Program (ECP) Audit Module: Self-Assessment Tool
BIS strongly recommends that companies that export should have a written Export Compliance Program that company employees can follow to ensure they are complying with U.S. export regulations. While not required, if your company ever gets audited by the Office of Export Enforcement, the FBI, or some other agency that has jurisdiction over export regulations, a written ECP may be considered a strong mitigating factor against penalties if any violations are found.
Here’s the caveat. If you have a written ECP, you need to document that you are following it. You need to keep it up to date. And you need to make sure relevant employees are being trained about it. If you publish an ECP and then put it away in a closet and never look at it again, it may get you in more trouble than if you never took the time to create one.
BIS once had a self-assessment tool available on their website that would help you create an ECP. It no longer appears to be available on the revised BIS website. (If you find it, please let me know!) However, BIS still provides guidance including a free eBook that you can download that identifies the key components in a company’s written Export Compliance Program. In addition, BIS offers companies a free review of their written ECP and will provide guidance for strengthening the program at your company.
Getting the Export Help You Need
Keep in mind that the Bureau of Industry and Security isn’t the only agency with jurisdiction over exports. Check out my blog post that summarizes the government agencies that regulate U.S. exports. But most products and most exports are controlled by BIS, and the six tools I’ve outlined above can help make sure you’re staying on the right side of the EAR, doing your job to protect the United States, and protecting yourself from costly penalties, fines and even jail time!
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