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Export License Exceptions and Exemptions: What You Need to Know

Export control licenses are the authorization mechanisms that enable the U.S. government to regulate the export and reexport of goods and technologies. Depending on the circumstances however, it is possible that an Exception or an Exemption may be available. The differing terms reflect that the U.S. has two similar but different sets of export regulations. There are long-running efforts to consolidate them but for the foreseeable future, exporters must contend with two regulatory jurisdictions.

ITAR vs EAR – What’s the Difference?

If your products or services pertain to the military, they may be controlled under the auspices of the International Traffic in Arms Regulations (ITAR). If they are commercial in nature, your items will instead be under the auspices of the Export Control Regulations (EAR).  What is the difference? In broad terms, the ITAR is simple but strict whereas the EAR is much more nuanced. There is also the issue that several key terms are not harmonized between the two sets of regulations.  As such, license exemptions (precluding the need for a license) under the ITAR are relatively few and narrowly available, especially when compared to the license exceptions available under the EAR, which are much more common, diverse, and business-friendly.

EAR License Exceptions You Should Know

A License Exception allows you to export or reexport items subject to the Export Administration Regulations (EAR) without obtaining an individual license. Available exceptions are noted inside the various ECCNs (Export Control Classification Numbers) that make up the Commerce Control list. They are best known by their three-letter abbreviations or acronyms, such as:

  • LVS - Limited Value Shipment: Allows exports of low-value items without a license.
  • TSR - Technology & Software under Restriction: Permits technology transfers without a license.
  • APP - Computers: Covers exports of computers and related software.
  • NAC - Notified Advanced Computing: For specific high-performance computers.
  • TMP - Temporary Imports, Exports, Re-exports, and Transfers (IN-COUNTRY): Facilitates temporary movements of items.

There are several other exceptions potentially available, depending on the particulars of the transaction.

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License exemptions might save you time and money when exporting your products. Learn where to look, based on your products’ attributes, and how to interpret the ruling.

ITAR License Exemptions for Military Exports

Exemptions are export scenarios involving military items where the applicable export control regulations, that is, the International Traffic in Arms Regulations (ITAR), do not apply. Such exemptions under the ITAR are relatively few and narrow in scope compared to those available in the EAR.

    This exemption applies to fundamental research conducted at universities and other institutions. It allows the free exchange of information without export controls. Research results are exempt unless they are specifically restricted by the sponsor or involve proprietary information.
    Information already in the public domain or publicly available is exempt from export controls. This includes published materials, open-source software, and publicly accessible websites.
    Educational institutions can share technology and software with foreign students without getting a license. However, this exclusion doesn’t apply to certain sensitive technologies.

Final Takeaways: Utilizing License Exceptions and Exemptions Effectively

Understanding the availability of license Exceptions and Exemptions can be crucial for businesses engaged in international trade. Not only do they save time and money, they also provide flexibility while ensuring compliance with export control regulations. If you are uncertain about the applicability of exceptions or exemptions in specific scenarios or need further details, feel free to contact the experts at CTP for assistance.

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