I get a lot of emails from exporters who are confused about whether or not their products require an export license. Their initial search through the Export Administration Regulations (EAR) indicates that they do, but then they hear or read about export license exceptions that may be available.
This comprehensive guide explains what license exceptions are, how they work and how to determine if your exports qualify. This discussion assumes you know the basics of export licenses. If you are new to the export license process, I recommend that you first download and read our free guide, How to Determine if You Need an Export License, or watch this video, which explains the entire process in detail:
What Are Export License Exceptions?
An export license exception is an authorization that allows you to export or re-export items subject to the Export Administration Regulations (EAR) that would otherwise require a license, provided certain conditions are met. License exceptions cover items under the jurisdiction of the Department of Commerce, not items controlled by the State Department or other agencies.
There are two different types of license exceptions under the EAR:
- List-based exceptions: These are typically easier to use and are listed directly in the Export Control Classification Number (ECCN) entries.
- Transaction-based exceptions: These depend more on the specific circumstances of the transaction rather than just the ECCN.
The EAR imposes additional restrictions on using license exceptions for “600 series” items. These are goods that were moved from the United States Munitions List (USML) under the International Traffic in Arms Regulations (ITAR) to the less restrictive Commerce Control List (CCL) under the EAR. If your exports include these types of goods, you should review these restrictions as well.
List of Export License Exceptions
Here are the current export license exceptions available under the EAR. To learn more about each exception, including any restrictions on their use, reference Part 740.1 of the EAR. This list includes the newest license exceptions, effective December 2024, but because license exceptions can change, you should regularly consult the regulations to stay current.
List-Based Exceptions
GBS—Shipments to Country Group B Countries
License exception GBS authorizes exports and re-exports to Country Group B (see Supplement No. 1 to part 740) of those commodities where the Commerce Country Chart indicates a license requirement to the ultimate destination solely for reason National Security (NS) and identified by “GBS—Yes” on the CCL. See Part 743.1 of the EAR for reporting requirements for exports of certain commodities under License Exception GBS.
New License Exception: HBM—High Bandwith Memory
Effective on December 2, 2024, BIS placed new controls on high-bandwidth memory units under 3A090.c. At the same time, it created this new license exception to allow for the export of certain less advanced high-bandwith memory units as long as the conditions specified in Party 740.25 of the EAR are met.
New License Exception: IEC—Implemented Export Controls
Effective on September 6, 2024, BIS implemented export controls on several semiconductor, quantum and additive manufacturing items for national security and foreign policy reasons. This rule adds new Export Control Classification Numbers (ECCNs) to the Commerce Control List, revises existing ECCNs and adds a new license exception—Implemented Export Controls (IEC)—to authorize exports and reexports to and by countries that have implemented equivalent technical controls for these newly added items. This IEC chart lists eligible items and destinations.
LVS—Shipments of Limited Value
Each ECCN that lists the LVS exception also lists a corresponding value limit unique to that ECCN under its entry in the Commerce Control List. The LVS criteria are simple: if the value of the goods on a single order listed under a single ECCN does not exceed the LVS limit listed under that ECCN’s entry in the CCL, the export is eligible for this License Exception.
NAC/ACA—Notified Advanced Computing and Advanced Computing Authorized
License Exceptions NAC and ACA facilitate exports, re-exports and in-country transfers of certain advanced computing items classified under specific ECCNs in the CCL. These ECCNs typically cover high-performance computing equipment, such as microprocessors and microcontrollers, computer systems and encryption equipment.
License Exception NAC authorizes the export and re-export of eligible items to Macau and destinations in Country Group D:5, as well as to entities headquartered in or with a parent in these destinations, subject to specific criteria. License Exception ACA permits exports, reexports, and in-country transfers of these items to destinations within Country Groups D:1 and D:4, with exclusions for Macau and D:5 destinations. To use NAC or ACA, exporters must generally secure a written purchase order.
New License Exception: RFF—Restricted Fabrication Facility
Effective on December 2, 2024, BIS implemented export controls designed to impair China’s production of advanced semiconductors and other items that can be used in advanced weapon systems, AI and advanced computing in support of China’s military-civilian fusion program. At the same time, this rule create license exception RFF to allow certain facilities of entities on the Entity List to continue to receive certain legacy semiconductor manufacturing equipment and other items to produce non-advanced-node integrated circuits subject to certain requirements. Only Wuhan Xinxin/XMC is currently eligible for this new license exception.
STA—Strategic Trade Authorization
License exception STA was created in 2011. While it is not technically a list-based license exception, ECCNs often contain special conditions for using STA.
STA authorizes the export, re-export and transfer (in-country) of certain items on the CCL to destinations posing a low risk of unauthorized or impermissible uses. If items have multiple reasons for control, this exception can be used for exports to a list of 36 countries; if it has a National Security (NS) reason for control, it can be used for a smaller list of eight countries.
To prevent re-exports to unauthorized destinations, a prior statement from the consignee is required along with specific notification requirements. If an export is eligible for STA and one or more other license exceptions, the exporter may claim one of the other ones, which exempts them from the prior statement and notification requirements specific to license exception STA.
TSR—Technology and Software Under Restriction
License Exception TSR is available for exports and re-exports destined for countries in Country Group B for ECCNs with National Security (NS) as their only Reason for Control and with “TSR—Yes” listed under their entry on the CCL.
To be eligible for this license exception, the exporter must first obtain written assurance from the consignee that they will abide by certain conditions that are detailed in Part 740.6.
GOV—Governments, International Organizations, International Inspections Under the Chemical Weapons Convention, and the International Space Station
License exception GOV authorizes exports and re-exports to U.S. government agencies as well as exports and re-exports related to the United States’ participation in international treaties and agreements. It is explained in Part 740.11, which is divided into five sections:
1. International Safeguards
The International Atomic Energy Agency (IAEA) is an international organization that establishes and administers safeguards, including Additional Protocols, designed to ensure that special nuclear materials and other related nuclear facilities, equipment, and material are not diverted from peaceful purposes to non-peaceful purposes.
European Atomic Energy Community (Euratom) is an international organization of European countries with headquarters in Luxembourg. Euratom plays a similar role to IAEA, existing primarily to control the international trade of nuclear-related materials. This section authorizes exports and reexports of commodities or software to the IAEA and Euratom and reexports by IAEA and Euratom for official international safeguard use.
2. United States Government
This section authorizes exports, re-exports, and transfers (in-country) to personnel and agencies of the U.S. government and certain exports by the Department of Defense. These include all civilian and military departments, branches, missions, government-owned corporations, and other agencies of the U.S. government, but do not include such national agencies as the American Red Cross or international organizations in which the United States participates such as the Organization of American States.
3. Cooperating Governments and the North Atlantic Treaty Organization
The provisions of this section authorize exports, reexports and transfers (in-country) of the items listed in paragraph (c)(2) of this section to agencies of cooperating governments or agencies of the North Atlantic Treaty Organization (NATO). This includes all civilian and military departments, branches, missions, and other governmental agencies of a cooperating national government.
Cooperating governments are the national governments of countries listed in Country Group A:1 (see Supplement No. 1 to Part 740) and the national governments of Hong Kong, Singapore and Taiwan.
4. International Inspections Under the Chemical Weapons Convention (CWC)
The Organization for the Prohibition of Chemical Weapons (OPCW) is an international organization that establishes and administers an inspection and verification system under the Chemical Weapons Convention (CWC) designed to ensure that certain chemicals and related facilities are not diverted from peaceful purposes to non-peaceful purposes.
This section authorizes exports and reexports to the OPCW and exports and reexports by the OPCW for official international inspection and verification use under the terms of the CWC.
5. International Space Station (ISS)
The ISS is a research facility in a low-Earth orbit approximately 190 miles (350 km) above the surface of the Earth. The ISS is a joint project among the space agencies of the United States, Russia, Japan, Canada, Europe and Italy.
This section authorizes exports and reexports required on short notice of certain commodities subject to the EAR that are classified under ECCN 9A004 to launch sites for supply missions to the ISS.
MED—Medical Devices
License Exception MED permits the export, re-export or transfer of “medical devices” designated as EAR99 to or within Russia, Belarus, Crimea, and certain covered regions in Ukraine. This exception includes parts, components, accessories and attachments for use with these devices, provided these items are also EAR99-designated and meet additional specific conditions. The MED exception ensures that critical medical equipment can reach areas where it may be urgently needed. See 740.23 for more details.
RPL—Servicing and Replacement of Parts and Equipment
License exception RPL authorizes exports and re-exports associated with one-for-one replacement of parts, components, accessories and attachments. RPL also authorizes exports and re-exports of certain items currently subject to the EAR to or for, or to replace, a defense article described in an export or re-export authorization issued under the authority of the Arms Export Control Act. It does not, however, authorize the export or reexport of defense articles subject to the ITAR, i.e., described on the United States Munitions List (22 CFR 121.1).
SCP—Support for the Cuban People
Part 740.21 of the EAR explains the provisions of license exception SCP that authorizes certain exports and re-exports to Cuba that are intended to support the Cuban people by improving their living conditions and supporting independent economic activity; strengthening civil society in Cuba; and improving the free flow of information to, from and among the Cuban people.
TMP—Temporary Imports, Exports, Re-exports, and Transfers In-Country
License exception TMP authorizes various temporary exports and re-exports; exports and re-exports of items temporarily in the United States; and exports and re-exports of beta test software.
Part 740.9 details categories of items that are potentially covered under TMP. This includes tools of the trade, which refers to standard tools and equipment as well as software necessary for a business to carry out its day-to-day functions. Software used as a tool of trade must be protected from unauthorized access.
Other categories that may be eligible under the criteria of TMP include, but are not limited to, kits consisting of replacement parts or components; items used for exhibition and demonstration (such as demo products displayed at trade shows); equipment used for inspection, test, calibration and repair; containers; news media; returns; and shipments of items intended for disposal.
TSU—Technology and Software Unrestricted
License exception TSU authorizes exports and re-exports of operation technology and software; sales technology and software; software updates (bug fixes); mass market software subject to the General Software Note (see Supplement No. 2 to Part 774); and release of technology and source code in the United States by U.S. universities to their bona fide and full-time regular employees.
Note that encryption software subject to the EAR is not subject to the General Software Note.
Steps for Determining Export License Exceptions
Step #1: Find Your ECCN
Find the Export Control Classification Number (ECCN) for your items in the Commerce Control List (CCL). The CCL is divided into 10 broad categories, and the ECCN classification is a five-character code (for example, 3A981 for a polygraph machine).
Keep in mind that not all products are found on the CCL. In fact, most products aren’t, and they are classified as No License Required (NLR). However, the only way to determine that your goods don’t appear on the CCL is to check the list and eliminate possible matches.
Shipping Solutions Product Classification Software can make this process faster than manually searching the CCL.
Step #2: Check Reason for Control
Once you’ve found the correct ECCN, the regulations tell you the reason that item is controlled. These might include:
- Chemical and biological weapons
- Nuclear nonproliferation
- National security
- Missile technology
- Regional stability
- Firearms convention
- Crime control
- Terrorism
The CCL will list any license exceptions available for that ECCN and their conditions.
Step #3: Review General Prohibitions
If General Prohibitions 4-10 do not apply, go to the Commerce Country Chart in the CCL to determine if there is an “X” in the box or if some other licensing requirement is mandatory. If not, the item is No License Required (NLR). If so, move to step 4. Before going to a specific license exception, make sure there are no general restrictions.
Again, you can use technology to make this process faster and less cumbersome. The Shipping Solutions Export Controls Software will tell you if a license is required for your product based on the ECCN classification and the destination country. It will also tell you if any license exceptions are available, and the conditions related to those exceptions.
Step #4: Evaluate Available Exceptions
Review the license exceptions in Part 740 to determine if one is available for your situation. Each exception is unique, so make sure you meet all of the criteria. In addition, Part 740.2 outlines several restrictions for using a license exemption.
If you find a license exception for which you qualify and none of the exceptions apply to your shipment, you may use the license exception. If not, you need to apply for a license.
For Additional Help
While it’s true that anyone with sufficient training can reference the publicly accessible EAR in order to determine if their export shipment is eligible for a license exception, this process can be tedious, confusing and open to human error.
Shipping Solutions Professional export documentation and compliance software includes a License Determination tool that automatically screens the ECCNs of your products against the destination country and determines what reasons for control apply to the export and whether any license exceptions are available.
If you don’t need help with customs paperwork, we also offer a standalone web-based tool that works the same way.
Interested in learning more about how we can help you stay compliant in your international business? Schedule a free demo today!
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This article was first published in March 2016 and has been updated to include current information, links and formatting.