Source: https://cwc.gov/index.php/licensing/reexports-and-offshore-transactions
Timestamp: 2018-02-23 20:35:10
Document Index: 366086094

Matched Legal Cases: ['art 774', 'art 738', 'art 740', 'art 744', 'art 744', 'art 734', 'art 734', 'art 740', 'art 764']

Guidance on Reexports/Transfers (in-country) of U.S.-Origin Items or Non-U.S.-made Items Subject to the Export Administration Regulations (EAR)
If you are outside the United States and wish to reexport or transfer (in-country) an item (commodity, technology, or software) that is of U.S.-origin or that is subject to the Export Administration Regulations (EAR) (as described in more detail in Parts B-D below), your product may require a license or other authorization from the U.S. Department of Commerce's Bureau of Industry and Security (BIS). Certain additional restrictions are also outlined in part G below.
Determining whether your item is subject to the EAR.
Your item is subject to the EAR if it:
Was produced in the United States (See Part A);
Is a non-U.S.-made product that contains more than a specified percentage of controlled U.S.-origin content (See Part B);
Is a non-U.S.-made product based on certain U.S.-origin technology or software and is intended for export (from abroad) to specified destinations (See Part C); or
Was made by a plant or major component of a plant located outside the United States, and if that plant or major component of a plant is the direct product of certain U.S. technology or software, and your product is intended for export (from abroad) to specified destinations (See Direct Product Guidance ).
A. Determining whether the reexport or transfer (in-country) of a U.S.-origin item or a non-U.S.-made item that is subject to the EAR requires a license from BIS.
You may need to obtain a license or other authorization to "reexport" or transfer (in-country) an item that was produced in the United States. A "reexport" is the shipment or transmission of an item subject to the EAR from one foreign country (i.e., a country other than the United States) to another foreign country. A reexport also occurs when there is "release" of technology or software (source code) subject to the EAR in one foreign country to a national of another foreign country. In-country transfer or transfer (in-country) is a shipment, transmission, or release of items subject to the EAR from one person to another person that occurs outside the United States within a single foreign country. See deemed reexport guidance
Many items subject to the EAR do not need a license or other authorization to be reexported or transferred (in-country). But certain items are controlled and will either require a license or must qualify for a License Exception. License requirements apply particularly to items controlled by multilateral export control regimes. In addition, some destinations and persons (individuals or groups) are subject to comprehensive export controls, including controls on widely traded consumer products.
To determine whether your U.S.-origin product requires a license you will need the following three pieces of information:
The Export Control Classification Number (ECCN). Certain items, notably those controlled by multilateral export control regimes, are on the Commerce Control List (CCL) (Supplement No. 1 to part 774 of the EAR) and are included in a specific ECCN. If your item is not on the CCL, it may be classified as EAR99. EAR99 is a general category of goods and technology that encompasses many widely traded consumer and industrial items. These EAR99 items are subject to the EAR, but are not specifically described on the CCL. The ECCN in the CCL will also tell you the reason(s) for control.
The ultimate destination of the item. You will need to match the reason(s) for control Commerce Country Chart reference listed in the License Requirement section of the ECCN, e.g., NS Column 1, NP Column 2, or AT Column 1, with the country of ultimate destination in the Commerce Country Chart (Supplement No. 1 to part 738 of the EAR ). The reason(s) for control, when used in conjunction with the Commerce Country Chart, will help you to determine if a license is required to the ultimate destination. An "X" in the intersection of the reason for control column and the destination row represents a license requirement. If you determine that your reexport transaction requires a license, you should review the EAR to determine if any License Exceptions are available (part 740 of the EAR). For general information on License Exceptions, see part E below.
The end-user and end-use for the item. Even if you determine a license is not required based on the ultimate destination (or a license is required but a License Exception would apply), you may need to apply for a license because of the end-use or end-user. This is also the case for in-country transfers. There are certain special restrictions that apply to persons (or entities) identified in the EAR, as well as to persons whom you know or have reason to know are involved in weapons proliferation activities. There are also license requirements, prohibition, or restrictions on certain end-uses as described in Part 744 of the EAR . In most instances, a license is required to persons identified on the Entity List (Supplement No. 4 to part 744 ) for the reexport or transfer (in-country) of all items subject to the EAR (i.e., all items on the CCL and all items classified as EAR99). There is a consolidated list of prohibited or restricted parties.
Also keep in mind …
• If the item is a U.S.-origin item and subject to the EAR, it remains subject to the EAR regardless of how many times it is reexported, transferred, or sold.
• Therefore, any subsequent reexports or transfers (in-country) must be done in accordance with the EAR, including any items received prior to their movement from the USML to the CCL.
• When reexporting U.S.-origin items in the form received, use the classification of the U.S.-origin item
B. Determining whether your non-U.S.-made item that incorporates/bundles U.S.-origin content is subject to the EAR (De Minimis Guidelines).
As noted above, certain foreign-produced items are subject to the EAR because they incorporate or bundle more than a specified percentage value of U.S.-origin controlled content. The following steps are provided as general guidance for determining whether a foreign produced item (commodity, software, or technology) that incorporates/bundles U.S.-origin item(s) is subject to the EAR or is not subject to the EAR pursuant to the de minimis rules in the EAR. This general guidance does not take into account specific U.S.-origin items that are not eligible for de minimis treatment. You should consult Section 734.4 and Supplement 2 to Part 734 for information on such items and guidance on how to calculate the percentage of U.S.-origin controlled content.
1. General guidance regarding incorporation of U.S.-origin controlled commodities into non-U.S.-made items. If you are a company that incorporates U.S.-origin items into a non-U.S.-made items outside the United States you will need to -
. Determine the classification (ECCN) of the U.S.-origin commodities exported to you. The U.S. exporter may be able to assist you in determining the ECCN or you may submit a classification request to BIS via SNAP-R (free).
Determine if the U.S.-origin commodities are "controlled content." ("U.S. controlled content" is content that would require a U.S. license if it were to be reexported separately to the country of ultimate destination.)
Determine if the percentage of U.S.-origin "controlled content" is greater than the percentages outlined in the de minimis guidelines
If the U.S.-origin controlled content is greater than the de minimis percentage, your non-U.S.-made item is subject to the EAR.
If your non-U.S.-made item is subject to the EAR, you need to determine if your non-U.S.-made item requires a license, either because of the ultimate destination or the end-use or end-user. To do this, follow the steps outlined in Part A
2. Guidance regarding non-U.S.-made software incorporating or bundled with U.S.-origin controlled software and non-U.S.-made technology commingled with or drawn from U.S.-origin controlled technology. If you incorporate U.S.-origin software into your non-U.S.-made software, or you bundle U.S.-origin software with non-U.S.-made hardware, or if your non-U.S.-made technology is commingled with or drawn from U.S.-origin controlled cotechnology, you would follow a process similar to the one outlined above. That process and a related one-time reporting requirement for technology commingling are set forth in Section 734.4 and Supplement 2 to part 734 of the EAR. If there is no fair market value for the technology or software, you may use any reasonable method to determine the cost of the US-content, e.g., production cost or cost per line of code. You may run your method ideas by us at This email address is being protected from spambots. You need JavaScript enabled to view it.,
C. Determining if your non-U.S.-made item is subject to the EAR because it is the direct product of U.S. technology or software.
Non-U.S.-made direct products may be subject to the EAR if they are the direct product of certain types of U.S. technology or software (source code) and are going to specified destinations. See the Direct Product Guidance for specific details.
D. Determining if your non-U.S.-made item that is subject to the EAR requires a license from BIS.
Follow the steps in Section A of this webpage.
E. Is your non-U.S.-made item eligible for a License Exception?
In certain instances, if your reexport or transfer (in-country) transaction requires a license, you may be able to use one of the License Exceptions set forth in Part 740 of the EAR. A License Exception allows you to reexport or transfer (in-country) an item without applying for a license, provided your transaction meets all the terms and conditions of the License Exception and none of the restrictions of Section 740.2 of the EAR apply.
Are there any special restrictions I should know about?
You may not reexport an item subject to the EAR to a party whose export privileges have been denied by BIS. Information on parties subject to denial orders see the Denied Persons List.
In addition, the U.S. Government has a list called The Consolidated Screening List (CSL), which lists parties for which the United States Government maintains restrictions on certain exports, reexports or transfers of items.
Please note that U.S. persons may be subject to additional restrictions under the EAR. See Section 744.6 of the EAR. U.S. persons may also be subject to restrictions under other U.S. Government regulations, such as those issued by the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury.
Items exported under License Exception STA may not be reexported under License Exception APR
Why should you comply with reexport license requirements?
The Department of Commerce has enforcement and protective measures available to it to ensure that recipients of items subject to the EAR comply with the reexport license requirements of the EAR. If the Department of Commerce determines that you have not complied with these requirements and restrictions, it may institute administrative enforcement proceedings, resulting in the possible imposition of civil penalties and/or denial of your eligibility to receive U.S. exports (part 764 of the EAR). See examples of foreign companies that are on the Denied Persons List.
Where to apply for a reexport license?
If your reexport or transfer (in-country) requires a license and is not eligible for a License Exception, you may apply for a reexport license electronically through the Simplified Network Application Process Redesign (SNAP-R). You may find the basic information on the SNAP-R program on this Web site. If you have not submitted an application electronically before, you must first obtain a Company Identification Number (CIN)./index.htm
Additional information and contacting BIS
The BIS webinar, De minimis and Direct Product Rules Click Here, with a transcript and supporting documents, contains additional information.
If you need help regarding a reexport license application or product classification request, or wish to obtain basic information on U.S. export controls, please consult the main BIS Web Site (in English) or the free on-line training Click Here.