Export Administration Regulations
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An Export Control Classification Number (ECCN) is an alphanumeric code assigned to articles, technology and software (collectively, "items") by the United States Department of Commerce, Bureau of Industry and Security. The classification list is a slightly modified version of the list maintained by the Wassenaar Arrangement, an international regime in which member countries agree to implement export controls for "dual use" items. Dual use items are items that have potential civilian uses, as well as WMD or conventional weapons related end uses. ECCN classification is determined by referring to a table that is issued by the Bureau of Industry and Security. Since the lists are based on an international standard, the European Union regulates items using the numbering system that is very similar, and is defined in Council Regulation (EC) 388/2012. However, there are minor differences in the numbering, and the term "ECCN" is specific to the US system.
The ECCN table contains hundreds of ECCN codes that are organized according to the technical parameters and/or end use of the hardware, software or technology that is being exported.
In the U.S., the Bureau of Industry and Security, a component of the United States Department of Commerce allows private industry to self-classify exported items with the exception of certain items containing encryption functionality. In the case of encryption hardware/software, the U.S. company would need to request a product classification ruling from the Bureau of Industry and Security. Although many different U.S. and foreign entities may be involved in manufacturing and distributing an item, ultimately it is the exporter or U.S. Principal Party in Interest (USPPI) that is held responsible for the correct classification of any export and is required to ensure that all applicable export control requirements are met prior to making the export. In the event an ECCN cannot be determined by the USPPI, technical information about the article can be submitted to the Bureau of Industry and Security and the ECCN will be determined and a ruling made.
Each ECCN provides for varying degrees of export control based on the country of end use. The licensing requirement for an ECCN entry may be determined by referring to the Commerce Country Chart in Supplement No. 1 to Part 738 of the Export Administration Regulations. Additionally, some ECCNs have license exceptions associated with the export restrictions—based on Low Value Shipment (LVS) or other mitigating factors. There are also restrictions that apply to certain denied parties, regardless of what would otherwise be an allowed export transaction.
An ECCN identifies the type of control(s) for the items categorized under that ECCN. For example, an ECCN may be controlled for anti-terrorism. After obtaining the ECCN, the exporter must review the Commerce Country Chart to determine whether an export license is required to export items to that country. In other words, if the ECCN is controlled for AT reasons to the country one is exporting to, an export license is required unless license exceptions apply.
Although determining an item’s ECCN can be time consuming and difficult, it is a necessary step in the process of complying with current export control laws. A would-be exporter can submit a request for an official classification via the U.S. Commerce Department's Web site.
Munitions list articles and technologies fall under the jurisdiction of the Department of State and are controlled under International Traffic in Arms Regulations (ITAR). Jurisdiction for all articles and technologies must be properly determined prior to classifications being made to ensure that munitions list articles are not incorrectly classified as dual-use articles or technologies. Jurisdiction rulings can be obtained from the Directorate of Defense Trade Controls (DDTC) of the Department of State.
U.S. export laws are valid also for re-export of U.S. products from any country, according to stipulations in the documentation from the Bureau of Industry and Security. Normally the assigned U.S. ECCN code is valid also for re-export of U.S. origin products from most countries in the world. However, If the product is exported from the US under certain license exceptions, i.e. NLR or LVS, the Wassenaar Arrangement do not have corresponding license exceptions. A product which can be exported from the US without an export license might well need one when re-exporting from an EU/Wassenaar country.
Also, a product exported from the U.S. under mass-market exemption being embedded into other equipment/software loses that status and it is required that product to be reclassified and exported under a separate export license.
Challenges in classification
Determining if certain products and technologies are regulated by the EAR and under which heading of the Commerce Control List (CCL) they may fall under often requires significant technical knowledge that many individuals and companies lack. Encryption regulations in Category 5 part 2 of the CCL can be particularly cumbersome for exporters as many criteria is circuitous and overly complex, often leading to analysis paralysis. Furthermore, overlapping and conflicting regulations exist between the Commerce Control List and the U.S. Munitions List.
Reform is currently underway that seeks to simplify export regulations by merging the Commerce Control List and U.S. Munitions List into a Single Control List. Additionally, regulations are being rewritten in a 'positive' manner with objective criteria, such as qualities to be measured (e.g., accuracy, speed, and wavelength), units of measure (e.g., hertz, horsepower, and microns), or other precise descriptions, rather than broad, open-ended, subjective, catch-all, or design intent-based criteria.
Items on the US Munitions List are controlled by ITAR. Export Administration Regulations include the Commerce Control List, which spells out what types of goods fall under which type of export control. The list has eleven categories:
- 0. Nuclear & Miscellaneous
- 1. Materials, Chemicals, Microorganisms and Toxins
- 2. Materials Processing
- 3. Electronics
- 4. Computers
- 5 Part 1. Telecommunications
- 5 Part 2. Information Security
- 6. Sensors and Lasers
- 7. Navigation and Avionics
- 8. Marine
- 9. Aerospace and Propulsion
Each category has five subgroups:
- A. Systems, Equipment and Components
- B. Test, Inspection and Production Equipment
- C. Material
- D. Software
- E. Technology
The category and subgroup are combined to form the first two digits of the ECCN.
Category 1 includes crude oil, which is further regulated at 15 CFR 754.2. Other commodities regulated under "short supply" authority (not for national security nor foreign policy reasons) include Western red cedar harvested from public lands in the Lower 48, and horses intended for slaughter.
- "ECCN Site". Retrieved 22 January 2016.
- "Commerce Country Chart". Retrieved 12 June 2017.
- "Export Control List Review and Creating a Single Control List". Export.gov. Retrieved 12 February 2015.
- Supplement No. 1 to 15 CFR 774
- Export Control Classification Number - US Department of Commerce
- Lists of Parties of Concern - US Department of Commerce
- Official Journal of the European Union - Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items