By: Scott Gearity
When the Export Control Reform Initiative truly began to come into fruition last year, License Exception STA received a lot of attention. This, despite the fact that it is not a new exception, having been introduced more than two years earlier in 2011 to create what Under Secretary of Commerce Eric Hirschhorn called a “license free zone.” And in that two year period exporters had been getting accustomed to using License Exception STA to ship microwave solid state amplifiers (ECCN 3A001.b.4), thermal imaging cameras (ECCN 6A003.b) and other similarly sensitive products in situations which previously would have required an export license.
Now, actually using License Exception STA to export 600 series items is a whole other story, replete with frustrations involving additional limitations and conditions on top of this exception’s preexisting burdensome requirements. Less well-understood is that there are alternatives to License Exception STA short of an export license, even for exports of 600 series items. To begin with, some 600 series items are eligible for export No License Required, in particular shipments to Canada and those items in .y paragraphs (e.g. 9A610.y) everywhere except to China, Cuba, Iran, North Korea, Sudan and Syria. Some ground vehicles and ground vehicle parts and components (i.e. those classified in ECCN 0A606.b) are also NLR-eligible to a number of destinations (many European countries, Australia and Japan among them.)
Still, exporters will not be able to ship most 600 series hardware, software and technology NLR anywhere other than to Canada. But this does not mean that the only remaining options are License Exception STA or, failing that, a license. There are other EAR license exceptions which can authorize an export of a 600 series item. These are:
- License Exception LVS (§740.3): This can be a useful authorization for low value shipments. Many existing 600 series hardware ECCNs are eligible for this exception at the $1,500 level. So if the destination for the export is in Country Group B (which is much larger than the list of STA-eligible destinations for 600 series items in Country Group A:5) and the net value of the order does not exceed $1,500, License Exception LVS may be a good option. (For the ITAR fans out there – the closest equivalent exemption to LVS in DDTC’s regulations is §123.16(b)(2).)
- License Exception TMP (§740.9): If the export is intended to be temporary, consider whether this exception may be an option. Its provisions are generally available for 600 series items. (TMP stands in for several ITAR exemptions including §123.16(b)(5) and (9), §123.17(c) and (f)-(i) and §125.4(b)(9).)
- License Exception RPL (§740.10): Have a customer who wants to send 600 series hardware back to the U.S. for repair or replacement? The return itself is not subject to the EAR (because the EAR does not regulate imports), but to send the repaired item or a one-for-one replacement for it back abroad, an appropriate authorization is required. That authorization could be License Exception RPL. Like License Exception LVS, the list of RPL-eligible destinations is much longer than that for License Exception STA. (The ITAR exemption at §123.4(a)(1) permits shipments in situations similar to those allowed by License Exception RPL .)
- License Exception GOV (§740.11): Are you the U.S. Government? Would you like to export to the U.S. Government? Have you been told (in writing) by a U.S. government agency to make an export? Is your export consigned to and for the official use of an agency of a handful of “cooperating” governments? If the answer to any of these questions is “yes,” then License Exception GOV may be an option. (There are a slew of roughly equivalent ITAR exemptions to GOV including §125.(4)(b)(1) and (3), §125.(4)(c), §125.(5) and §126.4.)
- License Exception TSU (§740.13): This exception is only for software and technology, but within that scope is one of the broadest in the EAR. It permits the export of operation technology and software related to lawfully exported hardware. And the “sales technology” provision may allow exports of technology classified in XE6XX ECCNs in response to RFPs or RFQs which previously might have had the exporter stopping to seek a DSP-5 marketing license or TAA (and maybe losing the contract thanks to the delay). License Exception TSU also includes an authorization of particular utility to universities. (Compare License Exception TSU to the ITAR exemptions at §125.4(b)(4), (5) and (10).)
Clearly, there are more options for exporting 600 series items than just STA and licenses. When considering using one of these license exceptions, always remember to carefully review not just the text of the exception itself, but also EAR §740.2 which contains general restrictions on the use of exemption.