Disclaimer: I am not a lawyer, nor has a lawyer reviewed this material. The following are suggestions and general information about export controls. This information is not legal advice and should not be treated as such. This article discusses issues pertaining to United States Export Controls and may not be applicable anywhere else. Treat this article as a simplified introduction only!
Do the acronyms ITAR, USML, ECCN, EAR, CCL mean anything to you? If you are involved in selling electronics they should be! Over the last several years, a large number of people (including myself) have gone into the business of designing and selling electronics kits and products.
Starting up a small business requires a lot of effort in understanding issues not directly related to designing and selling products. These include accounting, sales tax, income tax, business licensing, and obtaining a re-seller’s permit. One more to add to that list should be export controls.
Unfortunately, export controls are a vast, complex topic to understand in detail. Many large companies have whole departments of people and lawyers dedicated to this issue. For most people running a home/hobby business, it is impractical to have an export control department, and legal advice in these matters is prohibitively expensive. All is not lost though, as a basic awareness of export control issues is better than none, and may be sufficient.
What are export controls and do they affect me?
Export controls are in place primarily for issues of national security, but also for issues of non-proliferation of weapons, human rights, regional stability, terrorism, trade sanctions, etc. These controls take the form of regulations on what can and cannot be exported, and to whom. Some things can be exported easily, others require special licenses, or cannot be exported at all!
Whether export controls apply to you mostly depends on what it is you are selling. If you are selling ANYTHING that could have potential application to the above list, then you need to be aware of and comply with appropriate regulations. As you might expect, this covers a tremendous amount of goods and services.
By the way, an “export” may not be what you think it is…. Clearly the shipment of hardware across a border is an export, but so is giving a non-“U.S. person” protected technical information even if they are inside the U.S.! (A “U.S. person” by the way is a U.S. citizen or permanent resident who does not work for or represent a foreign government or business.) If you design a product that is export restricted, it’s design and software may be too.
Let’s go back to those acronyms for a moment so you can get an idea of some of the players in this export control business…
USML – United States Munitions List: This is a list that describes items covered under ITAR.. Essentially, this is a list of items designed for military use, and items with no non-military use. Determining whether something falls under this list can be a little tricky, and in fact, the government is in the process of being more explicit about it. An example of something found on the ITAR list is certain types of image intensifiers or “night-vision goggles”.
ITAR – International Traffic in Arms Regulations: ITAR is a set of regulations for products that are listed in the USML. ITAR is handled by the State Department and governs the export of goods of military use.
CCL – Commerce Control List: This is a very long list of goods, services, technology (could be software, designs, etc). Generally things that don’t fall onto the USML will fall on to the CCL list if they have dual-use (can be used for civilian and military purposes).
ECCN – Export Control Classification Number: This number is assigned to an item that falls under the jurisdiction of the CCL. It is basically a section number of the CCL describing the good/service/technology in question.
How do I know if my product/technology is export controlled, and to what extent?
The way to determine if your product is export controlled is to carefully read through the CCL and USML and see if you can find a matching description to your product.
Generally speaking for most in the hobby electronics business, products will generally fall under the CCL or under EAR99 (indicating that no license is required to export to non-embargoed countries, denied persons, prohibited end users/uses etc. etc.)
However as the line between hobby use and military use is becoming less clear (think autopilots on UAVs, thermal imagers etc.) it would be wise to also look at the USML and make sure your product doesn’t fall under that list.
If you still have doubt (and these documents are still not 100% clear on things) there are means for having the government decide for you. This is the surest way to know your product classification should you have doubt. ITAR calls it a Commodity Jurisdiction and for the CCL, it is a Commodity Classification
My product now has a classification number, now what?
If you have gotten this far, you should probably start reading more details on the various web sites, because it starts to get a bit more detailed. Suffice it to say, there are lists of countries to which some things can be exported without license and others which require a license, or are banned.
There are a number of responsibilities associated with exporting, generally they are more stringent with ITAR items, including registration with the State Department, collection of documentation of the end use, end user, etc. There are also lists of people inside and outside the U.S. who have been banned from receiving exports all together. These lists have to be checked for each export.
Probably the best place to start is the Commerce Department’s introduction to Export Control.
If you think you have a USML item, check out Getting Started at the US State Department.
My suggestion is that if you have a new product in mind, before doing a ton of development work, read through these lists and see if what you are thinking about is worth the effort. If you end up with a USML item, you’ve got a lot of work and cost ahead of you. Likewise, if you have something controlled by the CCL that can only be exported to say Canada then you’ve got some serious license application work ahead of you if you choose to export to other places.
While this subject is tricky, sometimes vague, and requires lots of reading, it is worth while, and required for the legal export of just about anything. The good news is that the government recognizes the difficulty and has ways of helping figure out where your product stands. Finally, there is reform happening now which will roll out over the next several months that should help make this process easier.
One area I have seen little mention of is Open Source and how it pertains to export control. Does anyone know anything about this?