Export Controls

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Export Controls Classifying Items

• NCURA
• Regional Spring Meeting
• April 27, 2008

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Laws and Regulations
Commerce Department State Department Treasury Department
Export Administration Act Arms Export Control Act Trading with the Enemy Act, Intl Emergency Economic Powers Act, Others
Export Administration Regulations (EAR) 15 C.F.R. Parts 700-799 International Traffic in Arms Regulations (ITAR) 22 C.F.R. Parts 120-130 Iraq Sanctions Regulations, Terrorism Sanctions Regulations, Others 31 C.F.R. Parts 500-599
Commerce Control List 15CFR Part 774 U.S. Munitions List 22 CFR Part 121 List of Specially Designated Nationals Blocked Persons
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Commerce Control List (CCL) Categories under the
EAR

• 5 Telecommunications and Information Security
• 6 Lasers and Sensors
• 7 Navigation and Avionics
• 8 Marine
• 9 Propulsion Systems, Space Vehicles and
  Related Equipment

• 0 Nuclear Materials, Facilities and Equipment
  and Misc.
• 1 Materials, Chemicals, Microorganisms and
  Toxins
• 2 Materials Processing
• 3 Electronics
• 4 Computers

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CCL Five Product Groups

• Within each category, items are arranged by
  group. Each category contains the same five
  groups. Each Group is identified by the letters
  A through E, as follows
• A Systems, Equipment and Components
• B - Test, Inspection and Production Equipment
• C - Materials
• D - Software
• E - Technology
• (Specific information necessary for the
  development, production, or use of a
  product, including technical data or technical
  assistance. Technical data may take forms
  such as blueprints, plans, diagrams, models,
  formulae, tables, engineering designs and
  specifications, manuals and instructions.)

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Export Control Classification Numbers (ECCNs)

• Category
• Group
• Item
• 3A001 Electronics components, as follows (see
  List of Items Controlled)

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Examples of Items Covered by Category 3 -
Electronics

• GROUP A Systems, Equipment, and Components
• 3A001 examples
• Microprocessor microcircuits, micro-computer
  microcircuits, and microcontroller microcircuits
  manufactured from a compound semiconductor and
  operating at a clock frequency exceeding 40MHz
  or
• storage integrated circuits manufactured from a
  compound semiconductor or
• Microwave integrated circuits or modules having
  all of the following containing monolithic
  integrated circuits having one or more active
  circuit elements, and operating at frequencies
  above 3GHz

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Examples of Items Covered by Category 3 -
Electronics

• GROUP B Test, Inspection and Production
  Equipment(3B001)
• Equipment for the manufacturing of semiconductor
  devices or materials and specially designed
  components and accessories therefor.
• Equipment designed for epitaxial growth capable
  of producing a layer thickness uniform to less
  than /-2.5 across a distance of 75 mm or more
• Molecular beam epitaxial growth equipment using
  gas or solid sources
• Equipment design for ion implantation, having any
  of the following
• A beam energy (accelerating voltage) exceeding
  1MeV or
• Being specially designed and optimized to operate
  at a beam energy (accelerating voltage) of less
  than 2keV or
• Direct write capability or
• A beam energy of 65keV or more and a beam current
  of 45 mA or more for high energy oxygen implant
  into a heated semiconductor material substrate

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Examples of Items Covered by Category 3 -
Electronics

• GROUP C Materials
• Hetero-epitaxial materials consisting of a
  substrate having stacked epitaxially grown
  multiple layers of any of the following
• Silicon
• Germanium
• Silicon Carbide, or
• III/V compounds of gallium or indium
• Resist material and substrates coated with
  controlled resists
• Positive resists designed for semiconductor
  lithography specially adjusted for use at
  wavelengths below 350 nm
• All resists designed for use with electron or ion
  beams with a sensitivity of 0.01 ucoulomb/mm2 or
  better
• All resists designed for use with X-rays, with a
  sensitivity of 2.5mJ/mm2 or better
• All resists optimized for surface imaging
  technologies, including silylated resists.

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Examples of Items Covered by Category 3 -
Electronics

• GROUP D Software
• Software specially designed for the development
  or production of equipment controlled by
  3A001.b to 3A002.g or 3B (except 3B991 or 3B992)
• Software specially designed for the use of
  stored program controlled equipment controlled
  by 3B (except 3B991 992)
• Computer-aided-design (CAD) software , having all
  of the following
• Designed for the development of semiconductor
  devices or integrated circuits, and
• Designed to perform or use any of the folllowing
• Design rules or circuit verification rules
• Simulation of the physically laid out circuits
  or
• Lithographic processing simulators for design.

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Examples of Items Covered by Category 3 -
Electronics

• GROUP E Technology
• Technology for the development or
  production of equipment or materials controlled
  by 3A (except 3A292, 3A980, 3A981, 3A991 or
  3A992), 3B (except 3B991 or 3B992) or 3C
• Technology for the development or
  production of microprocessor microcircuits,
  microcomputer microcircuits and microcontroller
  microcircuits having a composite theoretical
  performance (CTP) of 530 million theoretical
  operations per second (MTOPS) or more and an
  arithmetic logic unit with an access width of 32
  bits or more
• Technology for the use of equipment or
  software controlled by 3A001.a.1 or .2, 3A101,
  or 3D101
• Technology for the development of software
  controlled by 3D101

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Examples of Items Covered by Category 1
Materials, Chem, Microorganisms, Toxins
Category Example
Systems, Equip Components Chemical Agents, including tear gas containing 1 or less of CS or CN, except containers net wt lt20gm
Test, Inspection, Prod. Equip. Electrolytic cells for fluorine production with a production capacity gt250 g of fluorine per hour
Materials Chemical precursors for toxic chemical agents (1C350) (sodium bifluoride) human pathogens, zoonoses, and toxins (1C351) (Rickettsia rickettsii, Chlamydia psittaci) animal pathogens (1C352) (goat pox virus) plant pathogens (1C354)
Software Software for process control that is specifically configured to control or initiate production of chemicals controlled by 1C350
Technology Technical data for the development of production of any of the above items
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Using the Commerce Control List

• A good explanation of the structure of the CCL,
  how to read the ECCNs, and how to determine if an
  export license is required is found in Part 738.
  A good diagram of the process is found in Part
  732, Supplements 1 2
• Start by finding the commodity on the CCL. Note
  the ECCN number and check the reason for
  control at the beginning of each entry, under
  License Requirements

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Using the Commerce Control List Reason for
Listing

• NS National Security
• RS Regional Stability
• SS Short Supply
• UN United Nations Embargo
• SI Significant Items
• SL Surreptitious Listening

• AT Anti-Terrorism
• CB Chemical Biological Weapons
• CC Crime Control
• CW Chemical Weapons Convention
• EI Encryption Items
• FC Firearms Convention
• MT Missile Technology
• NP Nuclear Non-Proliferation

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Using the Commerce Control List

• Check the country list at EAR Part 738,
  Supplement 1
• Determine whether country to which item will be
  shipped has check (X) under the applicable
  reason for control column
• If no (X), ship item as NLR (No License
  Required). See EAR Parts 758 and 762 for export
  clearance procedures and recordkeeping
  requirements for NLRs.
• If box is checked for the country under the
  applicable reason for control column, then a
  license may be required.

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Using the Commerce Control List

• Check License Exceptions heading that appears
  after the License Requirements section for the
  ECCN. See EAR Part 740 for all license
  exceptions. Some commonly used ones are
• LVS Limited Value Shipment (Part 740.3)
• CIV Civil End-Users (Part 740.5)
• TSR Technology Software under Restriction
  (Part 740.6)
• CTP Computers (Part 740.7)
• TMP Temporary Imports, Exports, Reexports
  (Part 740.9) (See Tools of Trade for personal use
  abroad, at 740.9(a)(2)(i) and Beta Software at
  740.9(c))
• TSU Technology and Software Unrestricted (Part
  740.13)(See publicly available encryption
  source/object code at 740.13(e) and(f))
• BAG Baggage (Part 740.14)
• ENC Encryption Commodities and Software (Part
  740.17)

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Using the Commerce Control List

• If no license exception applicable, apply for
  license using BIS-748P or SNAP-R
• Note Many ECCNs have more than one reason for
  control. Each reason must be checked on the
  country chart before concluding No License
  Required (NLR)
• Note Each license exception has specific
  criteria that must be met to qualify for the
  license exception. Also, many license exceptions
  require special record-keeping and some require
  notification to the government of use of the
  license exception. See especially the
  notification requirements described in EAR Part
  742.15(b)(1) and (b)(2) for certain encryption
  items controlled under ECCNs 5A992, 5D992, and
  5E992.

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Using the Commerce Control List

• Note In addition to checking the Reason for
  Control/Country Chart, as well as the License
  Exceptions, there are General Prohibitions
  listed in EAR Part 736. Whether the shipment
  will be subject to one of these prohibitions
  depends upon 1) the ECCN classification of the
  item 2) the destination 3)the end-user 4) the
  end-use and 5) conduct. Prohibitions 4-10 are
• Denial Order issued under EAR Part 766
• Export to prohibited end-uses or end-users under
  EAR Part 744
• Export to embargoed destination described in EAR
  Part 746
• Support of Proliferation Activities described in
  EAR Part 744
• Intransit Shipments through specified countries
  listed in EAR Part 736(b)(8)(ii)
• Violation of terms and conditions of an exception
  or license
• Proceeding with knowledge that a violation has or
  is about to occur
• Practical tip start by screening the end user.
  If the end user cant receive the shipment,
  theres no point in classifying the item.

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Using the Commerce Control List

• If the commodity does not appear on the CCL, then
  the item is shipped under category EAR99, NLR
  (unless Prohibitions 4 through 10 apply).
• If you have trouble locating the Section of the
  CCL that includes the commodity you are looking
  for, try the alphabetical listing of all items on
  the CCL found at EAR Part 774, Supplement 1, and
  then work backwards to the ECCN
• Search for items by both the common name and
  scientific name. Consult with the faculty
  member. If you conclude the item is not included
  in the CCL, write a note to the file documenting
  the search conducted.
• If you arent sure, you can contact your BIS
  regional office or request a Commodity
  Classification (See Part 748.3)

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ExampleClassifying a piece of equipment under
the EAR
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• A faculty member in your Criminal Justice
  department is working with a colleague at the
  University of Iceland in Reykjavik who is testing
  the scientific validity of polygraph
  measurements. He wants to ship a U.S. polygraph
  to his colleague.

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Example Shipment of Polygraph (Basic Steps)

• Step 1 - Classification of item. Start by
  looking in the Commerce Control List under the
  category of electronics (Category 3) and product
  group which covers equipment (Product Group A).
  Then read through the list to find whether your
  item is included in the list. The ECCN for
  polygraphs is 3A981.
• Step 2 License requirements. These list the
  reason that the item is controlled. Polygraphs
  are controlled for CC, or crime control.

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Example Shipment of Polygraph (Basic Steps)

• Step 3 Destination Country. Check whether a
  license is required for the country.

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Example Shipment of Polygraph (Basic Steps)

• Step 4 Screening. Certain individuals and
  organizations are prohibited from receiving U.S.
  exports.
• Entity List BIS list of organizations
  identified as engaging in activities related to
  the proliferation of WMD.
• Specially Designated Nationals and Blocked
  Persons List OFAC list of individuals and
  organizations representing restricted countries
  or known to be involved in terrorism or narcotics
  trafficking.
• Unverified List BIS list of firms for which it
  was unable to complete an end-use check.

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ITAR - U.S. Munitions List

• I - Firearms
• II - Artillery Projectors
• III - Ammunition
• IV - Launch Vehicles, etc...
• V - Explosives, Propellants, Incendiary Agents
  and Their Constituents
• VI - Vessels of War and Special Naval Equipment
• VII - Tanks and Military Vehicles
• VIII - Aircraft and Associated Equipment
• IX - Military Training Equipment
• X - Protective Personnel Equipment
• XI - Military Electronics
• XII - Fire Control, Range Finder, Optical and
  Guidance and Control Equipment

• XIII - Auxiliary Military Equipment
• XIV - Toxicological Agents and Equipment and
  Radiological Equipment
• XV - Spacecraft Systems and Associated Equipment
• XVI - Nuclear Weapons Design and Related
  Equipment
• XVII - Classified Articles, Technical Data and
  Defense Services Not Otherwise Enumerated
• XVIII - Reserved
• XIX - Reserved
• XX - Submersible Vessels, Oceanographic and
  Associated Equipment
• XXI - Miscellaneous Articles

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ITAR U.S. Munitions List

• The list of items controlled under ITAR is more
  straightforward and is only 40 pages long. There
  are no subdivisions within categories.
• Some of the items listed are broadly defined,
  such as those included in Category XV, Spacecraft
  Systems and Associated Equipment
• a) Spacecraft, including . . scientific
  satellites, research satellites, etc.
• b) Ground control stations for telemetry,
  tracking and control of spacecraft or satellites
• c) All specifically designed or modified systems,
  components, parts, accessories, attachments, and
  associated equipment for articles in this category

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ITAR U.S. Munitions List

• Many of the other broad category items are
  qualified with the phrase specifically designed
  or modified for military application
• There is no country chart or categories of
  license exception if the article is on the
  list, you will need to secure a license for
  permanent or temporary export or temporary import
  of the item.

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EXERCISES
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Dos and Donts

• Do NOT ship any item outside the U.S. without
  first checking the ITAR and EAR Lists to
  determine if the item is controlled (This
  includes outgoing MTAs, software licenses, and
  any agreement deliverables)
• Secure license approval or verify license
  exception PRIOR to Shipment for all controlled
  items
• Make sure that technical data about export
  controlled commodities in in public domain
  (ITAR term) or qualifies as publicly available
  (EAR term), so that a license for shipment of
  technical data out of the U.S. is not required
  and that the deemed export rule to a foreign
  national in the U.S. does not apply.
• Qualify software as publicly available, or
  otherwise secure licenses prior to shipment if
  the software is on CCL or USML

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QUESTIONS?