U.S. EXPORT CONTROLS and ECONOMIC SANCTIONS – AN OVERVIEW
Cecil Hunt∗
I. Introduction
singleUntil a decade or so ago it was understandable, even if hazardous, for a company to
believe that it could readily judge from the nature of its operations whether it had to be
concerned with compliance with U.S. export controls and economic sanctions. Export
controls were widely viewed as affecting only advanced, nsitive, or weapons-related
goods and technology, and a company that did not deal internationally in such goods or
technology thought that it had little, if any, compliance exposure. As regards economic sanctions, companies generally understood that broad embargoes were in place against a few countries, such as Cuba, but if a company had no dealings, direct or indirect, with an embargoed country (and few did) it paid little attention to sanctions.
Today, U.S. export controls and economic sanctions affect a much wider range of
international transactions. Moreover, the measures reach many activities that are either completely domestic or unlikely to be viewed as having an international aspect. Let’s
note just a few examples of the broadened regulatory reach. A company the does no
international business whatsoever may have to restrict the access its foreign national
employees are given to certain technical data. A growing number of controls require an export licen for even very mundane items if destined for proscribed urs or us,
thereby calling for “know your customer” procedures. Economic sanctions are no longer aimed at only a handful of countries, but now also involve multiple lists of names of
individuals and entities to be checked, sometimes irrespective of whether the transaction involves international business.
The landscape of U.S. export controls and economic sanctions is a labyrinth. Not only
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are veral different agencies administering and enforcing controls, but also the rules are derived from different basic statutes and are affected by numerous free-standing (and
sometimes uncodified) pieces of legislation. Furthermore, the transparency that is the
norm in other regulatory contexts is often missing. Limitations on judicial review, plus
judicial deference to the executive branch on matters related to foreign policy and
national curity result in there being scant judicial scrutiny of official actions in this
field.
Notwithstanding the complexity and occasional opacity of the regulations, firms can
and do learn to cope with them and, for most, compliance expen is relatively modest.
Money-laundering laws and controls impod specifically on financial institutions are not covered here, and this overview does not attempt to cover the full scope of export
controls and economic sanctions. It is designed, rather, to be a helpful starting point for © Cecil Hunt
2005
∗Harris, Wiltshire & Grannis LLP, Washington, D.C.
further inquiry. It can introduce the reader to some of the terminology and acronyms,
which will be highlighted at first u.
II. Who controls what?
There are veral agencies that handle export licensing and administer economic
sanctions.
A. Most exports that are controlled are subject to the controls administered by the
Bureau of Industry and Security (BIS) of the Department of Commerce
1. The controls are in the Export Administration Regulations. 15 C.F.R.
§§ 730-774 (EAR).
2. The normal statutory basis for the EAR, the Export Administration Act
(50 U.S.C. app. §§ 2401-2420), is not permanent legislation, and Congress
has let it expire on veral occasions. Several efforts to enact a new basic
law have failed. During periods of lap, the EAR have been maintained
by Presidential order under the International Emergency Economic
Powers Act (IEEPA). 50 U.S.C. §§ 1701-1706; e Exec. Order No.
universal
13222, Aug. 17, 2001, 66 Fed. Reg. 44205, Aug. 22, 2001, as most
recently extended by the Notice of August 2, 2005 (70 Fed. Reg.45273,
August 5, 2005).
3. The EAR are commonly referred to as applying to "dual-u" items, that
is, items which are suitable for either military-related u or nonmilitary
u. Some items subject to the EAR, however, have no military u.
4. The EAR include controls impod for a variety of purpos. Some
controls still reflect the Cold War focus on denying Communist countries
access to technologically advanced items of strategic significance.
Increasingly, the EAR implement efforts to stem the proliferation of
weapons of mass destruction and to limit the ability of certain countries or
actors to support international terrorism or to pursue destabilizing military
efforts or terrorist activity.smx
"defen articles" and "defen rvices" are controlled by the
of
B. Exports
Directorate of Defen Trade Controls (DDTC) of the Department of State.
1. The controls are in the International Traffic in Arms Regulations
(ITAR), which include the United States Munitions List (USML). 22
C.F.R. parts 120 through 130.maincour
2. The ITAR are promulgated under the authority of the Arms Export
Control Act. 22 U.S.C. §§ 2778-2994.
3. The USML consists of items specially designed or modified for military科学禁区
u, but designations and determinations have extended ITAR jurisdiction
to some items with non-military u as well.
Office of Foreign Asts Control (OFAC) of the Treasury Department
英语词典大全C. The
administers restrictions on business with countries, like Iran and Sudan, that are
the target of broad trade embargoes and economic sanctions that cover more than
just exports.
1. The OFAC regulations applicable to the embargoes are found in
successive parts of Title 31 of the Code of Federal Regulations, starting
with the Foreign Asts Control Regulations, 31 C.F.R. part 500.
2. Most OFAC regulations are issued under authority delegated by the
President when declaring an emergency and invoking the International
Emergency Economic Powers Act. 50 U.S.C. § 1701, et q. Embargoes
impod prior to the 1977 enactment of IEEPA are bad on the Trading
with the Enemy Act. 50 U.S.C. app. §§ 1-44.
D. Other agencies exerci export licensing jurisdiction over special types of exports.
2019年12月四级真题第一套The EAR list such controls. See Supplement No. 3 to 15 C.F.R. part 730.
Department
III. Commerce
国庆节 英语A. The structure of the Export Administration Regulations
1. The jurisdictional reach of the regulations is broad, but the portion of
transactions requiring a licen is comparatively small -- probably less
than two percent by value of U.S. industrial exports.
"subject to the EAR" is key, and it has a double aspect.
term
2. The
a. "Items" (commodities, technology, and software) subject to the
EAR broadly include all items "in the United States" and "U.S.-
origin" items outside of the United States, with three important
exceptions (15 C.F.R. § 734.3):
i. Items exclusively controlled for export by another U.S.
agency;
ii. Publicly available technology and software.
iii. Foreign-origin items with U.S.-origin content that is below
a specified percentage.
b. Activities subject to the EAR
i. Exportation from the United States and reexportation. 15
C.F.R. § 734.2.
ii. Certain releas of technology or software to a foreign
national. The relea in the United States of software or谷歌翻译搞笑
source code to a foreign national who is not a permanent
resident is a “deemed export” to the home country and is
subject to any licen requirement that would apply to an
actual transfer to that country. Deemed reexports are also
controlled. 15 C.F.R. § 734.2.
iii. The involvement of U.S. persons in supplying foreign-
origin items or in otherwi supporting a transaction with
knowledge of a proliferation link. 15 C.F.R. §§ 744.2-
744.4, and 744.6.
iv. Intangible exportation, including facsimile or internet
transmission to an addre abroad and placement on the
World Wide Web without limitation on foreign access.
requirements
3. Licen
Commerce Control List (CCL) (15 C.F.R. part 774) has
a. The
detailed entries describing items subject to list-bad licensing
requirements. Items that are "subject to the EAR" but not on the
CCL require a licen only in special situations, noted below.
The are called "EAR 99" items.
b. Entries on the CCL are identified by an Export Control
Classification Number (ECCN). To illustrate, ECCN 7A001
refers to certain accelerometers designed for inertial navigation or
guidance systems. The "7" places it under "navigation and
avionics", one of ten CCL categories. The "A' identifies it as
"equipment, asmblies, or components," ("B" is test, inspection
and production equipment, "C" is materials, "D" is software, and
"E" is technology). The "001" places it in the national curity
category as to basis for control, 0-99 being national curity, 100-
199 missile technology, 200-299 nuclear, 300-399 CBW, and 900-
999 anti-terrorism, crime control, and other bas for control. If an
item is controlled on more than one basis, the lowest applicable
"reason for control" group number is ud in the ECCN.
c. An item may be on the CCL, but generally will require a licen
only if the country chart (15 C.F.R. part 738) has an "X" in one or
more of the "reason for control" columns opposite the destination
country. In such a ca, the exportation will be termed “NLR” (no
