The U.S. government has various export control regulations that serve a crucial function in upholding national security and to promote different foreign policy interests. They expect businesses, who export, to ensure they comply with the appropriate regulatory standards and failure to do so can result in a variety of different penalties. So, what do you need to know?
Meaning of the Term ‘Export’
Exporting is not just as simple as transmitting goods or articles outside the U.S. While most of us will think of exports being shipping containers on vessels, moving around the world, there are many other aspects of this you need to consider.
For example, if a person who is not a U.S. national, or a green card holder, but is in the employment of a U.S. based company, views sensitive or controlled information, the company will be deemed to have exported such information to that person’s home country.
Exporting also includes sending a package through U.S. mail, han-carrying a shipment, and transmitting technical data/technology electronically,
Who controls Exports in the U.S?
The Export Administration Regulations, administered by the Bureau of Industry and Security, under the Department of Commerce, regulates commercial and “dual-use” items.
Meanwhile the International Traffic in Arms Regulations, administered by the Directorate of Defense Trade Controls, under the Department of State, regulates defense articles, services, and technical data.
Steps to Take Before Exporting
The major steps you should consider before exporting include:
- Determining the jurisdiction (Is your product or service controlled under the ITAR or the EAR?);
- Determining the United States Munitions List (USML) Category, if it is controlled under the ITAR, or the Export Control Classification Number (ECCN), if it is controlled under the EAR.
- Determining if a license is required to export or if an exception/exemption applies;
- Ensuring no restricted or prohibited end-users or end-uses (like groups, countries or individuals) are linked or involved in the export transaction;
- When exceptions are not available for the specific transaction, filing and receiving the requisite license prior to exporting.
Benefits of Being Familiar with Export Control Laws
It is important of stay abreast of export control laws as penalties for contravention can be severe depending on the pervasiveness of the violations and non-compliance. Penalties can be civil or criminal and include seizure of a company’s export shipments, fines, and debarment.
Registration Required Under ITAR
Under the International Traffic in Arms Regulations (ITAR), a company is required to register with the Directorate of Defense Trade Controls if it is a manufacturer or exporter of defense articles or furnishes defense services. The yearly registration fee starts at $2,250, so you will need to factor this into your business planning.
About Trade Consulting Services
At Trade Consulting Services, we help our clients manage the intricacies of the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR). We know that it can be confusing and are here to help.
If your business is about to start exporting, or currently does, and you aren’t 100% confident you comply with the necessary regulations, contact us today by calling 214-810-0204 or e-mailing [email protected].
Export with confidence. Export with Trade Consulting Services.