Export licensing is a basic and important first step in exporting. It may initially appear complex and confusing, but in most cases, the process is very simple and straightforward. A product can fall into only one of two categories:
No license required (NLR)
Validated export license required
The vast majority of items exported from the United States do not require a validated export license.
Previously, the U.S. government controlled the export and re-export of goods by granting two types of licenses (which you may still occasionally run into):
General license: A broad grant of authority by the government to exporters for certain categories of products that don’t require a formal application
Individually validated license (IVL): A specific grant of authority from the government for a particular exporter to export a specific product to a specific country
The Bureau of Industry and Security (BIS) in the U.S. Department of Commerce is responsible for implementing and enforcing the Export Administration Regulations (EAR), which regulate the export and re-export of the majority of commercial items. If you have questions about these regulations, you can contact your local U.S. Department of Commerce official for assistance.
The starting point for these requirements is the Office of Export Services, Outreach and Educational Services Division of the BIS. You can reach export counselors in Washington, DC, by phone at 202-482-4811 or in California at 949-660-0144.
Determining whether you need a license
As an exporter, you need to determine which federal department or agency has jurisdiction over the item you’re planning to export. It is up to the exporter to research the end use of the product and to find out whether the product requires a license — in other words, the exporter has to perform due diligence regarding the transaction.
Violations of licensing regulations carry both civil and criminal penalties, so you can’t assume that your product doesn’t require an export license — you need to do your homework. Some exporters have been sentenced to fines totaling more than $125,000, several years’ probation with a period of home detention, and dozens of hours of community service after being found guilty of exporting without a license. The exporter is responsible for determining that the item to be exported is properly designated as an NLR (no license required).
The percentage of items being exported requiring an export license issued by the BIS is very small. The U.S. issues export licenses for reasons of national security, foreign policy, or short supply. In determining whether an item requires an export license, consider the questions in the following sections.
What are you exporting?
The key in determining whether an export license is required from the U.S. Department of Commerce for a given product is whether the item has a specific Export Control Classification Number (ECCN), which is simply a five-digit classification code.
You have three options in determining whether a given item has an ECCN:
Figure it out yourself. You can find these codes listed in the Commerce Control List (CCL). (This list is in the supplement to Part 774 of Title 15: Commerce and Foreign Trade.)
Ask the manufacturer. The manufacturer may know whether the product has an ECCN if the company has exported the item in the past.
Get an official classification from the BIS. You can make this request through the Simplified Network Application Process Redesign (SNAP-R), the electronic licensing system. When filing electronically, you must obtain a personal identification number (PIN) before submitting this request. You can get a PIN by visiting the Outreach and Educational Services Division of the BIS or calling 202-482-4811.
What will the item you’re exporting be used for?
The items that the BIS regulates are classified as dual-use items because they have both commercial and military applications. For example, if you want to export polygraphs, arms, ammunition, gas masks, telecommunication equipment, navigational equipment, and so on, you have to secure a license before exporting these goods.
The EAR (Export Administration Regulations) also makes an allowance for commodities in short supply, making them subject to export licensing. These restrictions are supposed to protect the economy in the United States from an excessive drain of scarce materials and to reduce any inflationary impact due to satisfying foreign demand.
As of this writing, products on this list include petroleum and petroleum products, unprocessed western red cedar, and horses exported by sea for slaughter. (You can find information on licensing requirements for your product at export.gov; click Licenses & Regulations for updated information on products and country restrictions.)
Where are you exporting to?
Restrictions vary from country to country and from item to item. The principal restricted destinations are embargoed countries and those designated as supporting terrorist activities. As of this writing, the list includes Cuba, Iran, North Korea, Sudan, and Syria.
To make sure that exports from the U.S. go only to legally authorized destinations, the U.S. government requires a destination control statement on all shipping documents. The destination control statement is important because it’s a notification to the carrier and all foreign parties that these goods can’t be diverted to another country, contrary to U.S. law.
Exporters must place the destination control statement on commercial invoices and bills of lading for most export sales. The only exception to the use of this statement is shipments to Canada that are intended for consumption in Canada.
Violations of the destination restrictions may be subject to both criminal and administrative penalties. Criminal penalties can reach up to ten years’ imprisonment and $1 million per violation. Administrative penalties can reach $11,000 per violation, and certain cases involving national security issues can reach $120,000 per violation.
Who will receive your item?
Certain individuals and organizations are also prohibited from receiving U.S. exports, and others may receive goods only if the exporter has received a license. This restriction may also apply to goods that don’t normally require a license. You can access the list from the BIS website. Included in this list are people engaging in the development of weapons of mass destruction and those involved in terrorism or drug trafficking.
For a good starting point on information on export licensing requirements and regulations, attend one of the export control seminars conducted by the Department of Commerce. You can find a list of upcoming seminars at the Bureau of Industry and Security (BIS) website. For counseling assistance, you may also call one of the export counselors at 202-482-4811 (Washington, DC), 949-660-0144 (Western Regional Office), or 408-998-8806 (Northern California).
Applying for a license
If you determine that an export license is required for your product, the fastest and easiest way to submit your application for a license is to use the online system SNAP-R.
You can also take the hard-copy approach to submitting an application by using Form BIS-748P, the Multipurpose Application Form. You can request a copy of this form by phone at 202-482-4811, by fax at 202-219-9179, or online.
If you submit the form by mail (express mail or a commercial courier service like FedEx or DHL is recommended), be sure to avoid some common errors that may delay the processing of your application, such as
Forgetting to sign the application
Hand-writing the application instead of typing it
Inadequately responding to Section 21 of the application, which asks the exporter to describe in detail the specific end use of the product; if you aren’t specific, the application process will likely be delayed, or the application may be rejected
Inadequately responding to Section 22(j) of the application, which calls for a detailed description of the item being exported (to avoid this problem, attach any available additional material to fully explain the product)
You can follow up on your export license application via an automated voice-response system by contacting the BIS System for Tracking Export License Applications (STELA) at 202-482-2752.