The Export Control Classification Number (ECCN)

ECommerce Export Readiness
U.S. Commercial Service Iowa
U.S. Export Assistance Center
Allen Patch, Director
Patricia Cook, International Trade Specialist
Presented in partnership with The Start Up Practice Group at
The U.S. Commercial Service
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This presentation and associated materials have been designed to provide
only general information about US export control agencies.
Seek out detailed information and/or official rulings from the agencies
These are serious matters with civil and criminal penalties for false or
intentionally deceptive practices.
Get educated, train staff, and consider professional legal counsel.
Myths and Misunderstandings
“They pick it up at our door. I am not responsible for any of the export stuff.”
– Reality: As a USPPI (as a US company in more general terms) you are
still responsible for all export reporting and compliance.
Myths and Misunderstandings
My product does not require a license, so I don’t have to worry about any of
those export regulations.
– Reality: Licensing requirements are only one part of the picture. Trade
compliance requires screening, classification, reporting, due diligence,
and record keeping.
• Classification
• Jurisdiction
• Qualification
Order Entry
• Country
• Buyer & 3rd Party
• Export Control
Decision Tree
• Re-screen
• Electronic
• Cargo Security
• Record
Export Controls
US Government Enforcement
– Investigations
– Civil and Criminal Penalties – fines and prison
– Nothing less than $250,000 and possibly many times more
– Loss of Export Privileges
Supply Chain Efficiency
– Avoid hold ups at U.S. and foreign customs
– Demands from customers in their supply chain
Export Controls
Strategic Planning
- Know the regulations in each country
- Obtain certifications limiting entry to business
Business Management
– Avoid hidden liabilities
– Compliance programs improve record keeping & documentation
– Staffing for all roles
– Viral customer complaints will damage brand
Cloud Computing
U.S. Government policies & regulations
Compliance issues
Encryption Controls
U.S. Government Policies
ECommerce Export Success Stories
View examples of ECommerce Success
 of ECommerce
ECommerce Export Violation Stories
View Don’t Let This Happen To You Video
• In the middle of the page find the link to the video, under Publications:
Don’t Let This Happen to You
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Classification – Harmonized System Numbers
All Items individually classified
Harmonized System Goods Nomenclature
• World Customs Organization, Brussels
• 171 Member Countries
• 6 digits
Used by all countries to assess tariffs
U.S. government requires classification for export in most cases
Introducing a number, one part at a time
85 09 40
Schedule B vs. HTS
(first 6
Harmonized Tariff
U.S. International Trade
About 12,000
Schedule B
U.S. Department of
Census Bureau
Foreign Trade Division
About 9,000
Schedule B
Schedule B
850940 0020
Harmonized Tariff Schedule of the United States Annotated
850940 0932
Who Controls your Product ?
U.S. State
U.S. Department of Commerce
Bureau of Industry and Security (BIS)
Export Administration Regulations (EAR)
The Export Control Classification Number
(ECCN) (U.S. Commerce Department)
Optical sighting devices for
0 Category
0 A 987
Nuclear Materials, Facilities & Equipment (and Misc. Items)
A Product Group
Equipment Assemblies, Components
987 Type of Control
FC, CC, UN (738.2)
Product Groups
Electronic Components
(see list)
inspection and
Deemed Exports
Happens when a foreign national is given access to the technology or
source code (except encryption source code) of your product or
technology that is controlled by the CCL (not EAR99)
 You may need a license to show or share it with them
Country Screening - OFAC
You cannot sell goods or technology to these countries.
Office of Foreign Assets Control (OFAC), U.S. Department of Treasury
The 6 Lists to Check
Denied Persons List (BIS)
– A list of individuals and entities that have been denied export privileges. Any dealings with
a party on this list that would violate the terms of its denial order is prohibited.
Unverified List (BIS)
– A list of parties where BIS has been unable to verify the end-user in prior transactions. The
presence of a party on this list in a transaction is a “Red Flag” that should be resolved
before proceeding with the transaction.
Entity List (BIS)
– A list of parties whose presence in a transaction can trigger a license requirement under
the Export Administration Regulations. The list specifies the license requirements that
apply to each listed party. These license requirements are in addition to any license
requirements imposed on the transaction by other provisions of the Export Administration
The 6 Lists to Check
Specially Designated Nationals List (OFAC)
– A list compiled by the Treasury Department, Office of Foreign Assets Control (OFAC).
OFAC’s regulations may prohibit a transaction if a party on this list is involved. In addition,
the Export Administration Regulations require a license for exports or reexports to any party
in any entry on this list that contains any of the suffixes "SDGT", "SDT", "FTO", "IRAQ2" or
Debarred List (State Department)
– A list compiled by the State Department of parties who are barred by §127.7 of the
International Traffic in Arms Regulations (ITAR) (22 CFR §127.7) from participating directly
or indirectly in the export of defense articles, including technical data or in the furnishing of
defense services for which a license or approval is required by the ITAR.
Nonproliferation Sanctions (State Department)
– Several lists compiled by the State Department of parties that have been sanctioned under
various statutes. The Federal Register notice imposing sanctions on a party states the
sanctions that apply to that party. Some of these sanctioned parties are subject to BIS’s
license application denial policy described in §744.19 of the EAR (15 CFR §744.19).
Red Flags
Know your customer!
View this guidance from the Bureau of Industry and Security.
1. The customer or its address is similar to one of the parties found on the
Commerce Department's [BIS's] list of denied persons.
2. The customer or purchasing agent is reluctant to offer information about
the end-use of the item.
3. The product's capabilities do not fit the buyer's line of business, such as
an order for sophisticated computers for a small bakery.
Destination Control Statement
"These commodities, technology or software were exported
from the United States in accordance with the Export
Administration Regulations. Diversion contrary to U.S. law is
Technically only required for non-EAR99 items (EAR 758.6) but good
practice to use for all EAR shipments.
Put on your invoice, bill of lading, air bill.
Electronic Export Information
Filed through the Automated Export System (AES) or your shipping
company/freight forwarder.
Required by law for most exports to foreign countries and U.S. territories
– Don’t forget Puerto Rico, U.S. Virgin Islands & Guam
– Shipping from St. Croix to Puerto Rico? File your EEI.
Common exceptions:
– Shipments to Canada (if no license required)
– Shipments where value is under US$2,500 PER Schedule B number
(again, only if NLR)
U.S. Principal Party of Interest (USPPI)
Long story short = the seller
– “The person or legal entity in the United States that receives the primary
benefit, monetary or otherwise, from the export transaction”
Filing directly
– AES-certified software (AES PcLink or other certified software)
– Must register with AES and get approval before filing begins
– Provide Proof of Filing with your Internal Transaction Number (ITN)
• The AES generated number assigned to a shipment confirming that an EEI
transaction was accepted and is on file in the AES. The ITN must appear on the bill of
lading, air waybill, export shipping instructions, or other commercial loading
5 years from the date of export
Records can be scanned on disc for retention but must be able to be fully
retrieved in original form if audited
Recoverable records include:
– Proforma & Commercial Invoice, Packing List, Bill of Lading or INTL
AWB, Certificates of Origin, etc.
– AES Abstract from carrier
– Export controls research & documentation
– Sales contracts, notes and memoranda
– All financial records pertinent to the sale
– All other correspondence pertinent to the transaction
More Resources
BIS – Export Management & Compliance System guide
Great presentation on export compliance
Question and Answer
Allen Patch, Director
Patricia Cook, International Trade Specialist
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