The International Trade Blog arrow Export Compliance

An Overview of the Export Administration Regulations

On: January 26, 2022    |    By: David Noah David Noah    |    10 min. read

An Overview of the Export Administration Regulations | Shipping SolutionsFor national security and foreign policy reasons, the United States maintains controls on the export and reexport of U.S.-origin goods and technology to all destinations around the world. The broadest range of these export controls are found in the Export Administration Regulations (EAR).

In this article, we’ll discuss the background of export regulations, look at the various agencies that control exports and provide an overview of the EAR.

What Is an Export?

An export is any movement of items outside the country. That includes items sent by regular mail or hand-carried on an airplane; documents transmitted by fax; software or specifications downloaded from the internet; and technology transmitted by email or shared in a phone conversation.

An item is considered an export even if it is only leaving the U.S. temporarily or if it is being returned to a foreign country. Finally, technology or data that is released to a foreign national located in the U.S. is also “deemed” to be an export.

Regulatory Agencies That Control Exports

New exporters are sometimes surprised that U.S. exporting is controlled by more than one set of regulations and more than one primary regulator. There are many regulatory agencies, all with differing regulations, to be aware of:

The Bureau of Industry and Security (BIS)

The Department of Commerce’s Bureau of Industry and Security administers the U.S. export control policy through the EAR. The EAR control the export of dual-use goods and goods that are not controlled by other regulations. The mission of the BIS is to advance U.S. national security, foreign policy and economic objectives by ensuring an effective export control and treaty compliance system and promoting continued U.S. strategic technology leadership.

Unsure how the entire export process works? Download this free guide: Export  Procedures and Documentation: An In-Depth Guide.

Directorate of Defense Trade Controls (DDTC)

The U.S. State Department’s Directorate of Defense Trade Controls (DDTC) regulates the export of defense articles under the Arms Export Control Act (AECA). The details of this act are found primarily within the International Traffic in Arms Regulations (ITAR). Goods regulated by the ITAR are detailed within the munitions list and are subject to an export licensing requirement by the State Department. Logically this list includes weaponry and military equipment.

You can review the ITAR here. They include an expanded list of embargoed destinations that goes beyond the embargoes listed within the EAR and allows for a process of statutory debarment. This is administered by the DDTC through the debarred parties list, one of the primary export restricted parties lists.

U.S. Census Bureau

Within the Department of Commerce, the FTR are administered by the Foreign Trade Division of the U.S. Census Bureau. The FTR have a dual purpose. They allow for the collection of statistical trade data, and also provide the tactical information required by the Bureau of Industry and Security and Customs and Border Patrol to perform their export oversight roles.

The FTR are primarily concerned with the reporting of an export shipment. These regulations contain details about the Automated Export System (AES) reporting requirements and exemptions. You can read the FTR here.

Office of Foreign Assets Control (OFAC)

The OFAC of the U.S. Department of the Treasury administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries. It also enforces sanctions against regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.

OFAC sanctions include the Specially Designated Nationals List and the Consolidated Sanctions List. You can search OFAC’s sanctions list here.

Other Agencies

There are additional regulatory agencies within the U.S. government that have a hand in exporting activity, including:

Once you know the regulatory agencies that exist, you need to know which one has control over your goods. While the majority of goods exported from the United States don’t require an export license, those that do, require some extra work.

You can learn about the product classification process in our article Export Codes: ECCN vs. HS, HTS and Schedule B.

Unsure how the entire export process works? Download this free guide: Export  Procedures and Documentation: An In-Depth Guide.

An Overview of the EAR

The EAR govern the export and reexport of items for reasons of national security, nonproliferation, foreign policy and short supply. A relatively small percentage of exports and reexports requires submission of a license to the BIS. Licensing depends on a product's technical characteristics, the destination country, the end user and a product's end use. You can access the EAR here.

Once an item’s classification has been determined, exporters can use a chart in the EAR to decide if a license is needed to export to a particular country.

EAR include answers to frequently asked questions, instructions for finding out if a transaction is subject to regulations, instructions for requesting a commodity classification or opinion, and directions for applying for a license.

Dual-Use Items

According to part 730.3 of the EAR, "a 'dual use' item is one that has civil applications as well as terrorism and military or weapons of mass destruction (WMD)-related applications." In other words, this includes items that were manufactured for civilian use but which could be used (or be modified to be used) for terrorism or military purposes.

Therefore, items that are subject to the EAR include purely civilian items, items with both civil and military application, items with terrorism or potential WMD-related applications, and items that are exclusively used for military purposes but are not controlled under the International Traffic in Arms Regulations (ITAR). Commercial items that fall under the jurisdiction of the EAR may have an ECCN code if it is considered a dual-use item.

Commerce Control List and ECCN

The first step for deciding whether or not a product requires an export license is to check the EAR. Most commercial items don’t have an ECCN. However, the only sure way to know is to check the Commerce Control List (CCL) in the EAR.

The ECCN is an alphanumeric classification found in the CCL. ECCNs specifically identify items that are subject to U.S. export control regulations and may require an export license. Goods that are traded at high volumes worldwide are generally not controlled.

The first step for deciding whether or not a product requires an export license is to check the EAR. If a product has a specific ECCN, the EAR will also list one or more reasons why it is controlled. Companies use these reasons to help them determine if they need to apply for an export license based on the countries to which they are exporting.

You can search for an ECCN code in a printed copy of the EAR or online at the BIS website. In addition, Shipping Solutions’ Product Classification Wizard allows you to search for the correct ECCN code by typing in a short description of your products.

Products that do not have an ECCN code and are not subject to control by any other U.S. agency are designated as EAR99. Products classified as EAR99 are low-technology consumer goods and usually do not require an export license. However, even EAR99 items require licenses for exporting to embargoed countries, to a restricted party or in support of a prohibited end use.

Export License Determination

As we share in our article No, You Probably Don't Need an Export License, But..., if your item has an ECCN classification, the CCL will also list the reason for control such as national security (NS), anti-terrorism (AT) or crime control (CC). (You'll find a more detailed explanation of these controls in this free white paper: How to Determine if You Need an Export License.) You'll use that designated reason for control with the EAR's Commerce Country Chart to determine whether an export license is required when exporting to specific countries.

Again, there are online tools available that can help you quickly make that determination. But don’t stop when you’ve determined that the goods are not on the Commerce Control List. If your item does not appear anywhere on the CCL, you need to check to see if it could be controlled for export by one of the other federal agencies (see above). If you are exporting an EAR99 item to an embargoed country, to a prohibited end user or in support of a prohibited end use, you may still be required to obtain a license.

Once you’ve determined that your item needs a license, and that it falls under jurisdiction of Commerce Department, you can go to the BIS SNAP-R website and begin the process of registration—more on that process here.

Using an ECP to Help with Export Compliance

According to BIS, “An Export Compliance Program (ECP) analyzes pieces of information and individual decisions and builds them into an organized, integrated system. It is a program that can be established to manage export-related decisions and transactions to ensure compliance with the [Export Administration Regulations] EAR.”

Most exporters never plan on doing something wrong in the eyes of the law. However, mistakes do happen, and the consequences can sometimes be devastating. Many exporters have faced fines, lost their export privileges or even gone to jail. A properly implemented ECP will help alleviate that risk by reducing the chances of violating export regulations. How does it do that?

  • An ECP provides a clear plan of how to audit your company's procedures and processes, so you can identify and address any potential violations before they surface.
  • A well-written ECP can substantially reduce penalties if your company violates export regulations, as long as you can document that you regularly follow the written ECP procedures. The BIS considers the presence of an ECP a strong mitigating factor when determining penalties.

Creating an ECP for your company does require some work, but it is a worthwhile endeavor for the health of your company. We detail the entire process of creating an ECP in our white paper How to Create and Implement an Export Compliance Program (ECP).

Where to Find Assistance with Export Regulations

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This article was first published in August 2018 and has been updated to include current information, links and formatting.


David Noah

About the Author: David Noah

David Noah is the founder and president of Shipping Solutions, a software company that develops and sells export documentation and compliance software targeted at U.S. companies that export. David is a frequent speaker on export documentation and compliance issues and has published several articles on the topic.

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