Exporting is a privilege, not a right. Before you begin exporting you have to know where your product or service stands in terms of export controls.
The U.S. controls exports of tangible items, technology, software and some services. There are several government agencies that control exports. Three government agencies that control the majority of exports from the U.S. are the U.S. Department of Treasury, the U.S. Department of State, and the U.S. Department of Commerce.
Some exports are prohibited outright, some require a license or approval from a U.S. government agency prior to export, and some can be exported without a license if an exemption or exception exists in the law. A significant majority of tangible items, technology, software and services do not require a license for export – but here is the thing – if you don’t know how your export is classified how do you know whether or not it is controlled for export and thus requires a license or other approval?
There is strict liability for violating U.S. export control laws and regulations. That means that “my shipper told me so” is not a “get out of jail free” card. There can be significant fines and penalties for violating export control laws, including jail time for knowing violations of the law. Big companies and small family owned businesses, including Michigan companies, have all been hit with fines and penalties for violating these laws and regulations. While not exhaustive, here is an alphabetical index of items controlled for export by the U.S. Department of Commerce (one of the 3 government agencies mentioned above by way of example).
Some items on the list include certain valves, aircraft parts and components, liners, software, chemicals, CNC machines, computers, lasers, hydraulic items, production equipment, pumps, sensors – and a lot of other things you would and would not expect. Generally speaking, technology and software related to the time controlled will also be controlled. To determine if your item, technology, software or service is controlled for export you need to determine which government agency might regulate the export, and then determine the classification of the item/technology, etc. for export purposes. That will help you determine if you need an export license or other government approval to export to the country in question.
Contributed by Jean Schtokal, Foster Swift.
View the on-demand webinar “Going Global: The Legalities of Exporting” with Jean Schtokal.