License Exception LVS: Simplifying Limited Value Shipments for Exporters

Introduction

Exporting controlled goods or technology from the United States typically requires a license issued by the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) under the Export Administration Regulations (EAR). However, BIS provides certain B'license exceptions' that allow exporters to ship specific controlled items without obtaining an individual export license—provided strict conditions are met.

One of the most frequently used exceptions is License Exception LVS, which stands for Limited Value Shipments. LVS allows exporters to send small-value shipments of certain controlled items to most destinations without a full license, simplifying low-value, low-risk transactions. Despite its convenience, LVS is highly regulated and requires exporters to fully understand its eligibility limits, value thresholds, and recordkeeping requirements.

Key Details About License Exception LVS

1. What Is License Exception LVS?

License Exception LVS (Limited Value Shipments) is outlined in 15 C.F.R. § 740.3 of the EAR. It authorizes exports and reexports of certain controlled items—listed on the Commerce Control List (CCL)—when the total value of the shipment does not exceed a specific dollar limit established for that Export Control Classification Number (ECCN).
The purpose of LVS is to ease the administrative burden on both exporters and the government for small shipments that pose minimal national security or foreign policy risk. However, the exception does not apply universally; each ECCN on the CCL specifies whether LVS is available and, if so, what the B'maximum dollar value (the “LVS limit”)' is.

2. Eligibility and Value Thresholds

To use License Exception LVS, the exporter must first confirm that:

• The ECCN for the item explicitly lists “LVS: Yes” or specifies a dollar value limit in the “List-Based License Exceptions” section of the CCL entry.
• The value of all items classified under that ECCN in a single shipment does not exceed the specified limit.
• The items are B'destined for one end user and one ultimate consignee' per shipment.

For example, an ECCN entry may state “LVS: $1,500,” meaning an exporter can ship up to $1,500 worth of those items per end user, per destination, under this exception.

If the total value exceeds that amount, or if the ECCN does not list LVS eligibility, a license application must be submitted to BIS before export.

3. Restrictions and Limitations

While LVS can simplify export operations, it comes with strict limitations. The exception cannot be used for:

• Shipments to embargoed or sanctioned countries (e.g., Cuba, Iran, North Korea, or Syria).
• Exports to B'prohibited end users or end uses', such as military or weapons proliferation activities.
• Circumvention attempts, such as splitting large orders into multiple smaller shipments to stay below the dollar limit.
• Exports of items that require licenses for reasons other than those controlled by the LVS-eligible ECCN (e.g., anti-terrorism or nuclear nonproliferation).

BIS closely monitors shipment patterns to prevent abuse, and violations of LVS conditions can result in enforcement actions, fines, or loss of export privileges.

4. Recordkeeping and Documentation Requirements

Exporters using LVS must maintain comprehensive records for each shipment to demonstrate compliance. These records should include:

• The ECCN and LVS eligibility reference.
• The total value of the shipment.
• The name and address of the end user and consignee.
• Documentation confirming that the value limit was not exceeded.

Records must be retained for at least five years from the date of export, as required under EAR Part 762. BIS or U.S. Customs officials may request this documentation during audits or enforcement reviews.

5. Practical Benefits and Best Practices

When applied correctly, License Exception LVS offers several advantages:

• Faster processing: Avoids the time and cost of obtaining an individual license.
• Administrative efficiency: Useful for routine small shipments or sample exports.
• Reduced compliance burden: Simplifies low-risk transactions without compromising security.

Best practices include integrating automated export control checks into logistics systems, maintaining detailed valuation records, and ensuring staff are trained to identify when LVS applies versus when a full license is required.

Conclusion

License Exception LVS is a valuable tool for exporters managing small, low-value shipments of controlled items. By allowing certain exports without an individual license, it promotes trade efficiency while maintaining control over sensitive technologies.

However, using LVS requires precision and diligence. Exporters must verify ECCN eligibility, stay within strict value limits, and maintain thorough documentation to demonstrate compliance. When properly managed, LVS can reduce administrative burdens while ensuring that all export activities remain aligned with U.S. national security and foreign policy objectives.