The Bewildering World of Export Control and Compliance

It’s Complicated.

Who would have thought that unprocessed western red cedar logs and timber are subject to export control? Or such diverse products as vehicle axles, seal assemblies, polygraph machines, handcuffs and diagnostic and food testing kits? In fact, any U.S. item - even technical data - regardless of origin, may be subject to export control. Certain items located outside the U.S. and certain activities of U.S. persons may also be controlled. Not only could export control apply in all contexts and transactions, it must be considered with respect to immigration and outsourcing matters, foreign travel and even foreign patent prosecution. Compliance requirements trip up even the most sophisticated multinational companies. Why? Because is just so complicated.

Who Enforces What?

Two separate bodies of export control laws govern. The International Traffic in Arms Regulations (ITAR) regulate export of defense-related items and services while the Export Administration Regulations (EAR) address commercial products and services. These regulations establish two different primary control lists. ITAR contains the U.S. Munitions List (USML) of restricted articles and services. The EAR has its Commerce Control List (CCL) for regulated commercial items, including those classified as “duel-use” – items having both commercial and military or proliferation applications. The regulations are enforced by two different departments – the State Department and Commerce Department. The lists have fundamentally different structures, different levels of specificity, even different definitions. For example, there isn’t even consensus between the departments as to what constitutes a “defense article.” Inefficiencies aside, the confusion fueled by the differing structures and lack of consensus hampers the stated objectives of the laws – to control exports that truly affect national security.

Next time – A Primer on the U.S. Export Control Laws.

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