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Export Licensing: Essential Facts

There are multiple aspects to export licensing requirements and procedures. Companies need to determine what regulations will apply, what licensing portal to use, what exceptions or exemptions might be available, what type of license is needed, and what records need to be kept. It may seem daunting, but we will explain all these aspects below and CTP experts are available to clarify and resolve your export licensing issues.

How Classification Influences Export Licensing

For companies to determine their licensing requirements, they must first compare their products, software, services and technologies against the entries on the U.S. control lists. This analytical process is called export classification. Following the mandated Order of Review, the classification expert must look first at the 21 categories of the United States Munitions List (USML), maintained by the State Department. If the company's item is not described there, the expert looks next to the (Department of) Commerce Control List (CCL), which is composed of hundreds of Export Control Classification Numbers (ECCNs). If the item is also not listed on the CCL, it falls to the least restrictive classification, known as EAR99.

Understanding Exceptions and Exemptions in Export Licensing

After the classification process, you know whether your product is controlled under the International Traffic in Arms Regulations (ITAR) for military items, or the Export Control Regulations (EAR) which covers commercial and dual-use items. Among other things, this knowledge enables you to check on possible licensing exemptions or exceptions. Exemptions under the ITAR are relatively few and strict compared to the exceptions available under the EAR, which are common, diverse, and business-friendly. Note: The similar wording (exceptions vs exemptions) reflects the fact that there are TWO sets of export regulations, and the terminology has not yet been harmonized.

A Guide to Using the DECCS & SNAP-R Licensing Portals

The DECCS portal is operated by DDTC (Defense Direct of Trade Controls) within the State Department while the SNAP-R portals is operated by BIS (Bureau of Industry and Security) within the Department of Commerce. Both are modern and dramatically more efficient than the older methods. Which portal to use in any exporting situation depends on whether the item in question is described on the USML or the CCL. Both portals enable companies to submit licenses electronically, track the progress of applications, provide technical information, and monitor existing licenses. Exporters can do this work directly or authorize 3rd party experts, like CTP, to act on their behalf.

If you’re unsure which portal to use, you’ll be able to submit an official determination, called a CJ request, to confirm.

Enhanced Military Licensing Through DECCS

DECCS is the relatively recent successor to D-Trade and to use it, companies must first gain and maintain registration with the appropriate authority at the State Department, that is, the Directorate of Defense Trade Controls (DDTC). There is initial paperwork and an annual fee but DECCS provides users with access to various DDTC business applications through a single, cloud-based portal. DECCS is used by the government officials at DDTC to: - Register entities involved in brokering, manufacturing, exporting, or temporarily importing defense articles or defense services listed on the U.S. Munitions List (USML).

  • Adjudicate requests for licenses or other authorizations.
  • Support determinations regarding requests for commodity jurisdiction (CJ) determinations.
  • Facilitate the issuance of requests for advisory opinions.

Utilizing SNAP-R for Commercial Export Licenses

SNAP-R is the electronic licensing system that is administered by BIS (Bureau of Industry & Security) at the Department of Commerce. It is free and relatively simple and once they set up their account, companies can use SNAP-R to apply for, and manage, their export licenses for dual-use items under the auspices of the EAR (Export Administration Regulations). Exporters can use this portal directly or authorize 3rd party experts, like CTP, to work on their behalf.

Export License Types Overview of Export License Types

There are a variety of licenses available from both SNAP-R and DECCS, depending on the situation and the required authorization. Besides those needed for physical products, you can get authorizations for the release/sharing of technical information or others that enable individuals or companies to engage in brokering activities. In addition, there are specialized licenses to authorize foreign manufacturing and distribution. The variety and processes may seem complicated at first but you can ask for official assistance or rely on third-party experts to guide you.

Importance of Destinations, Denials, and End-Users in Export Licensing

These are all important factors influencing the need for a license and the likelihood of getting one. The destination country is a particularly important part of the EAR licensing requirement since the "reasons for control" that are listed under each ECCN are then cross-referenced to the Commerce Country Chart which indicates the various types of controls that require a license for a given destination. Also important is the apparent validity of both the stated End User and the proposed End Use since officials are on the lookout for diversion schemes and bad actors. Finally, we see everywhere that sanctions, embargoes, and denied parties are increasingly prevalent in recent years, focusing on concerns related to specific countries, companies, and individuals in addition to the sensitivities of the actual products and services.

Secure Your Global Operations with Expert Export Licensing Guidance

Navigating the complexities of export licensing can be challenging for both military and commercial items. From understanding licensing requirements and using online portals like DECCS and SNAP-R, to considering critical factors such as destination, denials, and end-users, the process requires experience and attention to detail. Fortunately, CTP experts are here to ensure that your licensing procedures align perfectly with regulatory demands, thereby reducing risk and boosting efficiency in your exporting efforts..

Ready to streamline your export licensing processes? Contact CTP today for expert assistance and ensure your business remains compliant and competitive in the international marketplace.

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