Your Item is EAR99 Or There is No "X" in the Box So You Don't Need an Export License, Right?

If I had a dime for every time an exporter told744 to China. Unless otherwise indicated, the
me, "we don't need 'export compliance' - ourlicense requirements of General Prohibition 5 apply
products are EAR99" I'd be retired by now. And ifto all items subject to the EAR, i.e. both items on
I had a dime for every time I heard "we don'tthe CCL and within EAR99. As mentioned above,
need an export license because there is no "X" inthere are software programs to aid exporters in
the box for that country, I'd be retired and havescreening the prohibited end-users above. Feel
a lot more money in my 401K.free to call or email me for a list of such
I am referring to General Prohibitions 4-10 of theproviders.
Export Administration Regulations (EAR). I think,General Prohibition 6 prohibits exports or
or at least hope, that exporters of items in onre-exports to embargoed destinations without a
the Commerce Control List (Supplement No. 1 tolicense or license exception authorized under part
Part 774) that require an export license are, for746. If your destination for any item is Cuba, Iran,
the most part, aware of General Prohibitions 1-3Iraq, North Korea, or Rwanda you must consider
and perform their license screening accordingly.the requirements of parts 742 and 746 of the
General Prohibitions 1-3 prohibit the export ofEAR. Unless otherwise indicated, General Prohibition
certain items on the CCL to named countries on6 applies to all items subject to the EAR which
the Commerce Country Chart in Supplement No.includes both items on the CCL and EAR99.
1 to Part 738.General Prohibition 7 prohibits U.S. persons from
What many exporters fail to realize is thatengaging in performance, without a license, of
General Prohibitions 1-3 are merely the first stepscertain financing, contracting, service, support,
in license determination and compliance with U.S.transportation, freight forwarding, or employment
export laws and regulations. General Prohibitionsthat they know will assist in certain proliferation
4-10 are prohibitions on certain activities that areactivities described in part 744. Such activity
not allowed without authorization (i.e. licenses)extends to services and dealing in wholly foreign
from BIS, and these prohibitions apply to all itemsorigin items in support of the specified proliferation
subject to the EAR unless otherwise specifiedactivity and is not limited to items listed on the
(part 736.2(b)(4) through (10) of the EAR).CCL or included in EAR99. Moreover, there are no
General Prohibition 4 states that you may notLicense Exceptions to General Prohibition 7 unless
take any action that is prohibited by a denial orderspecifically authorized in part 740 of the EAR.
issued under part 766 of the EAR. Denial ordersGeneral Prohibition 8 prohibits the export or
prohibit many actions in addition to direct exportsre-export of an item through or transit through
by the person denied export privileges. Thisthe following countries without a license or license
prohibition applies to all items subject to the EAR,exception if a license or exception would have
that is to say, both items on the CCL and withinbeen required for a direct export to that country:
EAR99. You are responsible for ensuring that yourAlbania, Armenia, Azerbaijan, Belarus, Cambodia,
transactions in which a person who is deniedCuba, Georgia, Kazakhstan, Kyrgyzstan, Laos,
export privileges is involved do not violate theMongolia, North Korea, Russia, Tajikistan,
terms of the order. Orders denying exportTurkmenistan, Ukraine, Uzbekistan, and Vietnam.
privileges are published in the Federal RegisterGeneral Prohibition 8 applies to all items subject to
when they are issued and are the legallythe EAR which includes both items on the CCL
controlling documents in accordance with theirand within EAR99.
terms. The BIS also maintains compilations ofGeneral Prohibition 9 prohibits the violation of the
persons denied export privileges on its Web site.terms or conditions of a license or license
There are many reasonably priced softwareexception issued under or made a part of the
programs to aid exporters in their restricted partyEAR, and the violation of any order issued under
screening.or made a part of the EAR. There are no license
General Prohibition 5 prohibits, without a license,exceptions to this General Prohibition. Supplements
the export or reexport any item subject to theNos. 1 and 2 to part 736 provide for certain
EAR to an end-user or end-use that is prohibitedGeneral Orders and Administrative Orders.
by part 744 of the EAR. Part 744 restricts theGeneral Prohibition 10 prohibits anyone from
export of items and certain activities by U.S.proceeding with a transaction with knowledge that
persons subject to the EAR to defined nuclear,a violation of the EAR has occurred or is about to
missile, and chemical and biological proliferationoccur. It also prohibits related shipping, financing,
activities and nuclear maritime end-uses andand other services. This prohibition applies to all
certain items for aircraft and vessels. In addition,items subject to the EAR, again both items on
it prohibits, without a license, exports andthe CCL and within EAR99. Obviously there are
re-exports to certain parties who have beenno License Exceptions to this General Prohibition.
designated as proliferators of weapons of massI think the General Prohibitions are best summed
destruction; certain Russian entities; entities listedup by the title of a recent BIS seminar in Orlando
for activities contrary to the national security or- "You might need an export license to ship a
foreign policy interests (Entity List); Speciallypencil to Canada". If you understand these
Designated Global Terrorists, Specially Designatedprohibitions you can clearly see how this, in fact,
Terrorists, or Foreign Terrorist Organizations; andcould be true. Now, are you still sure you don't
persons named in General Orders. Part 744 alsoneed an export license for your EAR99 items or
restricts the export of certain microprocessorsno "X" in the box?
for military end-uses and items on Supp. 2 to part