Source: http://www.bis.doc.gov/index.php/licensing/reexports-and-offshore-transactions/direct-public-guidelines/22-licensing/reexports-and-offshore-transactions
Timestamp: 2015-10-07 13:49:56
Document Index: 758522350

Matched Legal Cases: ['§ 736', 'art 748', '§ 740', 'art 774', 'art 740', 'art 774', 'art 740', 'art 740', 'art 742', '§ 734', 'art 734', 'art 740', '§ 734']

General Prohibition No. 3: Direct Product Rule § 736.2(b)(3) of the EAR (as modified on 9/18/15)
(A) Foreign-made items produced from U.S. non-“600 series” and non-9x515 technology or software, OR from a foreign made manufacturing plant or major plant component (made from U.S. non-“600 series” or non-9x515 technology) are subject to the EAR and may require a license or license exception for export from abroad if all of the following apply:
(1) The U.S. technology or software requires a written assurance as a supporting document for a license as defined in part 748 Supp. 2 (o)(3)(i), or as a precondition for use of License Exception TSR in § 740.6 or the EAR (Generally, this means the U.S. technology/software is controlled for NS reasons);
(2) The foreign produced item is subject to national security (NS) controls as designated in the ECCN on the CCL (Supp. No. 1 to part 774 of the EAR); and
(3) The foreign produced item is destined to a destination listed in Country Group D:1, E:1 or E:2 (Supp. No. 1 to part 740 of the EAR).
(B) Foreign-made items produced from U.S. “600 series” or 9x515 technology or software, OR from a foreign-made manufacturing plant or major plant component (made from U.S. “600 series” or 9x515 technology) are subject to the EAR and may require a license or license exception to export from abroad if all of the following apply:
(1) The foreign-made product is made from “600 series” or 9x515 U.S. technology or software;
(2) The foreign-made product is specified under a “600 series” ECCN, ECCN 0A919 or 9x515 of the CCL (Supp. No. 1 to part 774 of the EAR); and
(a) For “600 series” U.S. controlled content, the destination of the foreign-made product is listed in Country Group D:1, D:3, D:4, D:5, E:1 or E:2 (Supp. No. 1 to part 740 of the EAR); or
(b) For 9x515 U.S. controlled content, the destination of the foreign-made product is listed in Country Group D:5, E:1 or E:2 (Supp. No. 1 to part 740 of the EAR).
NOTE: “600 series” or 9x515 foreign-produced direct products of U.S technology or software subject to GP3 do not require a license for export from abroad to the new destination unless the new destination would have been prohibited or made subject to a license requirement by part 742, 744, 746, or 764 of the EAR.
De minimis Rules Guidelines - as modified on 9/18/15
(§ 734.4 and Supplement No. 2 to part 734 of the EAR)
• IF ... • Foreign-made commodity incorporates controlled U.S.-origin commodities • Foreign-made commodity is 'bundled' with controlled U.S.-origin software, • Foreign-made software is commingled with controlled U.S.-origin software, or • Foreign-made technology is commingled with controlled U.S.-origin technology,
• THEN... the Foreign-made item is subject to the EAR if the U.S.-origin controlled content exceeds: • “600 s eries” & 9 x5 1 5 .a - .x items: 0% to Country Group D:5, 25% to all other destinations. • “600 s e ries” & 9x515 .y items: 0 % to China or Country Groups E:1 or E:2, unlimited to all other destinations. • Non- “600 series” & non-9x515 items: 10 % to Country Group E:1, 25 % to all other destinations. • Non- “600 series” & non-9x515 AT only: 10 % to Country Group E:1, unlimited to all other destinations. • E A R 9 9 : 10 % to N. Korea and Syria (except food and medicines), unlimited to all other destinations.
• “Controlled content” = US-origin items that require a license or LE to the ultimate destination of the foreign product. • EAR99 items are considered “controlled content” for certain sanctioned countries. • Fair Market Value of the “controlled content” is needed to calculate de minimis percentage
• Content that you don’t have to count: License Exception GBS or items that do not require a license to the ultimate destination of the foreign product (NLR designated items). • Content that is not eligible for de minimis treatment • U.S.-origin “600 series” & 9x515 content when the foreign-made items are destined to Country Group D:5 of Supp. No. 1 to Part 740. • Certain 9E003 technology • Certain U.S. origin components of high performance computers • Encryption 5E002, and encryption commodities and software that don't meet the eligibility criteria in § 734.4(b) • QRS 11 if in commercial standby instrument system or commercial aircraft w/such system • Foreign made military commodities that incorporate cameras classified under ECCN 6A003.b.4.b
• U.S. items are 'incorporated' when all of the following conditions are met: • They are essential to the functioning of the foreign equipment, • They are customarily included in the sale of foreign-made items, and • They are reexported with the foreign produced item. • Bundling • Software that is configured for a specific commodity, but is not necessarily physically integrated into the commodity. • Eligible software is software that is listed on the Commerce Control List (CCL) and is controlled for anti-terrorism (AT) reasons or software that is designated EAR99 (subject to the EAR, but not listed on the CCL).
• One-time report required for technology • Percentage of U.S. content by value • Description of your calculations • Values, assumptions, methodologies • Export price of U.S. content • Description and fair market value of the foreign technology • If over the de minimis limit ... • Classify the foreign product (self-classification vs BIS classification) • Determine License Requirements • Determine License Exception eligibility • Obtain any necessary authorization