The sale of products and services from the U.S. overseas or otherwise to foreign nations requires a review of export regulations that may be applicable to the transaction. For the sale and export of certain commercial and military items, the regulations that require review are known as the Export Administration Regulations ("EAR").
The EAR, promulgated under Title 15, Chapter VII, Subchapter C of the Code of Federal Regulations (and its supplements) by the U.S. Department of Commerce (through its Bureau of Industry and Security), regulate the export of goods and services that are found on the Commodity Control List as well as regulate certain U.S. person activities related to anti-boycotting of U.S. friendly foreign nations. The EAR formally state that they are intended to serve the national security, foreign policy, nonproliferation, and short
supply interests of the United States and, in some cases, to carry out
its international obligations. See 15 CFR 730.6
If an item is being exported under the EAR, the next determination to make is whether such product or service falls with the EAR Commerce Control List. The Commerce Control List, or the CCL for short, is found at 15 CFR 774 (including Supplement #1) and include predominantly dual use products and services that have a military use as well as a civil or commercial use. Categories of products and services include nuclear materials, chemicals and micro organisms, materials processing, electronics, computers, telecommunications, information security, lasers and sensors, marine items, navigation and avionics and propulsion systems.
If the product or service is being exported under the EAR and is found on the CCL, then the next determination is to match the particular ECCN assigned to that product or service with the Commerce Country Chart found in 15 CFR Sec. 738. A relatively small percentage of exports and reexports subject to the
EAR actually match up to a country on the Commerce Country Chart. The countries most likely affected include embargoed countries such as Iran, Cuba, North Korea, Sudan and Syria.
If the product or service (i) is being "exported", (ii) is on the CCL and (iii) is being exported to a country that matches up to the Commerce Country List as requiring further due diligence, the export administrator, then an application for an export license must be made to the BIS. The license application will then be issued to permit such export under the terms as applied for.
In later series of this journal, we will discuss more about the EAR and export controls in particular.