The overwhelming majority of goods and services may be exported from the U.S. without any significant federal regulatory regulation or government authorization. There are however military goods and services known as defense articles, as well as civilian sensitive equipment, software and technology, known as dual-use items, that are subject to special export control rules.
Export control laws are in place for numerous reasons including to, among other things, advance national security and foreign policy interests. An important tool of statecraft, these laws and regulations afford government officials the ability to control access to our most sensitive and advanced technologies to only those countries and persons that the U.S. government deems should have access to it.
Other countries have export control laws but, by far, the United States maintains the most comprehensive and, some argue, complex set of rules anywhere in the world. As a global economic and political leader, it makes sense that the U.S. also be a leader controlling access to America’s most sensitive military and civilian technology. An area of law and public policy that at times seems as if it is constantly evolving and adapting to global challenges, these regulation pose special challenges to companies.
For U.S. businesses and universities impacted by these regulations, the export compliance process can seem daunting at times. The type of license or other authorization your business may need depends largely the type of manufacturing or researching your entity undertakes. For example, export licenses are required in cases involving a commodity, software, or technology with national security, foreign policy, short-supply, nuclear non-proliferation, crime control, or terrorist-related concerns.
Legally, an “export” can happen in a number of ways including a fax, phone call, or during foreign travel with controlled information stored on a laptop or portable device such as a BlackBerry, iPhone, or a flash drive leaving the United States. In some cases an item never has to physically leave the United States for an export to have taken place.
The U.S. export control system is administered by several federal agencies including the Department of State, the Department of Commerce,and the Department of Defense. Nuclear exports are under the jurisdiction of the Department of Energy. With the State Department or Commerce Department serving as the lead agency, the approval process of potentially licensable products or services are also reviewed by other federal agencies.
At times these export control regulations overlap with other export control measures such as economic sanctions or embargoes that are under the jurisdiction of the Department of the Treasury. In addition, especially in the case of universities or U.S.-based companies with foreign subsidiaries, unique situations arise that involve immigration laws and regulations. A violation can occur in numerous places along your supply chain.
For small and medium-sized businesses, complying with these rules and regulations can be somewhat overwhelming. Even for large companies compliance costs are also a source of concern. No matter the size of your business or research institutions, take these rules and regulations seriously. Penalties for violating U.S. export control laws range from civil to criminal penalties including monetary fines and jail.