US Export Control Laws
Jan 20, 2010 QuickCounsel Download PDF
The United States, like most countries, has laws which control the export of certain products and technologies for strategic reasons. Without an appreciation of US export controls, a US business risks inadvertent violations with significant consequences as problems can occur in unlikely circumstances. Violators are subject to criminal and administrative penalties.
Export Licenses are required in certain situations involving national security, foreign policy and terrorist concerns. In addition, certain places as well as denied persons and organizations are subject to additional restrictions.
Four U.S. Government Agencies have primary export licensing responsibilities: the Departments of Commerce, State, Treasury and Energy.
The Blurred Lines of Exportation
How an item is transported outside of the United States does not matter in determining export license requirements. In addition to the obvious shipment of a product from the US to a foreign country by common carrier, an item can be sent by regular mail or hand-carried on an airplane. A set of schematics can be sent via facsimile to a foreign destination, software can be uploaded to or downloaded from an Internet site, or technology can be transmitted via e-mail or during a telephone conversation. Export controls on technology generally apply regardless of the location of the “U.S.-origin technology.” An item is also considered an export even if it is leaving the United States temporarily, if it is leaving the United States but is not for sale (e.g. a gift, or research project), or if it is going to a wholly owned US subsidiary in a foreign country. Even a foreign-origin item exported from the United States, transmitted or transshipped through the United States, or being returned from the United States to its foreign country of origin is considered an export. Finally, release of technology or source code subject to the EAR to a foreign national in the United States or elsewhere, is "deemed" to be an export to the home country of the foreign national.
The US Government takes the position that industry compliance is the first and best line of defense in protecting national security. Compliance with US Export Controls allows industry to avoid enforcement actions by preventing violations. Effective compliance programs allow industry to detect violations first, and then make voluntary disclosures that significantly mitigate penalties. For example, it is important to know that recent administrative cases have made clear that businesses can be held liable for violations of the EAR committed by companies that they acquire.
Suffice it to say, this is an extremely challenging area with the potential of significant liabilities for missteps. In addition to seeking experts who can advise you in this arena, it is also helpful to use the government training programs that are available as well as the numerous responses to FAQs that have been supplied.
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